MIS-1

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MODULE – 1

ORGANISATION & INFORMATION SYSTEM

Presented by-NAVAZ THOKURLECTURERMBA DEPTP.A.CE- MANGALORE

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SYSTEM:A system is a collection of elements/components that interact with

each other to accomplish the defined goalEg: University system Banking system

University system: The components are: admission, teaching, examination, evaluation

Each of these components interacts to train and graduate the student

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Information System (IS):An information system is a set of interrelated elements that collect (input) data, manipulate (process) data and disseminate (output) information and provide a reaction (feedback) to meet the objective

If an information system is automated using computer as machine, then it is referred as Computer Based Information System (CBIS) and is the blend of Information System and Computer System (Hardware & Software)

Information Technology:

Refers to the technology of storing processing communicating sharing protecting/securing

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Data/information across geographical locations

Makes use of Computer (hardware/software) technology Storage technology Communication technology

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In general, a system has 3 basic elements;

Input Processing Output

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Input

ProcessingClassifyArrange Calculate

Output

Suppliers

ENVIRONMENT

ORGANISATION

Customers

Regulatory Agencies Stockholders Competitors

Feedback


Changing Environment and its impact on business:

Any change in the environment will introduce some sort of pressure/stress on system to undergo change in the system

If changes are not accommodated in the system, the system starts decaying and terminates finally

The changes are accommodated by:

- changing the goal set of the system (new goals)

- changing the levels in achieving the goals

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Types of changes in environment:

- Economical (Capital, Labor, Price change, Fiscal policy, customers)

- Technological

- Social

- Political

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Business strategic ObjectivesBusiness Processes Software

Hardware

Data Managem

ent

Telecommunicatio

n

Business Firm Information System


Operational Excellence

New Products, Services & Business Models

Customer & Supply Intimacy

Improved Decision making

Competitive advantage

Survival


Operational EfficiencyE.g. Wal-Mart, the largest retailer on Earth, exemplifies the power of information system coupled with brilliant practices & supportive mgt to achieve world class operational efficiencyIn 2005, Wal-Mart attained more than $285 billion in sales- nearly one-tenth of the retail sales in the US- because of its Retail Link System, which digitally links its suppliers to Wal-Mart’s 5,289 stores worldwide.


New Products, Services & Business ModelsA business model describes how a company produces, delivers & sells a product or services to create wealthE.g. Apple transformed an old business model of music distribution in to online, legal distribution model on its own iPod technology platform.


Customer & Supplier Intimacy E.g. Mandarin hotel in Manhattan & other high end hotels exemplify the us of information systems && technologies to achieve customer intimacy. These hotels use computers to keep track of guest’s preferences such as their preferred room temperature, check-in time, television programs & stores all that data. Individual rooms in the hotel are networked to a central network server computer so that they can be remotely monitored or controlled. When the customer enters at the hotels, the system automatically changes the room conditions based on customer’s profile.


Improved Decision makingE.g. Verizon Corpn, one of the largest regional Operating companies in the US, uses a web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance for each locality served, & line outages etc. Using these information managers immediately allocate resources to affected areas & restores service .


Competitive AdvantageDoing things better than your competitors, charging less for superior products & responding to the customers & suppliers in real time will add up to higher sales & higher profitsE.g. Dell Computer- Dell Computer has shown consistent profitability during its life span of 25 years. A large part of Dell’s operational efficiency results from “mass customization” staying close to the customers by using Web-based order entry model that can build & ship a customizes PC to any of its millions of consumers only in few days.


Survival Introduction of ATMs


MIS – Definitions

MIS is defined as a system which provides information support for decision-making in the organisation

MIS is defined as the system of man & machine for providing the information to support the operations, the management & the decision-making functions in the organization

MIS is defines as a system based on database of the organisation evolved for

the purposed of providing information to the people in the organisaton.


In order to have a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:

Handling of voluminous data & transaction

Confirmation of the validity of data

Complex processing of data

Quick search & retrieval

Mass storage

Communication of he information to the user on time

Fulfilling the changing needs of information


Senior Management

Middle ManagementScientists & knowledge Workers, Managers

Operational management Production & Service Workers

Levels of Organisation &Activities


Senior Management- makes long-term strategic decisions about products & services as well as ensures financial performance of the firm.

Middle management- carries out the programs & plans of senior management

Knowledge workers such as engineers, managers, architects, design products /services &create new knowledge for the firm

Operational Management- Data workers such as secretaries/clerks, assist paper work at all level of the firm. Production worker produce the product & deliver the service.


TechnologyComputer hardware is the physical equipment used for input, processing & output

activities in an information system.

Computer software consists of the detailed , programmed instructions that control & coordinate the computer hardware components in an information system.

Data Management technology consists of the software governing the organisation of data on physical storage media

Networking & Telecommunication technology consisting of both physical devices & software, links the various pieces of hardware & transfers the data from one physical location to another.

