MIS Notes for MBA and BBA students

7/25/2019 MIS Notes for MBA and BBA students

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Q 1: Define MIS? What are the characteristics of MIS?

Answer:

Introduction:

MIS is an Information system which helps in providing the management of an organization

with information which is used by management for decision making. A management information

system (MIS) is a subset of the overall internal controls of a business covering the application of

people documents technologies and procedures by management accountants to solving

business problems such as costing a product service or a business!wide strategy. Management

information systems are distinct from regular information systems in that they are used to

analyze other information systems applied in operational activities in the organization.

Academically the term is commonly used to refer to the group of information management

methods tied to the automation or support of human decision making e.g. "ecision Support

Systems #$pert systems and #$ecutive information systems.

An %MIS% is a planned system of the collecting processing storing and disseminating data in

the form of information needed to carry out the functions of management. According to &hilip

'otler A marketing information system consists of people euipment and procedures to

gather sort analyze evaluate and distribute needed timely and accurate information to

marketing decision makers. *he terms MIS and information system are often confused.

Information systems include systems that are not intended for decision making.

*he area of study called MIS is sometimes referred to in a restrictive sense as information

technology management. *hat area of study should not be confused with computer science. I*

service management is a practitioner!focused discipline. MIS has also some differences with

#nterprise +esource &lanning (#+&) as #+& incorporates elements that are not necessarily

focused on decision support. MIS has a ma,or impact on the functions of any organization.

*he organization derives benefits from the systems in the following form-

a) Speedy access to information

b) Interpretation of data

c) uick decisions

d) Speedy actions

e) Increased productivity and thereby increases in the profit

f) +educed transaction cost.

MIS characteristics:


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In any organization managers will have varieties of tasks to manage. MIS is mainly designed to

take care of the needs of the managers in the organization.

/rganizations will have different departments like marketing production sales

inventory maintenance etc. #ach of these departments function individually and also in

relationship with other departments. Information is available in abundance. MIS aids in

integrating the information generated by various departments of the organization.

MIS helps in identifying a proper mechanism of storage of data. *he data is maintained

in such a way that the unnecessary duplication of data is avoided.

MIS also helps in establishing mechanism to eliminate redundancies in data.

MIS as a system can be broken down into sub systems. #ach such sub system may be

programmed. *his results in easy access of data accuracy of data and information. It

helps in maintaining the consistency of data.

Function of MIS:

*he main function of MIS is to help the managers and the e$ecutives in the organization in

decision!making.

0arge uantities of data like customers1 information competitors1 information personnel

records sales data accounting data etc is collected from internal sources.

2ompany records and e$ternal sources like annual reports and publications.

*he collected data is organized in the form of a database.

*he data from the database is processed and analyzed by using different tools and

techniues.

*he results of the analysis are properly presented to the managers to help them in

decision!making.

Q 2: Explain strategic MIS categories in detail. Giveillstration for each categor!?

"ns#er:


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Strategic Information System:

A Strategic Information System (SIS) is a system to manage information and assist in

strategic decision making. A strategic information system has been defined as *he information

system to support or change enterprise%s strategy. A SIS is a type of Information System that is

aligned with business strategy and structure. *he alignment increases the capability to respond

faster to environmental changes and thus creates a competitive advantage.

An early e$ample was the favorable position afforded American and 3nited Airlines by their

reservation systems Sabre and Apollo. 4or many years these two systems ensured that the two

carriers% flights appeared on the first screens observed by travel agents thus increasing their

bookings relative to competitors. A ma,or source of controversy surrounding SIS is their

sustainability.

SISs are different from other comparable systems as-

*hey change the way the firm competes.

*hey have an e$ternal (outward looking) focus.

*hey are associated with higher pro,ect risk.

*hey are innovative (and not easily copied).

It is mainly concerned with providing and organization and its members an assistance to

perform the routine tasks efficiently and effectively. /ne of the ma,or issue before any

organization is the challenge of meeting its goals and ob,ectives. Strategic IS enabling such

organization in realizing their goals. Strategic Information System (SIS) is a support to thee$isting system and helps in achieving a competitive advantage over the organizations

competitors in terms of its ob,ectives. *his unit deals with the critical aspects of the strategic

information system.

