Management Information

System
MBA Sem IV
Faculty of Management Studies
The Maharaja Sayajirao University of Baroda

Amit Johri
 Introducing MIS
21st century enterprises are e-Enterprises, that run
their major operations on Internet/Web and
WAN, spread over large area.
Starting ‘ from Customer to finishing at Customer:
Customer Ordering to Delivery to Customer
Service’
e-Business enterprise has completely digitalized all
its operations – “Digital Firm”
Digital describes electronic technology that
generates, captures, validates and stores, and
processes data in terms of two states: 0 and 1
 MIS a Business Function
Management Information System is a business
function just as operations, marketing, finance,
and human resources.
MIS is the function that plans for, develops,
implements, and maintains IT hardware, software
and applications that people use to support the
goals of an organization.
To perform the MIS function effectively,
organizations today, have an internal IT
department, IS or MIS
 Business Success
Business Success – IT, Information, People
• Information
• IT Resources People use IT to work with
Information
• IT Cultures An organization’s culture plays a
large role in determining how successfully it
will share information. An organization’s IT
culture can directly affect its ability to
compete in the global market
 System
• A system is a composite entity made up of
inter-related or inter-dependent functional
units which act in co-ordination under a
common control for achieving a common
objective
• A set of interacting elements responding to
inputs to produce outputs
 Information Technology
IT is the combination of computer technology (HW+SW) with
telecommunications technology (data, image and voice networks)
IT is any computer – based tool that people use to work with information and
support the information and information processing needs of an
organization
IT is concerned with technology and other aspects of managing and
processing information. IT deals with the use of computers and software
to convert, store, protect, process, transmit, and retrieve information
IT is an enabler of business success and innovation and is most useful when it
leverages the talents of people
Organisations use IT to capture, process, organize, distribute and massage
information
IT enables an organisation to:
• Integrate all functional areas and the tasks they perform
• Gain an enterprise-wide view of its opeartions
 IT & IS
• Efficiently and Effectively utilize resources
• Realize tremendous market and industry growth by gaining insight into the
market at large and insight into internal opeartions

IT → Business Success ← Information

↑
People
IS is an arrangement of people, data, processes, and IT that interact to collect,
process, store and provide as output the information needed to support
an organisation
‘Software Life Cycle’ – begins when an application is first conceived and ends
when it is no longer in use. It includes aspects such as initial concept,
requirements analysis, functional design, internal design, documentation
planning, test planning, coding, document preparation, integration,
testing, maintenance, updates, retesting, phase-out, agile sprints and
other aspects
 MIS Scope
MIS supports business processes and operations, decision making, and
competitive strategies
• MIS involves collecting, recording, storing and processing
information including:
• Accounting records such as sales, purchase, investment and payroll
information, processed into financial statements such as income
statements, balance sheet, ledgers, management reports and so on
• Operations records such as inventory, work-in-process, equipment
repair and maintenance, supply chain and other
production/operations information, processed into production
schedules, production controllers, inventory systems and
production monitoring systems
• Human Resource records such as personnel, salary and
employment history information processed into employee expense
reports and performance based reports
 Contd…..
• Marketing records such as customer profiles, customer
purchase history, marketing research, advertising and other
marketing information processed into advertisement
reports, marketing plans and sales activity reports
• Strategic records such as business intelligence, competitor
analysis, industry analysis, corporate objectives and other
strategic information processed into industry trends report,
market share reports, mission statements and portfolio
models
The bottom line is that MIS uses all of these to implement,
control and monitor plans, strategies, tactics, new
products, new business models or new business ventures
 Business Need & MIS Characteristics
The business need is “Getting Right Information, to the Right People,
at the Right Time through the Right Delivery Channel”
MIS IS THE ANSWER
Characteristics of MIS
• Management Oriented
• Management Directed
• Common Data Flows
• Heavy Planning Element
• Subsystems Concept
• Flexibility and Ease of Use
• Database
• Web Enabled
• Distributed Data Processing
 What is MIS?
Data Processing/Information Processing

Data->Process->Information->Good Decisions
->Efficient Task->Successful goal achievements
“MIS is the Information System(s) developed by
an organization to run its management system
(comprising management functions, business
functions and decision making processes)”
 Definition(s) MIS

• The MIS is defined as a system which provides

information support for decision-making in the
organization
• The MIS is defined as an integrated system of
man and machine for providing the information
to support the operations, the management and
the decision making function in the organization
• The MIS is defined as a system based on the
database of the organization evolved for the
purpose of providing information to the people in
the organization
IS Structure of conventional design of
MIS
Executive Information Systems(EIS)
Data Warehousing and Mining Systems
Exception Reporting Systems
Periodical Reporting Systems
ERP, SCM,CRM and Homegrown legacy systems
Basic Data & Information Capturing and TPS
MIS model of a Digital Firm focusing
on Strategy
Dashboard Scorecard Balance Score Card
Executive Information Systems
Knowledge Mgmt, Content Mgmt Systems
Data Warehousing and Mining Systems
ERP, SCM, CRM and Home grown systems
Basic Data and Information Capturing and TPS
 Necessity of MIS (Systems) Approach
• Increasing complexity of Business – Greater size, Complicated forms
of organization, Environmental restraints, Accelerating changes in
technical and information aspects
• Technological Revolution – In transportation, communication,
agriculture, manufacturing. Changes will continue and will demand
giant steps in improved management
• Research & Development – The product life cycle has become short
and by its very nature Research is a gamble – but the only risk that
is greater than doing research is not doing it
• Product Changes – Customer sophistication
• Information Explosion – Information fatigue syndrome, Information
obesity: More information but less knowledge
• Knowing is Knowing: Doing is Doing: Knowing is not Doing: Leading
to loss of concentration and Loss of Focus
 Contd…..
Over a period of time, the concepts of end-user
computing using multiple databases emerged.
This is decentralization of the system and the
user of the information becoming independent of
computer professionals.
The concept of MIS changed to a Decision making
System. MIS thus provides computing facility to
the end-user and gives a variety of decision
making tools to the user of the system.
 Physical View of MIS
• Integrated IS Structure
EIS
Business Information Systems
Mission Critical Applications
Functional Information Subsystems
Databases and Knowledge Base
Data Processing and Analysis Systems
OLTP, Data and Validation Systems
 Organization as a System
• H J Levitts Model
Tasks
People Structure
Goal
Technology Culture

Sigmoid S-Curve MIS Product

Process Phase vs. Time
Introduction Growth Maturity Decline
 Changes occurring in progressive
organizations
Three changes are now occurring in progressive
organizations:
• Management has become system oriented and more
sophisticated in management techniques
• Information is planned for and made available to
managers as needed
• A system of information ties planning and control by
managers to operational system of information
The combined result is MIS. The MIS provides a system of
information and method of aiding managers in solving
problems and making rational decisions
 Management Hierarchy
Informational requirements of a manager depend on his level
in the organization. Higher managers require summarized
information to make long–range plans and to attain
objectives. Lower-level managers need detailed
information to make day-to-day control decisions.
• Strategic planning (performed by the few high level
managers)
• Management control (performed by larger number of
middle-level department managers)
• Operational control (performed by a very large number of
supervisors to enforce day-to-day rules and regulations of
the business)
 Management Hierarchy
Top Management
Policies Plans Objectives Budgets
↓ ↑ ↓ ↑ ↑ ↓
Revenue Costs Profits
Middle Management
Schedules Measurements
↑ ↓ ↑ ↓ ↑ ↓
Goods Services Performance
Operating Management
 MIS
ISs developed to provide accurate, timely and relevant
information that helps managers in effective decision
making are known as MIS. A MIS is essential for
organizations because
• It emphasizes the management orientation of information
systems. MIS focuses on providing support for management
decision making and not merely on processing of data
generated by business operations
• It emphasizes that business applications be viewed as inter-
related and integrated computer-based information
systems and not as independent data processing jobs
 Three Major Types of MIS
• Information Reporting Systems
Provide managerial end-users with information that support
their day-to-day decision making needs. These systems
produce reports and display outputs
Contents and formats – outputs – pre-specified
• Decisions Support Systems
Are management information systems that use decision
models and specialized databases to assist the decision
making processes of managerial end-users
• Executive Information Systems
Are management information systems that meet the
requirements of the top management
 What’s the difference between a
FUNCTION and PROCESS?
• Business Function: Related sets of specialized activities carried out
by an organization. For efficiency – keeping people who do the
same thing together, often called department.
• Business Process: The way in which the work is organized and
coordinated in an organization to add value.
A process is a structured, measured set of activities designed to
produce a specified output for a particular customer or market. It
implies a strong emphasis on ‘How’ the work is done within an
organization, in contrast to a Product Focus emphasis on ‘What’?
The set of activities performed across the organization creating an
output of value to the organization (or to the Customer – Internal
or External)
 Contd…..
Every process has a customer – Internal or External to the
organization
The scope of process runs across the department and
functions and ends up in substantial value addition
which can be measured against the value expectation
of a customer.
According to Davenport: “A business process is a set of
logically related tasks that use the resources of an
organization to achieve a defined business outcome”
A process has a clear beginning and an end, and clearly
identified inputs and outputs. Processes are cross-
functional and not restricted within a single function
Business Process Re-engineering(BPR)
A successful BPR can result in dramatic performance
improvements, increase in profits, better business
practices, enormous cost reductions, dramatic
improvements in productivity and so on. It can also create
substantial improvements in quality, customer service,
employee satisfaction, profitability and other business
goals.
BPR can potentially require significant changes throughout an
organization.
To facilitate an effective implementation of MIS, BPR needs to
be initiated for the purpose of arriving at “GAP ANALYSIS”
to determine what changes are needed in the company or
in the system.
 BPR Principles
• Several jobs are combined into one
• Workers make decisions
• The steps in a process are performed in a natural order
• Processes have multiple versions
• Work is performed where it makes the most sense
• Checks and controls are reduced
• Reconciliation is minimized
• A case manager provides a single point of contact
• Hybrid centralized/decentralized operations are
prevalent
 BPR – Different Phases
• Begin organizational change
• Building the re-engineering organization
• Identifying BPR opportunity
• Understanding the existing process
• Blueprint the new business systems
• Perform the transformation
 Building a MIS

