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MCA Sem. IV

Management Information Systems

Assignment Set -1

Q. 1. What Do You Understand By Information Process data ?

Information as Processed 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.

Information as the Opposite of Uncertainty

A different perspective on information derives from economic theory and defines

information as the negative measure of uncertainty; that is, the less information is

available, the more uncertainty exists, and conversely, the more information is available,

the less uncertainty exists? In microeconomic theory the equilibrium of supply and

demand depends on a market known as a perfect market, where all buyers and sellers

have complete knowledge about one another and where uncertainty does not exist.

Information makes a market perfect by eliminating uncertainties about supply and

demand. In macroeconomic theory, firms behave according to how they read the

economic climate. Economic signals that measure and predict the direction of the

economy provide information about the economic climate. The firm reduces its

uncertainty by decoding these signals.

Taking an example of Federal Express in USA, each incoming aircraft has a scheduled

arrival time. However, its actual arrival depends on unforeseen conditions. Data about

when an aircraft departed from its destination is information in the economic sense

because it reduces uncertainty about the aircraft’s arrival time, thereby increasing Federal

Express’s ability to handle arriving packages.

Managers also define information in terms of its reducing uncertainty. Because managers

must project the outcomes of alternatives in making decisions, the reduction of

uncertainty about the outcomes of various alternatives improves the effectiveness of the

decision- making process and the quality of the decision.

Information as a Meaningful Signal

Information theory, a branch of statistics concerned with measuring the efficiency of

communication between people and/or machines, defines information as the inputs and

outputs of communication. Electronic, auditory, visual, or other signals that a sender and

receiver interpret similarly convey information. For example, in the recruitment scenario

about, the resumes and applications for the open positions are information because they

are signals sent by the applicants, and interpreted similarly by both.

The Managers in their roles as communicators both generate and receive information.

They receive reports that organize signals or data in a way that conveys their meaning.

Reports of sales trends become information; so do reports about hazardous waste sites.

Managers derive meaning from the information they see and hear as part of

communication and use it to make decisions. This definition of information requires a

manager to interpret a given signal as it was intended. For example, a manager’s incorrect

interpretation of body language in a negotiation would not be considered to be

information from this perspective, although we know that managers use both correct and

incorrect perceptions as information in decision making and other managerial functions.

Again, this view of information suggests the complexity of the concept and the value of a

multifaceted definition.

Q. 2. Discuss the Components of An Organizational Information Systems.

Ans. Components of an Organizational Information System

The environment in which organizations operate from the informational perspective in

terms proposed by George Huber of the University of Texas, who has studied the

organizational design required by an information society. His conclusions provide a

framework for determining what is required of an organizational information system.

These, according to Huber, are the hallmarks of an information society:

1) Dramatic Increase of Available Knowledge

Whether measured in terms of the number of scholarly journals, patents and copyrights,

or in terms of the volumes of corporate communications, both the production and the

distribution of knowledge have undergone a manifold increase.

2) Growth of Complexity

Huber characterizes complexity in terms of numerosity, diversity, and interdependence.

A growing world population and the industrial revolution combined to produce

numerosity, or a growing number of human organizations. To succeed, people and

organizations learned to specialize: they do things differently and organize themselves

differently to accomplish specialized tasks. These differences lead to diversity.

Two principal factors have led to increased interdependence. The first as been the

revolution in the infrastructure of transportation and communication. The second factor is

specialization in firms that make narrowly defined products, as opposed to the self-

sufficiency of companies producing a complex product down to its minute elements. A

company’s product is typically a part of a larger system, produced with contributions

from a number of interdependent firms (consider a car or a computer). Moreover,

interdependence has increased on a global scale. Even the most isolated of countries

participates in some way in the international division of labor.

Organizations operating in the public sector, while rarely in a competitive situation, are

still governed by the demands of society. Pressures on the public sector in democratic

societies, along with the pressures conveyed from the private sector, also make the

environment in which public organizations operate more complex.

3) Increased Turbulence

The pace of events in an information society is set by technologies. The speeds of today’s

computer and communication technologies have resulted in a dramatic increase in the

number of events occurring within a given time. Consider the volumes and speed of

trades in the securities and currency markets. Widespread use of telefacsimile, as another

example, has removed the "float"-the lag between sending and receiving-in written

communications. Equally important, because of the infrastructure discussed earlier, the

number of events that actually influence an organization’s activities (effective events) has

also grown rapidly.

The great amount of change and turbulence pressuring organizations today thus calls for

rapid innovation in both product and organizational structure. To thrive, an organization

must have information systems able to cope with large volumes of information in a

selective fashion.