*his unit indicates the theoretical concepts and the way in which the same are realized in

practice. *he flow of the unit is in such a way that it starts with the development of

contemporary theory about strategic uses of corporations% internal information systems leading to

systems which transcend the boundaries of particular organizations. *he process whereby

strategic information systems are created or identified is then e$amined.

A number of weaknesses in the e$isting body of theory are identified and suggestions made

as to directions in which knowledge is or may be progressing. A strategic information system is

concerned with systems which contribute significantly to the achievement of an organization%s

overall ob,ectives. *he body of knowledge is of recent origin and highly dynamic and the area


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have an aura of e$citement about it. *he emergence of the key ideas the process whereby

strategic information systems come into being is assessed areas of weakness are identified and

directions of current and future development suggested. Information system is regarded as a tool

to provide various services to different management functions.

*he tools have been developing year by year and the application of the tool has become more

and more diverse. In management it is now a very power means to manage and control various

activities and decision making process. *he original idea of automating mechanical processes

got uickly succeeded by the rationalization and integration of systems. In both of these forms

IS was regarded primarily as an operational support tool and secondarily as a service to

management. Subseuent to the development it was during the last few years that an additional

potential was discovered. It was found that in some cases information technology (I*) had been

critical to the implementation of an organization%s strategy.

An organization1s strategy supported by information system fulfilling its business ob,ectivescame to be known as Strategic Information System. *he strategic information system consists of

functions that involved gathering maintenance and analysis of data concerning internal

resources and intelligence about competitors suppliers customers government and other

relevant organizations.

Q $: Write a detailed note on the planning and develop%ent

of Manage%ent Infor%ation S!ste%s?

Answer:

Introduction:Information is a corporate resource as important as the capital labor know!how etc. and is

being used for decision!making. Its uality therefore is reuired to be very high. 0ow uality

information would adversely affect the organizational performance as it affects decision!making.


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*he uality of information is the result of the uality of the input data processing design system

design system and procedures which generate such a data and the management of the data

processing function. uality unlike any other product is not an absolute concept. Its level is

determined with reference to the conte$t and its use and the user. &erfect uality ,ust as perfect

information is non!achievable and has cost!benefit implications.

*he uality of the parameters is assured if the following steps are taken.

All the input is processed and controlled as input and process design.

All updating and corrections are completed before the data processing begins.

Inputs (transactions documents fields and records) are sub,ect to validity checks.

*he access to the data files is protected and secured through an authorization scheme

Intermediate processing checks are introduced to ensure that the complete data is

processed right through i.e. run to run controls.

"ue attention is given to the proper file selection in terms of data periods and soon.

5ackup of the data and files are taken to safeguard corruption or loss of data.*he system audit is conducted from time to time to ensure that the information system

specifications are not violated.

*he system modifications are approved by following a set procedure which begins with

authorization of a change to its implementation followed by an audit.

Systems are developed with a standard specification of design and development.

Information system processing is controlled through programmed control process

control and access control.

#nsure MIS model confirms consistency to business plan satisfying information needs to

achieve business goals.

*he uality parameters which are generally considered are shown in the table.

Individualdiferences

Explanation Efect oninormationprocessing

Examples

Locus of controlInternal or external

to the situation.

The degree ofperception in

assessing the controlwhich is internal tothe organization orexternal to theorganization.

More informationgathering and

Analysis if internal..

The productiondecisions selection

of tools and materialsetc.

!ersonal dogmatism. The degree of faith in"eliefs opinions andpast experience.

Low dogmatism thenMore informationcollection and!rocessing.

The pricingad#ertising in a$ompetiti#e%n#ironment.


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&is' propensity. The a(ility to ta'ethe ris'..

)igher then moreInformationgathering andanalysis.

The top management*ecision+ma'ing in astrategic planning.

Tolerance forAm(iguity.

.

Le#el of clarityre,uired in the

information. TheA(ility to readthrough theinformation.

Tight tolerance thenmore information

$ollection andanalysis.

Manager $onstantlyas'ing for more

Information.

Manipulati#eintelligence..

The a(ility tomanipulatethe data andinformation#is+-+#is the storedinformation andnowledge.