<- <- <- <- <-

Business Business Business Organization MIS Database
Strategy Model Process
-> -> -> -> ->

The organization is a blend of principles, theories and

practices of the Management, Information and System
giving rise to a single product known as Management
Information System
 Contd…..
MIS is a dynamic concept subject to change, time and again
with the change in the business management processes. It
continuously interacts with the internal and external
environments of business and provides a corrective
mechanism in the system so that the changed needs of
information are met effectively.
The MIS, therefore, is a dynamic design, whose primary
objective is to provide the information for decision making
and it is developed considering the organizational factors
The goals and objectives of the MIS are the products of
business goals and objectives. It helps indirectly to pull the
entire organization in one direction towards the corporate
goals and objectives by providing the relevant information
to the people in the organization
 Development Process of MIS
The plan for development is a basic necessity for MIS. In MIS, information is
recognized as a major resource like capital, time and capacity. And if this
resource is to be managed well, it calls upon the management to plan for
it and control it for appropriate use in the organization.
Steps of MIS Development Process
1. Identify business goals
2. Determine critical success factors
3. Develop business strategy and IS strategies
4. Identify critical business applications
5. Make decision analysis and enumerate operational and strategic
decisions
6. Develop business performance indicators
7. Identify information entities to decision support for business
8. Determine IS structure to generate information to build MIS
9. Build MIS superset as prescribed in general model of MIS
 Implementation of MIS
The implementation of the system is a management process.
It brings about organizational change, it affects people and
changes their work style. The process evokes a behavior
response which could either be favorable or unfavorable
depending upon the strategy of system implementation. In
the process, the system designer acts as a change agent or
a catalyst. For a successful implementation one has to
handle the human factor carefully
MIS Implementation Procedure
1. Planning the implementation: After its design, the
organization should plan for its implementation. The
planning stage should include Identification of tasks for
implementation, Relationship establishment among activity
and establishing of MIS
 Contd…..
2. Acquisition of Facilities: For installation of new system or to replace
current system the Manager should prepare a proposal for
approval from the management by considering space
requirement, movement of personnel and location for utility
outlets and controls
3. Procedure Development: Activities such as evaluation, selection of
hardware, purchase or development of software, testing and
implementation strategies
4. Generate files and Formats: The MIS manager should generate files
and formats for storing actual data. Each information/data should
be stored in a separate file so that the same can be utilized by
calling the particular data only without going through the entire
file, the file’s format should be such. It requires checklist data,
format data, storage forms and other remarks in database
 Contd…..
5. Testing of System: Tests should be performed in
accordance with the specifications at the
implementation stage consisting of component
test, sub-system test and total system test
6. Evaluation and Maintenance of System: The
performance should be evaluated in order to find
cost effectiveness and efficacy of the system with
minimum errors due to designs , environmental
changes or services. The periodical evaluation of
the system is required to safeguard the system
from causing any corruption to the data
 Types of Information System
Information systems are of two types:
1. Information Systems for Business Operations
Information systems have always been needed to process data
generated by and used in business operations.
Such Operations Information Systems produce a variety of
information products for internal and external use, but
they do not emphasize the specific information products
that can best be used by managers. These include:
• Transaction Processing System
• Process Control Systems
• Office Automation Systems
 Contd…..
2. Information Systems for Management
Decision Making: When information systems
are designed to provide accurate, timely and
relevant information needed for effective
decision making by managers, they are called
MISs
• Information Reporting Systems
• Decision Support Systems
• Executive Information Systems
 Transaction Processing systems
TPS are cross-functional information systems that process data resulting from
the occurrence of business transactions. Transactions are events that
occur as part of doing business, such as sales, purchases, deposits,
withdrawals, refunds and payments. Transaction processing activities are
needed to capture and process data, or the operations of a business
would grind to a halt.
For example., in the case of a ticket reservation system, say Railways, the TPS
data contains the location of available seats, in the case of an order , this
data contains a list of products available for sale, their price and related
data. A ticket reservation system, displays a message on the terminal
indicating seats sold out to people. It also prints the tickets .
TPSs are IS designed to process business events and transactions. TPSs
process transactions in two ways:
1. Batch Processing
2. On-line Processing
Exs: Payroll, Inventory management, Order tracking and Order processing
 Office Automation Systems
An OAS facilitates everyday information processing tasks in offices and
business organizations. These systems use a wide range of tools
such as spreadsheets, word processors and presentation packages.
Although telephones, e-mail, v-mail and fax can be included in this
category, we treat communication systems as a separate category.
Office automation means the complete integration of:
• Word Processing
• Electronic filing
• Diary management
• Communications, including electronic mail, fax
These functions are the basic requirements of any office or
department within an organization. Office automation aims to
organize the functions in such a way that they do not have to be
carried out on a variety of equipment
 OAS
OAS help in increasing personal productivity, reduce
“paper warfare”, are integrated and designed for
easy operation. They are,
• targeted at meeting the knowledge needs of
data workers within the organization
• Tend to process data workers rather than create
information. Primarily involved in information
use, manipulation and dissemination
• Handle and manage documents, scheduling and
communication
 MIS
MIS is an IS used to produce scheduled and ad hoc reports to support
the ongoing and recurring decision-making activities associated
with managing an entire business or a functional area thereof.
The Sales Manager may use the computer to get the instantaneous
displays about the sales results of the products and to access
weekly sales analysis reports that evaluate sales made by each SR.
TPS MIS
Order file ->Order processing system MIS files
Prodn master file->MRP system Sales data, ->MIS->Reports
Accounting files->General ledger system Unit product
cost data, Product
change data, Expense
data
Managers
 Contd…..
Three TPSs supply summarized data at the end of the time
period to the MIS reporting system. Managers gain access
to the organizational data through the MIS, which provides
them appropriate reports.
MIS,
• Provides managers with reports and in some cases, online
access to the organization’s current performance and
historical records
• Focus entirely on internal events, providing the information
for short-term planning and decision-making
• Summaries and report on operations of the organization,
dependent on the underlying TPS for their data
 Decision Support System
Not all decisions are recurring in nature. Some occur infrequently. DSSs
are aimed at assisting managers who take decisions which are non-
repetitive or unique in nature. DSSs give interactive computer
support to managers during the decision-making process.
For ex, Advertising managers may use an ESS package to do “what-if”
analysis as they test the impact of alternative advertising budgets
on the forecasted sales of new products.
DSS can be divided into two categories:
• Data driven to mine customer data gathered from their websites
and from enterprise systems
• Model driven (standalone systems) use some type of model to
perform “what-if” and other analysis
 Goals/Benefits
DSSs are flexible, adaptable and quick. The user controls the input and
output. They support the decision process and often are
sophisticated modeling tools so that the managers can make
simulations and predictions
• They serve the need of the management level
• Focus on helping managers make decisions that are semi-
structured, unique or rapidly changing and not easily specified in
advance
• Use internal information from TPS and MIS as also information from
external sources
• Has greater analytical power than other systems, incorporate
modeling tools, aggregation and analysis tools and support what-if
scenarios
• Provide user-friendly and interactive tools
 Executive Support Systems
ESSs provide critical information in easy-to-use displays to a variety of
managers at the strategic level in an organization. For ex, Top
Executives may use touch screen terminals to instantly view text
and graphics displays that highlight key areas of organizational and
competitive performance. These systems provide high-level
summary data and trend analysis at the touch of a button, using
graphics as a way of presenting the information. The Executive’s PC
with telecom links are often made to public databases and WWW,
so that external data can be browsed and incorporated into while
making strategic decisions
EISs provide a computing and communication environment to Senior
managers to support strategic decisions. They draw data from the
MIS and allow communication with external sources of information.
But unlike DSS, they are not designed to use analytical models for
specific problem solving. ESS are designed to facilitate Senior
Manager’s access to information quickly and effectively
 Goals/Benefits
An EIS/ESS provides executives information in a readily accessible, interactive
format
• Serves the strategic level of the organization
• Address unstructured decisions and create a generalized computing and
communication environment, rather than providing any fixed application
or specific capability. Such systems are not designed to solve specific
problems, but to tackle a changing array of problems
• Are designed to incorporate data about external events, such as new tax
laws or competitors , and also draw summarized information from internal
MIS and DSS
• Filter, compress and track critical data, emphasizing the reduction of time
and effort required to obtain information useful to executive management
• Employs advanced graphics software to provide highly visual and easy-to-
use representations of complex information and current trends but they
tend not to provide analytical models
Information Systems Interrelationships
• TPS generally feeds all other systems
• MIS takes the inputs from TPS and produces
summary reports for managers to enable them in
operational decision making
• MIS indicates when a DSS is needed and provide
input for them to crunch
• ESS takes all the internal data, usually summary
data, from MIS and DSS.
• Output data from one IS is the input data for the
other
Applications of Information System
• Manufacturing and Production System
M & P systems supply data to operate, monitor
and control the production process, e.g.,
purchasing, receiving, shipping, process
control, robotics, inventory systems,
scheduling, engineering, operations, quality
control, resource management etc.
System Description Organizational
Level
Machine control Control the Operational
actions of
machines and
 Sales and Marketing System
S & M systems help the firm identify customers
for the firm’s products or services, develop
products and services to meet customer
needs, promote products and services, sell the
m, and provide ongoing customer support
System Description Organizational
Level
Order Processing Enter, process and Operational
track orders
Market analysis Identify customers Management
and markets, data
on demographics,
markets, consumer
 Finance and Accounting System
F & A systems maintain records concerning the flow
of funds in the firm and produce financial
statements, such as balance sheets and income
statements. E.g., for budgeting : General ledger,
Billing: cost accounting, Accounts
receivable/Payable, funds management, Payroll
Visa’s credit card payment system.
Financial Systems: Cash management, loan
management, check processing, securities trading
 Contd…..