The world’s largest used network is the Internet.


Data:

The term ‘data’ represent Facts or figures about an event/object/entity

Eg:USN, Name, Branch, DOB, Sex... etc,Represents data about the entity/object student

Acc#, prev_bal, amt_credited, new BAL... Etc,Represents data about the event of bank transaction

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Information:Information is the data that has been processed into a form that is

meaningful to the recipient in order to take appropriate actions/decisions

E.g.: Summing all the marks and finding the average of marks scored by students to declare the class obtained. Searching all the customers in the bank who have not remitted the last 3 installments towards loan to send reminderTerms data and information are interchangeably used in many context but in reality the two are different

In a vague way, data is like the raw material for processing and information is like the finished product of processingInformation of one processing may become data for another processing


Attributes of data:

The quality of data/information depends on the attributes associated with it

- Accuracy- Timeliness- Completeness- Reliability- Relevance- Source

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Levels of People:

3 levels of people are involved in any typical organization

- Operational level Management

- Middle level Management

- Top level Management


Operational management involved in •planning•scheduling•controlling and•decision making for routine operations

Unit manager, supervisorEg: production of number of items to be manufactured/fabricated per unit to meet the production target


Middle management involved in•short term planning• setting targets•controlling•business functions

Production manager, purchase managerE.g.: A production mangers sets the target for production of number of items for next quarter based on demand from the marketing division and plan to ship the same across business centers.


Top management involved in•goal setting•strategic planning•evolving business plans•implementation of plans

Managing Director, CEO, CAO, CE, Chairman

Eg: Planning for production of new product


Firm Profitability & Strategic Position

Supply Chain Management

Enterprise Management

Customer Management

Knowledge Management

DataCollection & Storage

Transformation in to business system

Dissemination

Planning Coordinating Controlling Modeling & Decision Making

THE BUSINESS INFORMATION VALUE CHAIN

Information Processing activities Management Activities

Business Processes


Programmed decisions:These decisions are characterized by large volume of data and

predefined•rules•procedures•Algorithms

Decisions can automated easily

Handled by operational management

Decisions are structured and frequency for decision is frequent

The result of the decision guarantees optimal solution

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Non-programmed decisions: These decisions do not have pre-established

•rules•procedures•algorithms•data requirements are not known advance

Cannot be automated easily and completely

Environmental, social, technical information is required which keep changing with respect to time, geographical location

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Unstructured decisions due to change in type of parameters and number of parameters keep changing

The outcome of the decision will not guarantee optimal solution but it may be near to optimal solution

E.g: Decision Support systems – interactive information systems that support/help in taking unstructured/ non-programmed decisions

JIT – Just-In-Time production decisions

TQM – Total Quality Management decisions


Accounting

Finance

Personnel

Public relations

Sales

Market research

Production

Purchasing

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Accounting-

Profit/loss statement, cash flow, inventory control, payroll, cost control, cost allocation& expense classification.

Users Mgt seeks information relevant to its decision making such as data on

investments in new projects, current financial position of the firm & the control of expenses.

Plant managers seek information relevant t material, labour & Overhead costs.

Sales managers needs the information about contribution margin to different states.


FinanceFinance dept ins in charge of activities related to borrowing, funding &

ascertaining necessary liquidity.

Data related to capital structure, no. of shareholders, & the maturity date of debit & treasury stocks must be available.

Data related to prime interest rates, capital & market conditions must be maintained

Users

Top Mgt


Public Relations

Bridges the gap between the outside world & the organisation.

Union contract negotiations, scholarship & educational; contributions & service rendered to the community are the typical information aspects maintained by the dept.


SalesData in the sales dept are used to produce a flow indicative information

pertaining to regional & total sale forecasts, actual ales, performance reports etc.

Users Sales managers use periodic report with breakdown sales by products in

evaluating the contribution margin of each territory.

The Mgt must be given information on significant deviations from predetermined forecasts.

The Accounts dept receives daily documentary evidences & information related to cash & credit sales.


Market research

MR dept gathers information pertaining to the firm’s market potential, consumer behaviour & competitive circumstances.

Mgt must be furnished with information pertinent to mkt strategy & trends.

E.g. A manufacturer has designed software for the users of a major hardware manufacturer.

The firm’s ability to achieve its sales forecast was hindered when the MR dept failed to predict & account for a major modification that took place in the hardware feature which made the firm's products quite obsolete.


Production Data relating to utilization of materials, scheduling priority, equipments &

facilities.

Periodic reports are generated & informed to the plant managers

Control of manufacturing cost is the primary objective

Quality Control dept must be furnished with periodic reports containing the no. of units produced & no. of production batches in order to determine the sample sixe for quality production.