)igh a(ility then lessinformation and moreSelf analysis.

%xperienced andS'illful managers relyon the manipulati#eIntelligence.

%xperience in*ecision+ma'ing.

%xtent of experienceat

particular le#el ofdecision ma'ing

)igh then correct/ltering of data and

appropriate choice of*ecision ma'ingprocess..

The managers with a0ide experience the

di1erent /elds ofmanagement call forprecise and less (utpertinentinformation.

nowledge of theTas' tools andtechnology..

The extent of'nowledge in theapplication of thetools and technology.

)igher then lessInformation rele#antto and tools correctanalysis.

The Technocratscientists andmanagers of technology ha#ede/nite information

*he uality of these important parameters is ensured by conducting a proper systems analysis

designing a suitable information system and ensuring its maintenance from time to time andalso sub,ecting it to audit checks to ensure the system integrity *he assurance of uality is a

continuing function and needs to be evolved over a period and reuires to be monitored properly.

Q &: Explain in detail the necessit! and i%portance of

S!ste% Design in MIS?

"ns#er:

*he 5usiness application system demands designing of systems suitable to the application in

pro,ect. *he ma,or steps involved in the design are the following-

Input *esign-

Input design is defined as the input reuirement specification as per a format reuired. Input

design begins long before the data arrives at the device. *he analyst will have to design source

documents input screens and methods and procedures for getting the data into the computer.


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2utput *esign-

*he design of the output is based on the reuirement of the user manager customer etc. *heoutput formats have to very friendly to the user. *herefore the designer has to ensure the

appropriateness of the of the output format.

*e#elopment-

6hen the design and its methodology are approved the system is developed using

appropriate business models. *he development has to be in accordance to a given standard. *he

norms have to be strictly adhered to.

Testing:

#$haustive and thorough testing must be conducted to ascertain whether the systemproduces the right results. *esting is time consuming- *est data must be carefully prepared resultreviewed and corrections made in the system. In some instances parts of the system may have to

be redesigned. *esting an information system can be broken down into three types of activities.

3nit testing system tests and acceptance testing.

Implementation and Maintenance :

2onversion 7 2onversion is the process of changing from the old system to the new system.4our main conversion strategies can be employed. *hey are 7 the parallel strategy the direct

cutover strategy the pilot strategy and the phased strategy.

In a parallel strategy both the old system and its potential replacement are run togetherfor a time until everyone is assure that the new one functions correctly. *his is the safest

conversion approach because in the event of errors or processing disruption the old system can

still be used as a backup. 5ut this approach is very e$pensive and additional staff or resourcesmay be reuired to run the e$tra system.

*he direct cutover strategy replaces the old system entirely with the new system on anappointed day. At first glance this strategy seems less costly than the parallel conversion

strategy. 5ut it is a very risky approach that can potentially be more costly than parallel

activities if serious problems with the new systems are found. *here is no other system to fallback on. "islocation disruptions and the cost of corrections are enormous.

*he pilot strategy introduces the new system to only a limited area of the organization

such as a single department or operating unit. 6hen this version is complete and working


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smoothly it is installed throughout the rest of the organization either simultaneously or in

stages. *he phased strategy introduces the new system in stages either by functions or by

organizational units. If for e$ample the system is introduced by functions a new payroll systemmight begin with hourly workers who are paid weekly followed si$ months later by adding

salaried employees (who paid monthly) to the system.

Maintenance is also necessary for other failures and problems that arise during the

operation of a system. #nd!users and information systems personnel then perform a

troubleshooting function to determine the causes of and solution to such problems.

Q ': Explain in detail a(ot e)(siness* e)co%%erce and e)

colla(oration. Give Sita(le exa%ples?

"ns#er:

Managing an %+(usiness 3 $hallenges (eforean %+(usiness

"ue to Internet capabilities and web technology traditional business organization definition

has undergone a change where scope of the enterprise now includes other company locations

business partners customers and vendors. It has no geographic boundaries as it can e$tend its

operations where Internet works. All this is possible due to Internet and web moving traditional

paper driven organization to information driven Internet enabled #!business enterprise. #!

business enterprise is open twenty!four hours and being independent managers vendors8customers transact business anytime from anywhere.