System Description Organizational level

Accounts receivable Track money owed by the Operational
firm
Budgeting Prepare short term Management
budgets
Profit Planning Plan long-term profits Strategic
 Human Resource System
HR systems deal with recruitment, placement,
performance evaluation, compensation and
career development of the firm’s employees.
Ex: personal record keeping, applicant
tracking, positions, training and skills, benefits
System Description Organizational
level
T&D Track employee Operational
training, skills and
performance
appraisals
Compensation Monitor the range Management
Functional Perspectives of Information
Systems
A. Marketing Information Systems
Marketing activities are directed towards planning, promoting and selling goods and
services to satisfy the needs of customers and the objectives of the organization.
Marketing Iss support decision making regarding the marketing mix. These include
Product, Price, Place, Promotion.
In order to support decision making on the marketing mix, a marketing IS draws on
several sources of data and information: Boundary spanning and TPSubsystems.
A marketing IS relies on external information to a far greater degree than other
organizational information systems. Two subsystems for boundary spanning –
bringing into the firm data and information about the market place.
Marketing Research collects data on actual and potential customers. Identification of
customer needs is a fundamental starting point for TQM. Ecommerce on the web
helps to compile statistics on actual buyer behavior. MR software supports
statistical analysis of data, enabling firms to correlate buyer behavior with
geographic/demographic/psychographic variables.
Marketing (competitive) intelligence gathers and interprets data about firm’s
competitors and disseminates the information to appropriate users.
 Marketing Mix Subsystems
The marketing mix subsystems support decision making regarding product
introduction, pricing, promotion (advertising and personal selling), and
distribution. These decisions are integrated into the sales forecast and marketing
plans against which the ongoing sales results are compared
1. Product subsystem
Helps to plan introduction of new products. The subsystem should support balancing
the degree of risk in the overall new product portfolio, with more aggressive
competitors assuming higher degrees of risk for a potentially higher payoff.
Although decisions regarding introduction of new products are unstructured, ISs
support this process in several ways
1. Professional support systems assist designers in their knowledge work
2. DSSs are used to evaluate proposed new products
3. With a DSS, the marketing manager can score the desirability of the new product
4. Electronic meeting systems help bring the expertise of people dispersed in space
and time to bear on the problem
5. Information derived from marketing intelligence and research is vital in
evaluating new products
 Place subsystem
Assists decision makers in making the product available to the
customers at the right place and at the right time.
Helps plan the distribution channels for the product and track
its performance.
The use of IT has enabled the availability of information on
product movement in the distribution channel. Examples
include:
• Bar coded Universal Product Code (UPC)
• Point-of-sale (POS) scanning
• Electronic Data Interchange (EDI)
• Supports just-in-time product delivery and customized
delivery
 Promotion Subsystem
Supports both personal selling and advertising.
Media selection packages assist in selecting a mix of avenues to persuade the
potential purchaser, including direct mail, TV, print media, and the electronic
media such as the Internet and Web. The effectiveness of the selected media mix
is monitored and its composition is continually adjusted.
Database marketing relies on the accumulation and use of extensive databases to
segment potential customers and reach them with personalized promotional
information.
Role of telemarketing has increased supported by IT
Sales management is supported with IT. Customer profitability analysis helps identify
high-profit and high-growth customers and target marketing efforts in order to
retain and develop these accounts.
Sales force automation, involves equipping salespeople with portable computers tied
with the corporate information system, providing instantaneous access to
information and freeing them from the reporting paper work
 Price subsystem
Pricing decisions find a degree of support from DSSs and
access to databases that contain industry prices. These
unstructured decisions are made in pursuit of the
company’s pricing objectives. General strategies range
from profit maximization to foregoing a part of the
profit in order to increase market share.
ISs provide an opportunity to finely segment customer
groups, and charge different prices depending on the
combination of products and services provided, as well
as the circumstances of the sales transaction.
 Sales Forecasting
Based on the planned marketing mix and outstanding orders, sales are
forecast and a full marketing plan is developed. Sales forecasting is
an area where any quantitative method employed must be
tempered with human insight and experience. The actual sales will
depend to a large degree on the dynamics of the environment.
Qualitative techniques are used for environmental forecasting – an
attempt to predict the social, economic, legal and technological
environment in which the company will try to realize its plans. Sales
forecasting uses techniques such as
• Group Decision making to elicit broad expert opinion
• Scenario analysis in which each scenario in the process is a plausible
future environment
• Extrapolation of trends and cycles through a time-series analysis
 B. Manufacturing Information System
Global competitive pressure of the information society has been highly
pronounced in manufacturing and has radically changed it. The
marketplace today calls for manufacturing that is:
• Lean – highly efficient, using fewer input resources in production
through better engineering and through processes that rely on low
inventories and result in less waste
• Agile – fit for time-based competition. Both the new product design
and order fulfillment are drastically shortened
• Flexible – able to adjust the product to a customer’s preferences
rapidly and cost effectively
• Managed for Quality – by measuring the quality throughout the
production process and following best practices, manufacturers
treat quality as a necessity and not a high price option
Contd…..Structure of Manufacturing IS
IT plays a vital role in the design and manufacturing
processes. TPSs are embedded in the production
process or in other company processes. Data provided
by TPS is used by management support subsystems
which are tightly integrated and interdependent.
Manufacturing Information Subsystem include:
1. Product design and engineering
2. Product scheduling
3. Quality control
4. Facilities planning, production costing, logistics and
inventory subsystems
 C. Accounting and Financial ISs
The financial function of the enterprise consists in taking stock of the
flows of money and other assets into and out of an organization,
ensuring that its available resources are properly used and that the
organization is financially viable. The components include:
Accounts receivable/payable records, Payroll records, Inventory control
records, General ledgers
Financial information systems rely on external sources, such as online
databases and custom produced reports, particularly in the areas of
financial forecasting and funds management. The essential
functions that FISs perform include:
• Financial forecasting and Planning
• Financial control
• Funds management
• Internal auditing
 D. Human Resource ISs
Supports the HR function of an organization with information. A HRIS
has to ensure the appropriate degree of access to a great variety of
internal stakeholders, including:
• The employees of the HR department in performance of their
duties
• All the employees of the firm wishing to inspect their own records
• All employees seeking information regarding open positions or
available benefit plans
• Employees availing computer-assisted training and evaluation
opportunities
• Managers throughout the firm in the process of evaluating their
subordinates and making personnel decisions
• Corporate executives involved in tactical and strategic planning and
control
 TP Subsystems & Databases of HRIS
At the heart of HRIS are its databases, integrated into a single
human resource database. Other databases include:
Applicant dbs, Position inventory, Skills inventory, Benefit
dbs, External dbs
Information subsystems for HR management
Reflect the flow of HRs through the firm, from planning and
recruitment to termination. A sophisticated HRIS includes :
• Human Resource Planning
• Recruiting and workforce management
• Compensation and Benefits
• Government reporting and labor relations support
 Integrating Functional Systems for
superior organizational performance
Functional systems rarely stand alone. This reflects the
fact that the functions they support should, as much as
possible, connect with each other seamlessly in order
to serve the firm’s customers. Customers expect timely
order delivery, often on a just-in-time schedule; quality
inspection to their own standards; flexible credit terms;
post-delivery service and often, participation in the
product design process. IT provides vital support for
integrating internal business processes, cutting across
functional lines and for integrating operations with the
firm’s business partners, its customers and suppliers.
 Technical Perspectives of MIS
The technical aspects to MIS emphasizes mathematics based models to study
ISs, as well as the physical technology and formal capabilities of these
systems. The disciplines that contribute to the technical approach are
computer science, management science and operations research.
Computer science establishes theories of computability, methods of
computation and methods of efficient data storage and access.
Management science emphasizes the development of models for decision
making and management practices. Operations Research focuses on
mathematical techniques for optimizing selected parameters of
organizations, such as transportation, inventory control and transaction
costs.
Technology must be changed and designed, sometimes even “de-optimized”,
to fit organizational and individual needs. Organizations and individuals
should also change through training, learning and planned organizational
change shall allow technology to operate and prosper.
 Impact of MIS on Organization
• MIS creates impact on organization functions and productivity
• With MIS the management of Marketing, Finance, Production,
Sales, Material, Quality control, Personnel becomes efficient
• The tracking and monitoring of the functional targets becomes easy
• MIS helps in forecasting and long-term perspective planning
• MIS gives alert on exceptional situations
• MIS creates information which can be used straightaway or by
blending and analysis, thus saving valuable time
• MIS helps the organization relate to the understanding of the
business itself
 Contd…..
• Each and every person in the organization is a user of the
MIS. This streamlines the operation as everybody is
required to follow and use the system and product and
brings a common understanding
• MIS brings discipline and a high degree of professionalism
in the business operation
• The goals and objectives of the MIS are the product of
Business goals and objectives, it helps indirectly to pull the
entire organization in one direction towards the corporate
goals and objectives
• MIS increases the manager’s ability to perform by utilizing
the Information Technology tools and techniques
 Assignment
• Explain the types of information in depth. What are the
information needs for Human Resource Management,
Finance Management, Marketing Management,
Operations/Production Management.
• Define Information and Management Information
System. Why is there a need for computer based
information system?
• Explain input transaction, applications queries, decision
analysis and action update in
Marketing/HR/Finance/Operations applications of MIS
with example.
 1. Types of Information, Information
needs
1. Classification on Characteristics
• Action vs. No Action inf: Information that induces action, information
that communicates only status of a situation
• Recurring vs. Non-recurring Inf: information generated at regular
intervals-monthly sales reports, stock statements, trial balance. The
financial analysis or the report on the market research study is non-
recurring
• Internal vs. External: information generated through the internal
sources. Information generated through government reports, industry
surveys is external information
2. Classification on Use
• Strategic Information: information for long range planning and directing
the course business should take
• Tactical information: short range decisions to run the business efficiently
• Operational information: information needed for day-to-day operation of
business
 Information needs for HR/Finance
• Attendance, Manpower, Leave, Salary/wages, statutory
deductions, loan and deductions Accidents, Production
data, Skills, Biodata, Family data
• Sales, Purchase, Salary/wages, Inventory, Expenses,
Capital purchase, Fixed deposits, Shareholder’s funds,
Income tax, Sales tax, Excise duty, custom duty, local
taxes, consumption, budgets, fixed assets
• Quantity of production w.r.t a time period, material
requirement and its usage, rejection quantity at each
intermediate stage and the final stage, breahdown
incidence, labour complement with respect to aperiod
 Information, MIS, CBIS
• Information is processed data, placed in a meaningful and
useful context for an end user. Data is subjected to a