Huber concludes that these factors – an increase of available knowledge, growth of

complexity, and increased turbulence-are not simply ancillary to a transition to the new

societal form. Rather, they will be a permanent characteristic of the information society

in the future. Moreover, we should expect that these factors would continue to expand at

an accelerating rate (a positive feedback exists). Barring some catastrophic event, we

expect that the rapidly changing environment will be not only "more so" but also "much

more so." To succeed in an information society, organizations must be compatible with

this environment.

Q. 3. What are the Features Contributing to Success and failure of MIS Models ?

Ans. The 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 changed the information processing landscape from centralized

processing, relying on single powerful mainframes, to distributed processing have been

the rapidly increasing power and decreasing costs 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

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

computerized information systems collected in user

manuals, operator manuals, and similar documents

Multiple computer systems are organized into networks in most cases. Various network

configurations are possible, depending upon an organization’s 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 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 broad computational 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.

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 desired program. 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

are accessible for fast and simple queries and the production of reports. Software transla-

tors-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 computer’s central processor.

Many categories of applications 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 a specific 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 to create 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 an integrated 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 the development of information systems. Procedures to be followed

in using, operating, and maintaining computerized systems are a part of the system

documentation.

Q. 4. List down the potential external opportunities, potential internal weaknesses.

Ans. 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

· 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

Q.5 What do you Understand by Multinational Corporation, Global Corporation,

International Corporation, Transnational Corporation.

Ans. Multinational Corporation

A multinational corporation has built or acquired a portfolio of national companies that

it operates and manages with sensitivity to its subsidiaries’ local environments. The

subsidiaries operate autonomously, often in different business areas. A company that

follows a multinational strategy has little need to share data among its subsidiaries or

between the parent and subsidiaries except to consolidate financial positions at year’s

end.

Global Corporation

A global corporation has rationalized its international operations to achieve greater

efficiencies through central control. Although its strategy and marketing are based on the

concept of a global market, a headquarters organization makes all major decisions. A

company pursuing a global strategy needs to transfer the operational and financial data of

its foreign subsidiaries to headquarters in real time or on a frequent basis. A high level of

information flows from subsidiary to parent, while limited data move from parent to

subsidiary.

International Corporation

An international corporation exports the expertise and knowledge of the parent

company to subsidiaries. Here subsidiaries operate more autonomously than in global

corporations. Ideally, information flows from the parent to its subsidiaries. In practice,

subsidiaries often rely on the parent to exercise its knowledge for the subsidiaries’ benefit

rather than simply to export it to the subsidiaries. For example, a subsidiary without a

great deal of human resources expertise may "pay" its parent to operate its human

resources function. Although the information theoretically should stay within the

subsidiary, in this case it may flow back and forth between the parent’s location and the

subsidiary’s location.

Transnational Corporation

A transnational corporation incorporates and integrates multinational, global, and inter-

national strategies. By linking local operations to one another and to headquarters, a

transnational company attempts to retain the flexibility to respond to local needs and

opportunities while achieving global integration. Because transnational operate on the

premise of teamwork, they demand the ability to share both information and information

services.

Q-6. What are the limitation of ERP systems ? How ERP Packages help in

overcoming these limitations ?.

Ans. ERP Selection

Since, the market offer a number of ERP packages, the buyer has a choice to make. Each

product has its own USP and differs in a number of ways in content, scope, an ease of

implementation, etc. The selection can be made on three dimensions, viz, the vendor, the

technology, the solution scope, and architecture.

Vendor Evaluation Factors

1) Business strength of the vendor.

2) Product share in total business of the vendor.

3) R & D investment in the product.

4) Business philosophy of the vendor.

5) Future plans of the vendor.

6) Market reach and resource strength of the vendor.

7) Ability to execute the ERP solution.

8) Strength in the other technology knowledge and the ability to use them.

9) Perspective plan of the ERP improvement with technology development.

10) Image in the business and in the information technology world.

11) Financial strength of the vendor to sustain and handle the business and technology

risk.

12) Organisation for product development and support.

13) The global experience of the vendor and commitment to the product for long term.

Technology Evaluation Factor

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.

8) 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.

11) Hardware-software configuration management.

ERP Solution Evaluation

Factor

1) ERP fit for the business of the organization in terms of the functions, features and

processes,

2) business scope versus application scope and so on.

3) The degree of deviation from the standard ERP product.

4) Ease of use: Easy to learn, implement and train.

5) The ability to migrate to the ERP environment from present status.