Internet capabilities have given #!business enterprise a cutting edge capability advantage to

increase the business value. It has opened new channels of business as buying and selling can be

done on Internet. It enables to reach new markets across the world anywhere due to

communication capabilities. It has empowered customers and vendors 9 suppliers through


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secured access to information to act wherever necessary. *he cost of business operations has

come down significantly due to the elimination of paper!driven processes faster communication

and effective collaborative working. *he effect of these radical changes is the reduction in

administrative and management overheads reduction in inventory faster delivery of goods and

services to the customers.

In #!business enterprise traditional people organization based on +,o%%and ,ontrol+

principle is absent. It is replaced by people organization that is empowered byinformation and

knowledge to perform their role. *hey are supported by information systems application

packages and decision!support systems. It is no longer functionalproduct and pro,ect or matri$

organization of people but #!organization where peoplework in network environment as a team

or work group in virtual mode. #!business enterprise is more process!driven *echnology!

enabled and uses its own informationand knowledge to perform. In #!business enterprise most

of the things are electronic usedigital technologies and work on databases knowledge bases

directories and documentrepositories. *he business processes are conducted through enterprisesoftware like #+& S2M and 2+M supported by data warehouse decision support and

knowledgemanagement systems.

*hey are using #!business #commerce solutions to reach faraway locations to deliver

product and services. *he enterprise solutions like #+& S2M and 2+M run on Internet

(Internet 9 #$tranet) : Wide "rea -et#or (6A;). *he business processes across the

organization and outside run on #!technology platform using digital technology.


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MIS for #!business is different compared to conventional MIS design of an organization.

*he role of MIS in #!business organization is to deal with changes in global market and

enterprises. MIS produces more knowledge!based products. 'nowledge management system is

formally recognized as a part of MIS. It is effectively used for strategic planning for survival and

growth increase in profit and productivity and so on. *o achieve the said benefits of #!business

organization it is necessary to redesign the organization to realize the benefits of digital firm.

*he organization structure should be lean and flat. =et rid of rigid established infrastructure such

as branch office or zonal office. Allow people to work from anywhere. Automate processes after

reengineering the process to cut down process cycle time. Make use of groupware technology on

Internet platform for faster response processing. Another challenge is to convert domestic

process design to work for international process where integration of multinational information

systems using different communication standards country!specific accounting practices and

laws of security are to be adhered strictly. Internet and networking technology has thrown

another challenge to enlarge the scope of organization where customers and vendors become part

of the organization.*his technology offers a solution to communicate coordinate and collaborate with

customers vendors and business partners. *his is ,ust not a technical change in business

operations but a cultural change in the mindset of managers and workers to look beyond the

conventional organization. It means changing the organization behavior to take competitive

advantage of the #!business technology. *he last but not the least important is the challenge to

organize and implement information architecture and information technology platforms

considering multiple locations and multiple information needs arising due to global operations of

the business into a comprehensive MIS.

%+$ommerce:

It is a second big application ne$t to #+&. It is essential deals with buying and selling of

goods. 6ith the advent of intent and web technology #!2ommerce today covers an entire

commercial scope online including design and developing marketing selling delivering

servicing and paying for goods. Some #!2ommerce application adds order tracking as a feature

for customer to know the delivery status of the order. *he entire model successfully works on

web platform and uses internet technology. #!2ommerce process has two participants namely

5uyer and Seller like in traditional business model. And uniue and typical to #!commerce

there is one more participant to seller by authorization and authentication of commercial

transaction.

#!2ommerce process model can be viewed in four ways and categories-

5>2- 5usiness /rganization to 2ustomer.


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share them and so on. #!2ollaboration helps work effectively on applications like calendaring

and scheduling tasks event pro,ect management workflow application work group application.

#!collaboration system components are internet Intranet #$tranet and 0A; 6A;

networks for communication through =roup6are tools browser. 0et us illustrate the model

using an event in the business such as receipt of material for a ,ob to be processed on the shop

floor. In this event there is a transaction receipt of material which needs to be processed and

then a workgroup will use this information of material receipt. #ach member of this workgroup

has a different goal.