“value-added” process where:
1. Its form is aggregated, manipulated and organized
2. Its content is analyzed and evaluated
3. It is placed in a context for human user
• G.B.Davis “MIS is an integrated man/machine system for
providing information to support the operations,
management and decision making function in an
organization”.
• Need of CBIS – time taken to access files, confidentiality
(files can be password protected), Space needed
 3. Input transaction, apps, queries,
decision analysis, action update in
•
Marketing apps of MIS
Input Transaction- Customer order, Order acceptance, Delivery note,
Invoice, debit note, credit note
• Applications- Process oriented accounting apps of marketing. The main
accounting entry is sales in terms of quantity and value. Accounting apps
build data which meets the needs of statutory compliance and operations
update – Product sale, Product family, sales value, GST, dealer, distributor,
customer, excise, zone, area
• Query : the queries are on customer, product, price, stock, sale, and
certain cumulative statistics pertaining to sales. The query may be on
order pending position followed by whether stock exists for allocation to
the order. If the customer order is to be fulfilled by manufacturing, then
whether manufacturing order has been issued and if so, what is its status.
The query could be on assessment of sales performance on single
dimension or multi-dimensions by comparison between two product
groups, customer groups, zones and areas. The query could be on the
performance of overall sales in relation to the budget.
• Control: Control apps help to correct ongoing operational
performance. Apps help to reset the direction or trend in the
development towards desired goals or objectives. Apps help to take
decisions on strategic subjects such as product positioning, pricing,
choice of market segment, design and so on. The control apps in
marketing are designed with a focus for pinpointed attention,
decision and action. It requires considerable understanding of
behavior of the consumer, market, product and competition.
• Reports: 1. Statutory Compliance In marketing, statutory
compliance is related to taxes and duties and filing returns with
government authorities. The reports are GST, excise.
2. Information Update: Product sales ledger, Sales summaries,
Accounts receivables, Orders received and accepted, Sales analysis,
Aging of receivables, contribution analysis, market analysis,
competition analysis
• Decision analysis: Decision analysis reports convey whether
the desired/expected results are realized or not. These
reports tie-up the specific decision to its results. For
example, a decision is taken to launch an advertising
campaign in two segments to test the efficiency of the
campaign. A report analysis pre and post sales of the
campaign will indicate a good campaign or otherwise.
• Action Update: The AU reports will lead to decisions as
price reduction, withdrawal of product from market,
changing the product position, allocating more budget for
expenses, inventory and personnel resources- Sales vs.
Budget, Expenses vs. sales, Sales growth vs. Sales objective,
Sales vs. market segment vs. budget, Stock vs. budgeted
stock levels, complaints vs. number of complaints serviced
 Using Information Systems for
Competitive Advantage
Identifying Competitive Advantages
To survive and thrive, an organization must create a competitive
advantage. A competitive advantage is a product or service that an
organization’s customers place a greater value on than similar
offerings from a competitor. Unfortunately, competitive advantages
are typically temporary because competitors often seek ways to
duplicate the competitive advantage. In turn, organizations must
develop a strategy based on a new competitive advantage.
When an organization is the first to market with a competitive
advantage, it gains a first mover advantage, significantly impacting
its market share. FedEx created a first mover advantage several
years ago when it developed its customer self-service software
allowing people and organizations to request a package pick-up,
print mailing slips, and track packages online
 Contd…..
As organizations develop their competitive advantages, they must pay
close attention to their competition through environmental
scanning. Environmental scanning is the acquisition and analysis of
events and trends in the environment external to an organization. IT
has the opportunity to play an important role in environmental
scanning. For example, Frito Lay, a premier provider of snack foods
such as Cracker Jacks and Cheetos, does not just send its
representatives into grocery stores to stock shelves – they carry
hand-held computers and record the product offerings, inventory
and even product locations of competitors. Frito Lay uses this
information to gain business intelligence on everything from how
well competing products are selling to the strategic placement of its
own products.
 Contd…..
Organizations use three common tools to analyze and develop competitive
advantages:
1. The Five Forces Model Michael Porter Helps determining the relative
attractiveness of an industry – Buyer Power, Supplier Power, Threat of
substitute products or services, Threat of new entrants, Rivalry among
existing competitors
2. The three Generic Strategies Once the relative attractiveness of an
industry is determined and an organization decides to enter that market,
it must formulate a strategy for entering the new market – broad cost
leadership, broad differentiation, a focused strategy
3. Value Chains Once an organization enters a new market using one of
Porter’s 3 generic strategies, it must understand, accept and successfully
execute its business strategy. Every aspect of the organization
contributes in the success or failure of the chosen strategy. The business
processes and the value chain they create play an integral role in
strategy execution.
 Value Creation
A business process is a standardized set of activities that accomplish a
specific task, such as processing a customer’s order. To evaluate the
effectiveness of its business processes, an organization can use
Michael Porter’s value chain approach. An organization creates
value by performing a series of activities that Porter identified as
the value chain. The value chain approach views an organization as
a series of processes, each of which adds value to the product or
service for each customer. To create a competitive advantage, the
value chain must enable the organization to provide unique value to
its customers. In addition to the firm’s own value creating activities,
the firm operates in a value system of vertical activities including
those of upstream suppliers and downstream channel members. To
achieve a competitive advantage, the firm must perform one or
more value-creating activities in a way that creates more overall
value than do competitors. Added value is created through lower
costs or superior benefits to the consumer (differentiation).
 Contd…..
Organizations can add value by offering lower prices or by competing
in a distinctive way. Examining the organization as a value chain
leads to the identification of the important activities that add value
for customers and then finding IT systems that support those
activities. Primary value activities, acquire raw materials and
manufacture, deliver, market, sell and provide after-sales services.
Support value activities, firm infrastructure, human resource
management, technology development and procurement, support
the primary value activities.
The goal here is to survey the customers and ask them the extent to
which they believe each activity adds value to the product or
service. This generates a quantifiable metric, displayed in
percentages, for how each activity adds value(or reduces value).
 Contd…..
The competitive advantage decision then is to 1. target high value-adding
activities to further enhance their value 2. target low value-adding
activities to increase their value or 3. perform some combination of the
two.
Organizations should attempt to use IT to add value to both primary and
support value activities. One example of a primary value activity facilitated
by IT is the development of a marketing campaign management system
that could target marketing campaigns more efficiently, thereby reducing
marketing costs. The system would also help the organization better
pinpoint target market needs, thereby increasing sales. An example of
Support value activity facilitated by IT is the development of a human
resources system that could more efficiently reward employees based on
performance. The system could also identify employees who are at risk of
leaving their jobs, allowing the organization to find additional challenges
or opportunities that would help retain these employees and thus reduce
turnover costs.
 Case: Say “Charge It” with Your Cell
Phone
Wireless operators, credit card companies and retailers are working on
a technology that allows customers to purchase items by using their
cell phones. For example, a customer could purchase a can of soda
by dialing a telephone number on the dispensing machine and have
the charge for the soda show up on the customer’s cell phone bill.
Working prototypes are currently in use in South Korea, Japan and
Europe.
The ability to charge items to a cell phone has significant business
potential because, unlike in the US, credit cards are not nearly as
popular in other countries. In Japan and China, for example, people
are much more likely to have a cell phone than a credit card.
Japanese consumers use credit cards for only 5.6 percent of their
personal spending compared with 33 percent of US consumer
spending.
 Contd…..
The payoff for credit card companies and cell phone
operators from this technology could be enormous. By
associating a credit card with a cell phone, banks and
credit card companies hope to persuade consumers to
buy products, such as soda, with their cell phones
instead of pocket change. Of course, they will reap
transaction fees for each transaction. Mobile phone
operators see the technology as a way to increase
traffic on their networks as well as to position cell
phones as an even more useful and, thus, essential
device for consumers. Retailers envision easier
transactions also leading to more sales.
 Contd…..
MasterCard International and Nokia are currently testing a cell phone
credit card for the US market. The phones have a special chip
programmed with the user’s credit card information and a radio
frequency transmitting circuit. Consumers can simply tap their
phones on a special device at a checkout counter equipped with a
receiving device that costs the retailer about $80. Betsy Foran-
Owens, VP for Product services at MasterCard International,
commented that with this technology, “You don’t even have to get
off your phone to pay. You can just tap this thing down at the
register”. She also noted, “If you’re not going to carry cash around,
what are you going to carry? Your mobile phone”.
The only players who may not look favorably on the technology are
the traditional telephone companies, who must certainly view the
technology as just one more threat to their traditional telephone
business.
 Questions
• Do you view this technology as a potential threat to
traditional telephone companies? If so, what counter
strategies could traditional telephone companies adopt
to prepare for this technology?
• Using Porter’s Five forces describe the barriers to entry
for this new technology.
• Which of Porter’s three generic strategies is this new
technology following?
• Describe the value chain of the business of using cell
phones as a payment method
• What types of regulatory issues might occur due to this
type of technology?
 Strategic Initiatives for Implementing
Competitive Advantages
Supply Chain Management
SCM involves the management of information flows between and
among stages in a supply chain to maximize total supply chain
effectiveness and profitability. The 4 basic components of SCM are:
Supply chain strategy, Supply chain partners, Supply chain
operation, Supply chain Logistics.
Effective and efficient SCM systems can enable an organization to:
• Decrease the power of its buyers
• Increase its own supplier power
• Increase switching costs to reduce the threat of substitute products
or services
• Create entry barriers thereby reducing the threat of new entrants
• Increase efficiencies while seeking a competitive advantage through
cost leadership
 Contd…..
A firm’s supply chain is a network of organizations and business processes for procuring raw materials,
transforming these materials into intermediate and finished products, and distributing the finished
products to customers. It links suppliers, manufacturing plants, distribution centers, retail outlets
and customers to supply goods and services from source through consumption. Materials,
information and payments flow through the supply chain in both directions
Nike’s Supply Chain
transformed finally shipped to
Goods ---Intermediate ---Finished---Distribution---Retailers
Raw products Products Centers and
Materials Components Customers
Returned items
---From Buyer back to seller
SCM software enable the firm to generate demand forecasts for a product and to develop sourcing and
manufacturing plans for that product
Manugistics (JDA software Group) and i2 Technologies are major SCM software vendors and enterprise
software vendors SAP and Oracle-Peoplesoft offer SCM modules
 Customer Relationship Management
CRM involves managing all aspects of a customer relationship
with an organization to increase customer loyalty and
retention and an organization’s profitability. CRM allows an
organization to gain insights into customer’s shopping and
buying behaviors in order to develop and implement
enterprise wide strategies.
Implementing a CRM system can help an organization identify