6) Flexible design.

7) The level of intelligent usage of ‘help’ , error messages, dictionaries.

8) The ability for a quick start on implementation.

9) Versatility of the solution for implementation on a platform with the project of saving

the investment.

10) Rating on performance, response and integration.

11) Product quality in terms of security, reliability, and precision in results.

12) Documentation for system handling and administration.

13) Product rating in its class of products.

14) Solution architecture and technology.

The methodology of selection will begin first with the study of organisation in terms of

the business focus, critical application, sensitive business process, etc. Since, the ERP

solution is a tool to change the style of business management, it requires thorough

understanding of the business, the business issues, the management criticalities, and the

socio-cultural factors. Such a study will help find out if the ERP is fit for the

organisation. It is a very important to find out that the ERP is fit or not, as it is the most

important and critical success factor.

The price of the ERP package is difficult to judge and often it is a negotiable point in

favour of the buyer in competitive scenario. Since the ERP implementation is a two three

year’s project, the ERP solution will sustain and be adequate for the current and the

future business needs for a period of five to seven years. After that, it would become a

platform for the future expansions and growth.

It is advisable for the organisation to form a committee for selection of the ERP solution.

It should have important functional head, a strong Information Technology person and a

person from corporate planning function. The committee should be headed by a CEO or

his designated authority. This committee should prepare a requirement document spelling

out the business goals, and objectives, the futuristic scenario of business, the critical

functions, processes, business focus and customer deliverables. A note on the

management philosophy, procedures, practices and style will be a valuable input.

When such a document is ready, the selected ERP vendors should be called for seeking

the ERP offer. The document should be given to the vendors, and they should be allowed

to study the organisation and its business. All the vendors should be asked to submit a

technical proposal explaining the fit of the ERP to the organisation. The submission of

the vendors should be scrutinized by the committee for short-listing. The short-listed

vendors then should be asked to give the product presentation to the selected group of

decision makers to seek their opinion on the product.

When the product presentation is over, product demonstration should be arranged, for a

detailed security and evaluation. In this process, the committee should confirm whether

the critical requirement of business, in terms of information, process handling facilities,

features, etc. are available or not. If some of them are not available then there is a

possibility of work around to achieve the same result.

A second evaluation note should be made for a comparative analysis of the ERP solutions

and then a critical evaluation of this analysis should lead to the choice list.

Simultaneously, the committee should gather information on the experience of the other

organisation where the ERP is implemented. This information should be on how

successful the vendor is, in the implementation of the ERP? The strengths and the

weaknesses of the vendor, the product and the post sales processes should be ascertained.

The choice list should be weighed by these points.

Though such an approach is appropriate, it is not always possible to bring out a clear win

in the evaluation, as many factors are intangible in nature. In such an event, the

committee should examine the trade off involvement in the selection. It should not

happen that organisational issue dominate the choice of the ERP and in the process the

best product is rejected. Ideally, the organisation should be carrying out business process

engineering and reengineering study, restructure the organisation, modify the processes

functionalities before the ERP decision is made.

Once the committee makes the decision, the vendor should be asked to resubmit the

technical and commercial proposal with price and the terms of offer. The proposal should

have the following details:

1) Scope of supply

2) Objectives

3) Modules and deliverables

4) Implementation methodology

5) Plan and schedules of hardware and software implementation

6) Resource allocation

7) Responsibility division between the organisation and the vendor

8) Process of implementation

9) Organisation of implementation

10) Progress monitoring and control of the important events

11) Process of resolving the issue all levels

12) The official product literature

13) Association with the other vendor its purpose

14) Commercial submission:

i. Price by module and number of users

ii. Payment terms

15) Process of acceptance of the ERP by stages and linking with the payments

Once the ERP decision is made, the vendor and organisation enter into a legal contract.

Such legal contract should list the obligations, duties, responsibilities, deliverables and

the value components. It should also include the clauses on issues arising out of

unforeseen circumstances and how to resolve them with the legal remedy available to

both the parties. Since, the ERP is a product of several technologies, there should be

clauses relating to safeguarding the interests of each other to cover the risk arising out of

the technology failure.

The ERP is a tool to manage the enterprise resources to achieve the business objective. It

is a supporting system and does not solve all the problems of business management. The

success of the ERP lies in its implementation with commitment. It requires full

participation of the organisation. It is to be appreciated as a managerial tool and not as a

labour saving device. Since, potentially the ERP is designed for productivity rise, the

management must exploit it to its advantage by adopting the best practices or changing

the practices through the business process reengineering.