PurchasingPurchasing dept is responsible for receiving a constant flow of RMs

machinery, equipments & office supplies.

Purchase dept collect the information about various sources of supplies, favourable bids, terms of delivery & quantity discounts.

Users The accounts payable division needs documentary evidence supporting

various supplier claims

Warehouse-keepers must be furnished with copies of purchase acquisition forms relating to inflow of raw materials & supplies.


Government

Auditor

Shareholders & Prospective Investors

Customer


Government- It requires various reports in periodic intervals about income, tax matters & other regulations.

AuditorAn external auditor is responsible for determining the validity of the firm’s

financial statements.

He seeks multipurpose information about A/Cs receivable, A/Cs payable, petty cash vouchers, depreciation schedules & inventory evaluation sheets etc with supporting evidence.


Shareholders & Prospective Investors They are interested in information relating to the interim & annual earnings,

earmarking of retained earnings, & projections of future expansion.

Investors want to be informed about material decisions affecting the firm, asset valuation etc

Customer


Functional Business Processes

FUNCTIONAL AREA BUSINESS PROCESSES

Manufacturing Assembling the productChecking the qualityProducing bills of materials

Sales & Marketing Identifying customersMaking customers aware of the productSelling the product

Finance & Accounting Paying creditorsCreating financial statementsManaging cash accounts

Human Resources Hiring employeesEvaluating employees' job performanceRemuneration & enrolling employees in benefit plans


Sales

Accounting

Manufacturing

Generate order

Submit Order

Check credit Approve Credit Generate

invoice

Assemble product

Ship Product

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THE ORDER FULFILLMENT PROCESS


TYPES OF INFORMATION SYSTEMS

Sales & marketing Systems

Manufacturing & Production Systems

Finance & Accounting Systems

Human Resources System


Sales & Marketing Systems

Sales & Mktg System helps the senior Mgt to monitor trends affecting new products & sales opportunities, support planning for new products & services, & monitor the performance of competitors.

S&M System aids the middle mgt by supporting mktg research & by analyzing advertising & promotional campaigns, pricing decisions, & sales performances

S&M System assist operational management & employees in locating & contacting prospective customers, tracking sales, processing orders & providing customer service support.

SYSTEM DESCRIPTION GROUPS SERVED

Order processing Enter, Process & track order Operational Mgt & employees

Pricing Analysis Determining prices for products & services

Middle management

Sales Trend forecasting Prepare five-year sales forecasts Senior Management

EXAMPLES OF S&M INFORMATION SYSTEMS


Manufacturing & Production Systems

It deals with the planning, development, & maintenance of production facilities, the establishment of production goals, procurement, storage, & availability of production materials, & the scheduling of equipments, facilities, materials & labour required to fashion finished product.

EXAMPLES OF M&P INFORMATION SYSTEMS


Machine Control Control the actions of machines & equipments

Operational Mgt

Production Planning Decides when & how many products should be produced

Middle management

Facilities Location Decides when to locate new production facilities

Senior Management


Finance & Accounting Systems

The Finance dept is responsible for managing the firm’s financial assets such as cash, stocks, bonds, & other investments to maximize the returns on these financial assets.

The finance function is also in charge of managing the capitalization of the firm

To determine whether the firm is getting the best returns on its investments, the finance function must obtain a considerable amount of information form external sources

The Accounting Dept is responsible for maintaining & managing the firm’s financial records- receipts, disbursements, depreciation etc.


Accounts receivables Tracks money owed the firm Operational Mgt

Budgeting Prepare short-term budgets Middle management

Profit Planning Plans long-term profit Senior Management

EXAMPLES OF F&A INFORMATION SYSTEMS


Human Resources systemThe HR function is responsible for attracting, developing & maintain the firm’s workforce. HRIS supports activities such as identifying potential employees, maintaining complete record of existing employees, & creating programs to develop employee’s talents & skills.

HRIS helps senior mgt to identify the human resource requirements (skills, educational levels, types of positions, etc) for meeting the firm’s long term business plans

Middle mgt uses HRIS to monitor & analyze the recruitment, allocation & compensation of employees. Operational Mgt uses HRIs to track the recruitment & placement of firm’s employees.


Training & development Tracks employee training, skills, & performance appraisals

Operational Mgt

Compensation analysis Monitors the range & distribution f employees wages, salaries &benefits

Middle management

HR Planning Plans the long-term labour force needs of the organisation

Senior Management

EXAMPLES OF HR INFORMATION SYSTEMS


CONCLUSION

“ SURVIVAL OF THE FITTEST”

Gone are the days of managing the business without implementation of an effective information system in the organisation.

To retain a competitive position in the modern competitive, where things change with blink of an eye, it is very much essential for every organisation to implement an effective information system in the organization

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MIS-1

Documents

blend of information

power of information

information system cbis

system new goals

retail link system

system of man machine

output information

information managers