customers and design specific marketing campaigns
tailored to each customer, thereby increasing customer
spending. A CRM system allows an organization to treat
customers as individuals, gaining important insights into
their buying preferences and behaviors and leading to
increased sales, greater profitability and higher rates of
customer loyalty
 Contd…..
CRM systems examine customers from a multifaceted
perspective. These systems use a set of integrated
applications to address all aspects of the customer
relationship, including customer service, sales and
marketing.
Major CRM application software vendors include Siebel
Systems(acquired by Oracle corp.), Clarify and
Salesforce.com. Enterprise software vendors such as SAP
and Oracle- Peoplesoft, are also active in CRM and feature
tools for integrating their enterprise system modules with
their CRM modules.
CRM systems typically provide software and online tools for
sales, customer service and marketing
 CRM software capabilities
Customer Data
• Sales – Account/Lead/Order management, Sales planning, Field
sales, sales analytics
• Marketing – Campaign/Channel Promotions/Events management,
Market planning, Marketing operations, Marketing analytics
• Service- Service delivery, customer satisfaction/Returns
management, Service planning, Call Center & Help Desk, Service
analytics
• Operational and Analytical CRMs – Operational CRM includes
customer facing apps, such as tools for sales force automation, call
center and customer service support and marketing automation.
Analytical CRM includes apps that analyze customer data generated
by operational CRM apps to provide information for improving
business performance.
 Business Process Reengineering
A business process is a standardized set of activities
that accomplish a specific task. BPR is the analysis
and redesign of workflow within and between
enterprises.
Companies frequently strive to improve their
business processes by performing tasks faster,
cheaper and better.
Creating value for the customer is the leading factor
for instituting BPR, and IT plays an important
enabling role.
 Contd…..
The world is increasingly driven by 3 C’s Customer, Competition and Change
Reengineering is the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, service and speed
IT capabilities should support business processes and business processes should be in
terms of the capabilities IT can provide.
Business processes represent a new approach to coordination across the firm; It’s
promise – and its ultimate impact – is to be the most powerful tool for reducing
the costs of coordination
The capabilities that reflect the roles that IT can play in BPR: transactional,
Geographical, Automatical, Analytical, Informational, sequential, knowledge
management, Tracking, and Disintermediation
Also, innovative uses of IT would inevitably lead many firms to develop new,
coordination-intensive structures, enabling them to coordinate their activities in
ways that were not possible before. Such coordination – intensive structures may
raise the organization’s capabilities and responsiveness, leading to potential
strategic advantages
 BPR Methodology Davenport and
Short (1990)
• Develop the business vision and Process
objectives
• Identify the processes to be redesigned
• Understand and Measure the existing
processes
• Identify IT levers
• Design and Build a Prototype of the new
process
 Enterprise Resource Planning
Enterprise Resource Planning systems provide organizations with
consistency. ERP integrates all departments and functions
throughout an organization into a single IT system(or integrated set
of IT systems) so that employees can make decisions by viewing
enterprise wide information on all business operations. An ERP
system provides a method for effective planning and controlling of
all the resources required to take, make, ship and account for
customer orders in a manufacturing, distribution or service
organization.
ERP Software The many ERP vendors on the market today each offer
different ERP solutions, but the core functions are the same and
focus on financial, accounting, sales, marketing, human resources,
operations and logistics. Vendors differentiate themselves by
offering distinct functionality such as CRM and SCM systems.
 Enterprise Software
ES is built around 1000s of pre-defined business processes that reflect best practices.
SAP, Oracle(with its acquisition of Peoplesoft), SSA Global, Lawson Software, BaaN,
JDEdwards and Microsoft(which sells the Dynamic software suite), RAMCO
ES automate the firm’s internal back-office business processes, enterprise systems
have become more externally oriented and capable of communicating with
customers, suppliers and other organizations
Business Value of Enterprise Systems
• Increasing operational efficiency and providing firm-wide information to help
managers make better decisions
• Enforces standard practices and data so that everyone does business the same way
worldwide
• help firms respond rapidly to customer requests for information or products
• ES include analytical tools for using data captured by the system to evaluate over
all organizational performance
 Case: Consolidating Touchpoints for
Saab
Saab Cars USA imports more than 37,00 Saab sedans, convertibles and
wagons annually and distributes the cars to 220 US dealerships. Saab
competes in the premium automotive market, and its primary rivals
attract customers through aggressive marketing campaigns, reduced
prices and inexpensive financing. Saab decided that the answer to beating
its competition was not to spend capital on additional advertising, but to
invest in Siebel Automotive, a CRM system.
Until recently, the company communicated with its customers through 3
primary channels:1. Dealer network 2. customer assistance centre 3. lead
management centre. Traditionally, each channel maintained its own
customer database and this splintered approach to managing customer
information caused numerous problems for the company. For example, a
prospective customer might receive a direct mail piece from Saab one
week, then an email with an unrelated offer from a third-party marketing
vendor the next week. The local dealer might not know of either activity
and therefore might deliver an ineffective pitch when the customer visited
the showroom that weekend.
 Contd…..
Al fontova, Direct Marketing Manager with Saab Cars USA, stated he
had over 3 million customer records and 55 files at three different
vendors. Analyzing this information in aggregate was complicated,
inefficient and costly.
Saab required a solution that would provide a consolidated customer
view from all three touch points. In 2002, Saab implemented the
Siebel CRM solution, which provides Saab’s call centre employees
with a 360-degree view of each customer, including prior service-
related questions and all the marketing communications they have
received. Known internally as “TouchPoint”, the Siebel app provides
Saab’s dealers with a powerful web-based solution for coordinating
sales and marketing activities. These tracking capabilities enable
Saab to measure the sales results of specific leads, recommend
more efficient selling techniques and target its leads more precisely
in the future.
 Contd…..
Using Siebel Automotive, Saab received the
following benefits:
• Direct marketing costs decreased by 5 percent
• Lead follow up increased from 38 percent to
50 percent
• Customer satisfaction increased from 69
percent to75 percent
• Saab gained a single view of its customers
across multiple channels
 Questions
• Explain how implementing a CRM system enabled
Saab to gain a competitive advantage.
• Estimate the potential impact to Saab’s business
if it had not implemented a CRM system.
• What additional benefits could Saab receive from
implementing a SCM system?
• Create a model of Saab’s potential supply chain.
• How is Saab’s CRM implementation going to
influence its SCM practices?
 Robert Anthony’s Management
Hierarchy
An organization may be conceived in a lot of ways. One
can visualize an organization as a balance sheet or a
function of financial statements , i.e., as a financial
entity or as an organization chart delineating the
decision-making hierarchy levels and formal
communication channels. While both views are
correct, the latter view is more appropriate for
understanding an organization’s MIS.
Anthony in his seminal work elaborated on this view of an
organization as its hierarchy of decision-making. He
focused on the managerial aspects of an organization
and classified the management process into 3 distinct
levels.
 1. Strategic Level
• This requires focusing on the objectives and goals
of the organization, on changes in the objectives,
on the resource requirements to fulfill the
objectives and on the guiding principles and
policies that will govern the acquisition, use and
disposal of resources to attain the objectives. In
short, this role is the most important role in the
management hierarchy and the decisions taken
by managers in this role have a far reaching
impact on the organization. Managers in this role
set the direction in which the organization will
travel. In terms of hierarchy, this lies at the top.
 2. Managerial Control
This requires resources to be acquired and used
effectively and efficiently to attain the
objectives of the organization. This is a middle
management role. Managers in this role take
guidance from the strategic planning hierarchy
and control the activities of the organization
such that the goals set by the higher level are
attained in an efficient and effective manner.
The impact of the decisions of the managers
in this role is of medium term and degree.
 3. Operational Control
This requires that directives as set by the immediate
higher hierarchy is followed and that specific task(s) are
carried out effectively. The decisions at this level have
very little impact on the organization. The organization
behaves in a routine nature where the parameters of
the decision-making process are well laid and certain.
Anthony’s idea of an organization’s hierarchy from the
perspective of managerial activities. As is clear, it is a
three level pyramid with very distinct levels. Each level
has its own set of tasks and decisions to take which
have a varying impact on the organization as a whole.
 Management Levels in Organizations
Management Strategic Planning Management Operational
function control Control
Planning Long-range, high Medium range, Short range, low
impact medium impact impact
Organizing General framework Departmental level Small unit level
Staffing Key senior people Medium level, Operational level
tactical level
Directing General and long Tactics Routine activities
range directives
Controlling Aggregate level Periodic control and Regular and
controlling continuous
exceptions supervision
 Contd…..
For example, if we want to classify the decisions of a
manufacturing firm, the strategic planning will
encompass the annual production planning, annual
budgeting, setting up of new plants and/or installation
of new machinery to upgrade the production process
and other such activities. Management control
activities would include monthly production planning,
maintenance planning and scheduling. Operational
control on the other hand will deal with routine daily
tasks of managing and supervising shifts to exercise
control over the process so that the monthly plans and
schedules as made by the management control level
managers are met.
 Simon’s categorization of Decisions
and Phases of Decision Making
Herbert Simon made key contributions to enhance our
understanding of the decision-making process. Decision
making is a process with distinct stages. He suggested for
the first time the decision-making model of human beings.
His model of decision-making has 3 stages:
1. Intelligence which deals with the problem identification and
the data collection on the problem
2. Design which deals with the generation of alternative
solutions to the problem at hand
3. Choice which is selecting the ‘best’ solution from amongst
the alternative solutions using some criterion
 Intelligence Phase
The first step in which the decision-maker identifies/detects the
problem or opportunity. A problem in management context is
detecting anything that is not according to the plan, rule or
standard. Problem: detection of sudden very high attrition for the
present month by a HR manager among workers. Opportunity
seeking on the other hand is the identification of a promising
circumstance that might lead to better results. Opportunity- a
marketing manager gets to know that one of his competitors will
shut down operations(demand being constant) for some reason in
the next quarter, this means that he will be able to sell more in the
market.
We see that either in the case of a problem or an opportunity,
initiating the decision making process and the first stage is the clear
understanding of the stimulus that triggers this process. Intelligence
phase involves:
a. Problem searching b. Problem formulation
 Problem Searching/Formulation
• For searching the problem, the actual is compared to some
standard. Differences are measured and the differences are
evaluated to determine whether there is any problem or not.
• When the problem is identified, there is always a risk of solving the
wrong problem. In problem formulation, establishing relations with
some problem solved earlier or an analogy proves quite useful.
The search process involves an examination of data both in pre-
defined and in ad-hoc ways. IS support should provide both
capabilities. The IS should itself scan all data and trigger a request
for human examination of situations apparently calling for
attention. Various models should be incorporated in the scanning
and report layouts. Either the system or the organization should
provide communication channels for perceived problems to be
moved up the organization until they can be acted upon