Q 0: What is an internet? Explain the differences (et#een

internet* intranet and extranet?

"ns#er:

Introduction:

Internet is a global network of interconnected computers enabling users to share

information along multiple channels. *ypically a computer that connects to the Internet can

access information from a vast array of available servers and other computers by moving

information from them to the computer%s local memory. *he same connection allows that

computer to send information to servers on the network8 that information is in turn accessed and

potentially modified by a variety of other interconnected computers. A ma,ority of widely

accessible information on the Internet consists of inter!linked hyperte$t documents and other

resources of the 6orld 6ide 6eb (666).

2omputer users typically manage sent and received information with web browsers8 other

software for users% interface with computer networks includes specialized programs for

electronic mail online chat file transfer and file sharing. *he movement of information in the

Internet is achieved via a system of interconnected computer networks that share data by packet

switching using the standardized Internet &rotocol Suite (*2&9I&). It is a network of networks

that consists of millions of private and public academic business and government networks of

local to global scope that are linked by copper wires fiber optic cables wireless connections

and other technologies.

*i1erence (etween internet intranet and

extranet as follow:


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". Extranet :

An e$tranet is a private network that uses the Internet protocols and the public

telecommunication system to securely share part of a business%s information or operations with

suppliers vendors partners customers or other businesses. An e$tranet can be viewed as part ofa company%s intranet that is e$tended to users outside the company. An e$tranet reuires security

and privacy.

A new buzzword that refers to an intranet that is partially accessible to authorized outsiders.

6hereas an intranet resides behind a firewall and is accessible only to people who are members

of the same company or organization an e$tranet provides various levels of accessibility to

outsiders. ou can access an e$tranet only if you have a valid username and password and your

Identity determines which parts of the e$tranet you can view.

An e$tranet is somewhat very similar to an intranet. #$tranets are designed specificallyto give e$ternal limited access to certain files of your computer systems to-

2ertain large or privileged customers.

Selected industry partners.

Suppliers and subcontractors... etc.

*herefore a carefully designed e$tranet can bring additional business to your company.

Intranets and e$tranets all have three things in common-

*hey both use secured Internet access to the outside world.

5oth can drastically save your company or organization a lot of money.

5oth need a user I" : password to control access to the whole system.

*he professional development team at My 6eb Services has the e$pertise and the right tools

to design the right intranet or e$tranet that will meet your e$act needs both for today and the

future.

/. Intranet:

An internal use private network inside an organization that uses the same kind of software

which would also be found on the Internet. Inter!connected network within one organization thatuses 6eb technologies for the sharing of information internally not worldwide. Such

information might include organization policies and procedures announcements or information

about new products. An intranet is a restricted!access network that works like the 6eb but isn%t

on it. 3sually owned and managed by a company an intranet enables a company to share its

resources with its employees without confidential information being made available to everyone

with Internet access.


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A network based on *2&9I& protocols (an internet) belonging to an organization usually a

corporation accessible only by the organization%s members employees or others with

authorization. An intranet%s 6eb sites look and act ,ust like any other 6eb sites but the firewall

surrounding an intranet fends off unauthorized access. 0ike the Internet itself intranets are used

to share information.

An intranet is an information portal designed specifically for the internal communications of

small medium or large businesses enterprises governments industries or financial institutions

of any size or comple$ity. Intranets can be custom!designed to fit the e$act needs of businesses

no matter where they are situated. 3sers of intranets consist mainly of-

Members of the e$ecutive team.

Accounting and order billing.

Managers and directors.

Sales people and support staff.

2ustomer service help desk etc...

,. Internet:

An electronic network of computers that includes nearly every university government and

research facility in the world. Also included are many commercial sites. It started with four

interconnected computers in BCDC and was known as Arpanet. A network of computer networks

which operates world!wide using a common set of communications protocols. *he vast

collection of inter!connected networks across the world that all use the *2&9I& protocols. A

global network connecting millions of computers. A worldwide network of computer networks.

It is an interconnection of large and small networks around the globe. *he Internet began in BCD>

as a resilient computer network for the 3S military and over time has grown into a global

communication tool of more than B>EEE computer networks that share a common addressing

scheme.

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MIS Notes for MBA and BBA students