 Design Phase
Design is the process of designing solution outlines for the
problem. Alternative solutions are designed to solve the
same problem. Each alternative solution is evaluated after
gathering data about the solution. The evaluation is done
on the basis of criteria to identify the positive and negative
aspects of each solution. Quantitative tools and models are
used to arrive at these solutions. At this stage the solutions
are only outlines of actual solutions and are meant for
analysis of their suitability alone. A lot of creativity and
innovation is required to design solutions.
The ISs should contain decision models to process data and
generate alternative solutions. It should assist with
checklists, templates of decision processes , scenarios etc.
The models should assist in analyzing the alternatives.
 Choice Phase
It is the stage in which the possible solutions are compared
against one another to find out the most suitable solution.
The best solution may be identified using quantitative tools
like decision tree analysis or qualitative tools like the six
thinking hats technique, force field analysis etc.
Each solution presents a scenario and the problem itself may
have multiple objectives making the choice process
difficult. Also uncertainty about the outcomes and
scenarios make the choice of a single solution difficult.
An IS is most effective if the results of design are presented in
a decision-impelling format. When the choice is made, the
role of the system changes to the collection of data for
further feedback and assessment.
Gorry and Scott-Morton Framework of
MIS
Today’s ISs handle databases and facilitate decision-making.
An MIS deals with information that is systematically and routinely collected in
accordance with a well-defined set of rules. Data collection is a planned
activity for which resources are allocated and rules are defined.
The information provided by an MIS assists managers in planning, organizing,
staffing, coordinating, directing and controlling the operations of an
organization. These steps are viewed as Management control system.
Organizations having planned activities leading to the achievement of the
stated goals, have a control process in place that measures the progress
towards these goals and enables the manager to deduct the deviations
from the original plan in time. It is the responsibility of the management
to take corrective actions. The deviations may be due to environmental
changes or due to the errors made by people
 MIS Features
An MIS has large amount of data as its integral part that is stored and
managed by a database management system.
An MIS must have the following features:
• 1. It must be capable of handling voluminous data. The data as well
as the transactions must be validated
• It must be able to perform operations on the data irrespective of
the complexity of the operations. Often multi-dimensional analysis
is required
• An MIS should facilitate quick search and retrieval of information.
MIS must support mass storage of data and information
• The information must be communicated to the recipient in time.
Moreover the communicated information must be relevant
 Decision Making –Principles and
Process
A MIS is designed by an organization for its smooth functioning. The MIS, a
decision making instrument used by top management, comprises of a set
of controls. These controls cover the basic spheres of the business: its
people, technologies, policies, and procedures. The MIS gathers
information on all the important realms of the business, tabulates the
information and provides meaningful reports.
Features: The MIS presents data such as the organization’s processes,
operating procedures, internal controls and audit preparation, which the
management uses to make decisions. The internal controls for each
department contain guidelines for operation. The flow of work assigned to
employees, their responsibilities and duties, for example, are listed under
internal controls.
MIS facilitates a two-way communication in the organization. The
management communicates to its employees what is expected of them
and how they must accomplish the tasks entrusted. The employees in turn
freely discuss their problems and concerns.
 Contd…..
• “the action of carrying out or carrying into effect”
• Decision making involves the selection of a course of action from among
two or more possible alternatives in order to arrive at a solution for a
given problem”
• Principles: assign priorities, set a time frame, gather and review up-to-
date, cold, hard facts, paint a scenario of desired outcome, Weigh the
pluses against the minuses in getting where we want to be, explore the
ramifications for all involved, use your wisdom/have courage/go with your
gut instinct and decide, put the decision into action, evaluate the outcome
of the decision and steps of action
Each decision we make has risks associated with it. Never risk more than you
can afford to give, Never risk more than you have, Never risk more than
you can get in return, follow your intuition.
And finally, a decision is a commitment and it should be one you are willing to
trust and abide by. Good decisions are those that open up more
possibilities for future choices.
 Steps involved in Decision Making
Process
• Defining/Identifying the managerial problem
• Analyzing the problem
• Developing alternative solutions
• Selecting the best solution out of the available
alternatives
• Converting the decision into action
• Ensuring feedback for followup
Types and Systems of Decision Making
• Decision: A decision is the choice out of several options made by
the decision maker to achieve some objective in a given situation
• Business Decision: Are those which are made in the process of
conducting business to achieve its objectives in a given situation
• Rational Decision Making: A rational decision is one which,
effectively and efficiently, ensure the achievement of the goal for
which the decision is made. If it is raining, it is rational to look for a
cover so that you do not get wet. If you are in business and you
want to make profit, then you must produce goods/offer services
and sell them at a price higher than the cost of production. In
reality there is no right or wrong decision but a rational or irrational
decision. The quality of decision-making is to be judged on the
rationality and not necessarily on the result it produces.
 Contd…..
• Bertram M. Gross suggests 3 dimensions of rationality. First, the
degree of satisfaction of human interest. Second, the degree of
feasibility in achieving the objectives. Third, a consistency in
decision making. If a decision maker shows a consistent behavior in
the process of decision making, then one can say that he meets the
test of rationality.
• Types of Decision Making System: 1. On the basis of knowledge
about the environment-2 types – Closed- If the manager operates
in a known environment and Open-If the manager operates in
unknown environment 2.Based on the degree of knowledge about
the outcome of the events which are yet to take place Certainty-If
the manager has full knowledge of event or outcome Uncertainty- If
the manager does not have any knowledge of event or outcome. 3.
Nature of Decision Programmed-If a decision can be based on a
rule, method or even guideline Non-Programmed- A decision
which cannot be made by using a rule or model
 Types of Decisions
• A good MIS tries to convert a decision-making situation under uncertainty
to the situation under risk and further to certainty. Decision making in the
Operations management is a situation of certainty. This is mainly because
the manager here has fairly good knowledge about the events which are
to take place, has full knowledge of environment and has pre-determined
decision alternatives for choice or for selection.
• Decision making at the middle management level is of the risk type. This is
because of the difficulty in forecasting an event with hundred percent
accuracy and the limited scope of generating the decision alternatives.
• At the top management level, it is a situation of total uncertainty on
account of insufficient knowledge of the external environment and the
difficulty in forecasting business growth on a long-term basis.
• A good MIS design gives adequate support to all the three levels of
management
 Strategies in Decision Making
• Optimizing – the most practical solution to the problem is chosen
from among the list of possible alternatives. Factors to be
considered- significance of the problem, time availability, cost
involved, accessibility of tools and resources, personal values and
beliefs
• Satisficing- “satisfactory” and “sufficient” choose the first
satisfactory option over the best alternative
• Maximax – “maximize the maximums”, a decision making strategy
that openly takes risks because the approach is choosing the
alternatives based on their highest potentials and most favorable
outcomes.
• Maximin – “maximize the minimums”, the decision maker settles
for the alternative with the highest minimum payoff for failures or
negative ooutcomes
 Tools and Techniques
• Cost/Benefit Analysis
• SWOT
• Pareto analysis Focus on major causes for changes that will bring about huge benefits
• Stepladder technique – manage the entry or admission of members in a decision making group,
encourages every member to contribute ideas and alternatives to the group
• Starbursting- process of gaining knowledge on new ideas through brainstorming but the focus is
more on the questions and not on the answers
• PMI – arrive at quick decisions that do not quite have problems. Plus, Minuses, and Interesting
Points
• Paired comparison analysis – determine the relative significance and feasibility of the alternatives
• Decision Trees-choose from among alternatives by foreseeing the possible outcomes or courses of
action
• 5 Why’s Technique-Problem - ”Why?” and “What caused it?” The question why is asked
simultaneously 5 times
• Six Thinking Hats- Look at decisions from various perspectives by thinking out of the box or going
beyond the conventional manner of thinking
 Decision Making Methods
• Pros and Cons Analysis
• Kepner-Tregoe (K-T) Decision Analysis
• Analytic Hierarchy Process(AHP)
• Multi-Attribute Utility theory (MAUT)
• Cost-Benefit Analysis
 Case FFDL
The Flourish Foods and Drinks Ltd. is a company manufacturing
different types of packaged foods and drinks. The product range
consists of more than 50 items and 200 packaging units. The
company’s products are popular throughout the country and the
company is known for its quality products. The company has
processing plants in Orissa, Assam, Karnataka, Gujarat and Punjab.
It has a wide network of Distributors and Dealers, who stock FFDL
products and deal with all types of customers. The company
through this network reaches to over 50,000 retail points in the
urban and the rural markets.
Some of the products of FFDL are produced throughout the year and
are sold through this wide network. Some products are seasonal in
production but are sold throughout the year. And some products
are popular in certain seasons and not in demand at all in other
seasons.
 Contd…..
The business performance of the company is assured good, if FFDL
produces the products as per the varying demand pattern of the
customers. Since, the company has established its strength in the
distribution dealer network, the success comes through the
appropriate decisions in the purchase of fruits, vegetables and
dispatching them to the various locations where the distributors are
located.
It is the policy of the company to launch each year at least one new
product. This policy has paid rich dividends to the company in terms
of its image and the customers have always looked forward for such
an announcement from the company’s end. The FFDL uses, well in
advance, the different advertising media such as the newspaper,
hoardings, magazines, sample tests and demos, TV etc., for
announcing and promoting its new products from time to time.
 Contd…..
However, the selection of the media is based on the product range and
the targeted market segment. In spite of considerable strength in
many aspects of business, the company has failed in the launching
of new products. It was not able to meet the demand owing to the
inadequate purchases of raw materials, the wastage of raw
materials as the processing plant of the company was not available
due to its maintenance schedule or it was scheduled for some other
food processing operation. The company also faces the problems of
high seasonal inventory which, if not disposed of in time, becomes
a non-moving and sometimes a non-saleable inventory.
FFDL has its marketing division headed by a Manager- Marketing
supported by the Product Manager for a group of its products.
 Questions
• Identify the different decisions which the management
of the company is making during the course of the
business execution.
• Classify these decisions in terms of the type – certainty,
risk and uncertainty
• Which of these decisions will be taken by the top, the
middle and the operational management of FFDL?
• If you know about an organization’s strategy, could you
suggest IS apps that would support it? For example,
how could a large supermarket chain use Information
systems for cost reduction or for a strategy based on
differentiation
 Computer System Configurations
The basic elements of a system are input, processing and
output. Interfaces facilitate interactive environment to get
input into a system and present output in a variety of forms
such as reports. Processing involves: 1. execution of
business logic implemented through programming
languages and 2. management of required data: storage,
access and manipulation. The software that implements ISs
can be logically divided into 3 layers based on functionality:
interfaces(presentation services), core business logic and
data services

Interfaces  Business Logic  Data Services

 
 Information Systems Layers
Layer Functionality Components/Types
Interface Takes care of presentation Text-based data entry
services, facilitate input, interfaces, GUI- based
validation and output (Windows) interactive
forms, IVR, SMS, WAP and
web based forms,
unstructured
supplementary service
data(USSD), static and
interactive reports and
dashboards and
multimedia interfaces
Business Logic Execution of core Core modules, functions,
processing logic procedures, APIs(Libraries),
Web services, stored
Procedures etc
Data Services Defining data models, File handling and
creation, storage, access management, data stores,
 Contd…..
The components which implement functionality of these
layers can be coupled either tightly or loosely. Loose
coupling brings: 1. greater flexibility in developing and
deploying components separately in networked
environment in distributed fashion 2. flexibility in
interconnecting heterogeneous systems and platforms and
3. better scalability and maintenance of information
systems. The ISs which have all these layers managed by a
single computer program is called single-tier system, while
ISs that have separate programs/systems to implement
individual functionality are called two-tier (client-server) or
three-tier systems. In some systems, business logic may be
implemented using multiple programs/systems, are called
n-tier systems.
 Computing Architectures
• As single-tier app may be fine for personal apps. But what if there
are multiple people-say employees of company who have to access
–that is read and update-the same common data? A sales order
created by one employee must be available to others.
This is where you bring in multi-tier apps
• In client/server systems(server is referred as database server),
interfaces are taken care by client machines(usually desktops) and
data services by DBMS. Client machines interact with database
systems in a loosely coupled manner. The client machines send
requests to the database system; the database system respond to
that request and send required data. The business logic is split in 2
parts: client side and server side. Since the majority of business
logic is implemented at client side, the clients are typically fat
clients(machines requiring higher computing resources). C/S
systems can be further enhanced to have better ROI using thin
client(GUI- based) technologies
In a 2-tier architecture, the data is separated from the app and stored
on a different platform. Each user has a copy of the app on his own
machine, the client machines but the data is stored on the server.
All these machines are connected by a network and can “talk to” or
exchange data with each other.
• 3-tier architecture The app here is split into: 1. One part handles
only the UI- the screens, option menu-on the client machine 2. the
other part has the business logic-compute salary, generate invoice,
record ledger transaction- is stored at a central, common location.
This means any change to the app has to be done only once at the
central server and NOT at each location. This is the application
server. The app is partitioned – business logic kept centrally,
presentation logic kept locally, data transfer over network
minimized
• An example of a well designed 3-tier application is: An ERP product
– like SAP or Oracle -Business suite used in enterprises. There would
be a database server at the back, an application server- running the
ERP software – in the middle and there would be client machines,
with the ERP client software on every user desk.
Multi-tier architecture system- An additional machine, called the web
server is put between the application server and the user. The client
software, on the user machine is replaced by the web browser
which is not in a position to communicate with the application
server directly. It needs an intermediate server – a translation
service – to communicate.
So the web server converts the data traffic from the application server
to a format that is universally understood by anyone who has a web
browser.
 Web based n-tier Systems
• In web-based systems, functionalities of all the 3 layers are separated, run
on different machines/devices and are loosely coupled. They are deployed
under Internet, intranet and extranet environments. In such ISs, interface
functionality is taken care by client machines/devices, business logic by
web server(which stores and delivers web pages)and data services by
database servers. However, in some case part of business logic is moved at
DB server. Business logic can be split into multiple servers like web server
and application server(which takes care of specific functional
requirements such as CRM). The client can be desktop machine, thin client
machine, smart device supporting browser or any device that supports
Internet connectivity. The computational resource requirements at client
side depend upon functionality to be executed on that. Some clients
require more processing power(e.g., Rich Internet Applications) and
applications that need to install some components like ActiveX. However,
web-based information systems just need a browser to access them from
client machine.
 Implementation of various Layers
Single Client/Server Web-based n-tier
systems
Interface Developed using GUI forms, Web forms/pages.
core programming Interfaces are Interfaces are
language/tools tightly integrated to loosely integrated
client information and downloaded
from web server
Business Logic Through core Implemented using Implemented using
programming programming core programming
logic/supported by languages and and scripting
tool partially at server languages
side using DB
programming
Data Services Program which Managed by Managed by
implements the IS, database servers. database servers,
configures, Server side business data stores and
accesses and logic is XML files
manipulates data implemented using
 Cloud-based Systems
The Internet has evolved from a platform that delivered web contents
to the platform to perform a variety of computing services. Instead
of managing ISs and IT infrastructure on premise, organizations are
outsourcing them to third-party vendors – cloud vendors. Vendors
do not sell software, platforms or infrastructure as products and
solutions but as services. Client organizations do not need to buy
them but use and access on demand.
Cloud types – Public, Private, Hybrid, Community
Service Models- SaaS, PaaS, IaaS, XaaS
The client organizations can choose services based on their
requirements and pay as per use.
There is a great deal of flexibility in selecting subscription models
based on functional and technical requirements.
 Contd…..
Many client and software firms are opting for n-tier
computing architectures and there is a clear shift toward
building and using cloud infrastructures and services. The
IS/IT has moved from highly distributed systems to
centralized architectures (like core banking solutions)
deployed at data centers. Now such centrally deployed
systems are likely to move to cloud infrastructure. Such
shifts are helping client organizations to get rid of managing
IT systems, resources and infrastructure. This has also
changed roles and functionalities of IT/IS personnel. Such
paradigm shift is going to have some issues and challenges
such as security and privacy of confidential data,
dependence or lock-in on cloud providers, management
and enforcement of SLAs and cross-country legalities.
 Case: Air Deccan – Cost Optimization
The figure shows a typical simplified airline supply chain,
Suppliers Distribution Sales and Custome rs
Systems Service

Airline  ARS(Airline  Physical  Retail

Res. System) booking and
GDS(Global Direct or Corporate
Distribution through
System) TA
Online booking
Airline website or
through other TA’s website
Domestic Air Deccan Used various Understand the
Point-to- used its own channels to needs of the first
Point flights, Air Dist. System access large time custo mers:
Single class possible because customer base low price, is on e
Airline means it flew domestic lesser middle men, of the factors
Less complexity flights only e-tickets and barcodes to decide Airlines
to reduce cost and
bring efficiency
Like supply chains in other sectors, Airline supply chains
have also evolved along with the emergence of new
technologies, the Internet and e-Commerce, various
players and business models. However, the firm needs
to see how it can use the technologies and right
business model to gain strategic advantages. AD
attributed savings of almost 20% on their distribution
cost(including sales and service), improvement in sales
efficiency and increase in customer base to the cost-
effective state-of-the-art IT/IS implementations and
right strategies and models. However, some of these
savings it could realize because of the nature of the
business models and operations.
For example, its operations were limited to domestic market and
flights were point-to-point(no need to have complex flight routings
and interconnections). This reduced its dependence on global flight
reservation databases such as GDSs like Galileo, Amadeus, Sabre,
Abacus and world span. It decided to implement and manage with
its own airline distribution system, saving about 4% on operational
costs.
Single class flights make reservation systems relatively simple to
implement. Many firms are extensively encouraging their customers
to use electronic means of communication, as it is
flexible(anywhere and anytime), cheaper and faster. Web and email
communication has become a de-facto for many customers. This
impacts the supply chain especially on distribution side. Customers
can use online interfaces as well as email communication.
For example, credit cards, phone bills, bank statements etc can be
viewed and downloaded by logging onto respective online web
sites and are also sent by emails on periodic basis. Firms get rid of
middlemen, reduce operational costs and pass on some of the costs
to the customer, by using electronic means. Bar code systems
increase operational efficiency and accuracy. AD started with paper
tickets with bar codes which saved them Rs. 4/- per ticket and
resulted into faster turnaround time for the travelers at
airports(e.g., quick issue of boarding passes). Using e-ticketing , it
reduced dependence on middlemen(TA) who were important
players in travel supply chain and its web site offered direct
interface to the customers. This saved around 10% of overall
distribution cost. The web site included payment gateway, it stayed
away from the Geneva-based Billing and Settlement Plan(BSP) that
works on a 15-day credit cycle. This saved AD 3%.
Outsourcing – AD viewed outsourcing seriously and
positively. Instead of paying heavy upfront license fees
to the vendor, it opted out a payment schedule based
on the number of passengers booked every month.
Such engagements provide incentives to the vendor to
keep upgrading and making their infrastructure and
apps better. Vendors can really grow big as their clients
grow. However, client firms have to be careful while
choosing their outsourcing partner. AD looked at the
stability, scalability, reliability, processes in place for
support and problem resolution while selecting
vendors.
What are the major points to be noted in this case study?
• Opting for own reservation system
• Paper tickets with barcodes
• Own website and e-ticketing
• Selecting possible and widely accessible
channels like call centers to reach customers
• Outsourcing model
Case: Yes Bank- Collaborative CRM
CRM helps firms to attract, serve and retain the customers. In retail
businesses, there are multiple channels and customer touch points .
The customer has choice and can interact with the firm in his ways.
There can be many systems deployed in the firm to cater to
different functionalities and requirements. Having a common
unified and centralized view of the customer is important.
Otherwise, it can cause lost sales leads, multi-interfaces to the
same lead and re-assignment of the leads. Similarly, one bad
experience at one of the touch points or services can be enough for
the customer to churn out. Making use of or getting insights from
whatever interactions(incl. feedback, ideas, opinions, suggestions,
preferences and expectations) the customer does with the
organization is important and needs to be properly captured,
documented and shared.
Such interactions can b e well understood by the people and not by
automated systems that analyze contents. This is valuable
knowledge that people can acquire, value-add, share and re-use
using collaborative tools. Collaboration is the key and the customers
need to be very much part of the overall CRM systems and
strategies. It not only helps firms: a. in co-creation b. but also to
understand customer’s changing needs as their professional and
social profiles keep changing c. to conceptualize new products and
services d. to look forward to and realize business and cross-selling
opportunities. Along with operational and analytical CRM, firms are
increasingly looking for collaborative and social CRM.
Web 2.0 tools play a crucial role here – Internal customer blogs, social
profiles, subscribe to RSS feeds, integrate APIs, integrate customer
database from various touch points, social networking sites
There are advantages of using blog-like entry for every customer.
Individual blog can have details(profile) about the
customer(feedback, suggestions, products/services
bought/subscribed, interactions etc.) in chronological orders.
Employees can share their feedback, opinions, add keywords, tags
etc to the individual blogs based on interactions they have with the
customer. The product team can look at these blogs as source of
opportunities to understand issues with the products and services,
conceptualize new products and look for cross-selling
opportunities. New players in the industry have the advantage of
latest technologies and do not have to carry legacy systems. Yes
Bank is an example. Such firms can be flexible and agile to changing
business and opt for the technologies that enable them to do so or
make it happen.
Open source software can be one such options. Collaborative CRM and
use of open source software are the 2 unique points about Yes
Bank’s CRM implementation. It wanted customers to be part of the
overall CRM system and flexible system that can be modified based
on changing business model. It referred this system as YCCRM(Yes
Bank Collaborative CRM) and implemented it using JBOSS.
YCCRM helped : a. to improve customer service 60% and turnaround
time for its processes by almost 70% and b. to manage social value-
based relationships and substantial increase in the cross-selling.
Other advantages of centralized implementation included
prevention of loss of data, data could be extracted and analyzed to
understand the business better, customer segmentation based on
geographies and to take proactive action to improve the customer
experience and product.
 Tasks
1. NTPC is the largest thermal power generating company with annual
power generating capacity of 21000MW. NTPC has 23 power-generating
project units scattered all over the country and wishes to implement
web-based state-of-the-art packaged integrated Information systems to
fulfill the following objectives:
• To optimize asset, service and customer business processes across the
enterprise for the highest return on capital and human assets
• To improve productivity of its manpower, plant equipment, finances and
spare parts inventory
• To improve customer services while reducing service delivery costs
However, in order to achieve these business objectives, the proposed
integrated IS will include business process reengineering , cultural
change and organizational restructuring , such as creation of strategic
business units.
You are required to prepare a blueprint of the design of integrated IS
infrastructure as per the above requirements of the company.
 Tasks
2. IRCON Ltd. is a leading construction company with an annual turnover of Rs. 9000
million, with a corporate office in New Delhi, four regional offices and over 20
project sites including four overseas. Most of these sites are in remote locations
and keep shifting as the work progresses. Its major business functions include
project management, assets management, finance and accounts, contract
management, procurement and human resource management. The company
wishes to implement an integrated IS using packaged solutions such as an ERP. The
following objectives are expected to be achieved from the proposed system.
• To ensure the accuracy, completeness and consistency of business transactions
• To integrate the operations of the various business processes across the functions
• To ensure transparent decision-making based on information
• To establish world class business processes and best practices
You are required to design various architecture options for IS infrastructure for IRCON
keeping in view the characteristics of its project sites
 Tasks
3. Select any company and study its IS
infrastructure with respect to its effectiveness,
flexibility, openness, security and future
relevance due to advancement of technology.
The study has to be carried out using primary
as well as secondary data.
 Tasks
Visit any computerized bank or any other such
commercial establishment and prepare a report
covering the following aspects
• Information Technology infrastructure including
computer hardware, software, operating systems,
application software, networks etc
• Information system applications, such as payroll,
accounting, billing, invoicing, inventory management,
business intelligence reports etc. Also classify
information system applications in terms of Transaction
information system, Executive/Decision information
system
 Tasks
• The GCMMF(known by its brand AMUL) is the largest food
processing enterprise in the country with an annual turnover of Rs.
250 billion. The organization markets the branded milk and edible
oil products through its strong country-wide distribution network
with 1662 stockists and over 3,00,000 shopkeepers. It has 5 zonal
and 35 Depot offices to market the products of its member unions.
The production as well as demand has seasonal variations. Since its
inception, the organization’s corporate plan has been growth
oriented, consistent with the national policy of self-sufficiency in
milk and oilseeds production, improving the economy and social life
of the farming community in general, and strengthening the co-
operative system in particular. The organization has a vision to
become the largest milk enterprise in the world. So far it has been
operating in a monopolistic market but now it has to face
competition.
 Contd…..
Realizing the threat from competition well in advance, its
management has started taking steps. TQM is
implemented. It will have to pursue the breakthrough
improvement in overall performance of its core business
processes such as first lag dispatch, sales management and
new product development by applying BPR principles. The
organization is in the process of building enterprise-wide IT
infrastructure. The services of CSC, a leading consulting
firm have been hired for this to prepare a report on IT
strategy for the organization. Assuming some of you to be
members of the consulting firm, take up the assignment
and interact with its CEO to carry out strategic requirement
analysis of information systems. One of you should play the
role of the CEO and carry out the conversation for the same
 Contd…..
1. Consultant: What are the critical success factors for your
business?
CEO: Product innovation, distribution management, cost and
quality competitiveness
2. Consultant: What kind of information do you need to
support your business strategy?
CEO: I need to know how many refrigerators in every
household are occupied by AMUL products
1. You may carry out the conversation, document the
strategic requirements and accordingly suggest an
information systems strategy. Also elaborate how the new
systems would strengthen the strategic objectives of the
AMUL business
 Tasks
How might the following employees be affected
by a comprehensive MIS
• Sales Representative
• Sales Manager
• Plant Manager
• Staff Analyst for Finance Vice President
• President