MANAGEMENT INFORMATION SYSTEMS

& ENTERPRISE RESOURCE PLANNING

MBA II SEMESTER
Course objective: The aim of this course is to enable students to Course Outcome: After going through the subject and other
understand the importance of information systems in the decision references, by the end of this course the students will understand
making and management of organizations. the MIS concepts and its applications,
SYLLABUS

I. Introduction

II. Business Applications of Information Systems

III. Management of IS

IV. Building of Information Systems

V. Introduction to Cyber Crime

UNIT I - INTRODUCTION

• MIS importance

• Definition

• Nature and Scope of MIS,

• Structure of MIS

• Classification of MIS,

• Information and Systems Concept,

• Types of Information

• Information systems for competitive advantage.

 TEXT BOOKS

LAUDON & LAUDON, MANAGEMENT

INFORMATION SYSTEMS, PEARSON,2015
D P GOYAL, MANAGEMENT INFORMATION SYSTEMS–
MANAGERIAL PERSPECTIVE, MACMILLAN, 3RD EDITION,2010.
REFERENCE BOOKS

1. Nina Godbole & Sunit Belapure “CyberSecurity” Wiley India2012.

2. Jawadekar, MIS Text and Cases, TMH,2012.
3. A K Gupta, Sharma “Management of Systems” Macmillan,2012.
4. Kelkar, Management Information Systems, PHI,2012.
BASICS CONCEPTS

Data Information Knowledge

Raw facts and statistics collected together Data which is processed The information which is acquired
for reference or analysis.

System Information System Management

Information systems are interrelated
Information System
a set of things working together as parts A System consisting of people,
components working together to collect,
of a mechanism or an interconnecting machines, procedures, database and data
process, store, and disseminate information
network; a complex whole models as its elements
to support decision making, coordination,
control, analysis, and visualization in an
organization
INTRODUCTION

• The purpose of an information system

• Information systems are used for effective business decisions and achieving strategic

advantage

• Increasing role of information technology in an enterprise

• Increasing use and participation of IT in all processes and projects

NEED FOR MANAGEMENT INFORMATION SYSTEM

• Information systems and information technology have become a vital component of any successful
business

• Internet based information systems play an increasingly important role in organizations

• MIS has assumed more importance in today's global business environment because
• Liberalization and Globalization
• Doubling up data
• Proliferation and advances in Information Technology
 CAPABILITIES OF MIS

• Automating Business process

• Capturing data from different sources
• Performing high speed, high volume numerical computations and process data
quickly
• Providing fast, accurate information, communication and collaboration within and
among organizations
• Storing huge amounts of information in a small, easy to access space
• Enabling fast and inexpensive access to a large amount of information world wide
BENEFITS OF MIS

• Reduced Inventory
• Reduced carrying cost of inventory
• Reduced manpower
• Reduced cycle time
• Reduced data transfer time
• Reduced errors
• Reduced quality costs
• Improved information accuracy
• Improved decision making capability
MAIN AREAS OF MIS

Basic concepts Basic concepts

of Information of Information
System Technology

MIS

Planning of Development of
MIS MIS

Implementati Business Managing

on of MIS Applications Information
of MIS System
NATURE OF MIS

• MIS is utilised by every level of a management.

• It clarifies and focuses on the strategic goals and objectives for the management.
• MIS provides an effective system to analyse costs and revenues and further reviews effectively and
efficiently to bring a balanced in finances and costs.
• MIS is maintained either through manual systems or automated systems or a combination of both.
• It also plays a incremental role in identifying, locating, measuring, tackling and limiting risks.
• It lays down a framework of rules and regulations for the management to bring a clear and concise
communication between employees.
• MIS provides an objective system of collecting, assessing and aggregating information for a business.
SCOPE OF MIS

Operational
Computer Research
Science

MIS

Accounting Management
MIS CHARACTERISTICS

• System Approach
• Management Oriented
• Need Based
• Exception Based
• Future Oriented
• Integrated
• Common data flows
• Long term planning
• Sub System concept
• Central Database
MIS DEFINITION

• MIS is a system consisting of people, machines, procedures, database and data models as its elements
• It gathers the data from external and internal sources of an organization
• It processes the data which is collected and supplies the information to assist the managers in the
process of Decision Making.
• Example of MIS
• Payroll Information system
• Loan Processing information system
• Inventory information system
• CRM
 CONCEPT OF MIS

Decision Making
Data
Processing Choice
Intelligence Alternatives
Logic
Data
Computers
Information
human Decision
Implementation

DB
Performance
Computer
Network
Feedback
MIS ACTIVITIES

• Data Capturing

• Processing of data

• Storage of Information

• Dissemination of Information
 MIS ACTIVITIES

Source User

Source
Data Dissemination
Processing
Capture User

User
Source

Retrieval

Storage of
Information
COMPONENTS OF MIS

• People
• Hardware and Software
• Database, Data warehouse
• Model Base
• Computer Network
• Process
COMPONENTS OF MIS

Computer
Software/
Hardware People

MIS

Input and
Database Output

Operating
Procedures
STRUCTURE OF MIS

• Structure of MIS is a difficult Concept to understand

• Difference approaches may be used while describing an entity
• MIS Structure may be described by
• Physical components
• Information system processing function
• Decision Support
• Levels of Management activities
• Organizational functions
PHYSICAL COMPONENTS

• The structure of MIS can be understood by its physical components

• The physical components are

• Hardware
• Software
• Database
• Manual Procedures
• Operating Persons
INFORMATION SYSTEM PROCESSING FUNCTIONS

• The functions of the MIS explains what the system does

• The main processing functions of MIS are
• Transaction Processing
• To Maintain Master file
• To Produce Reports
• To Process Enquiries
• To Process Interactive Support Applications
DECISION SUPPORT

• Support in decision making

• Decisions vary with respect to the structure that can be provided for making them

• Highly structured decision can be pre planned

LEVEL OF MANAGEMENT ACTIVITY

• MIS Supports various Management activities in an organization

• On the basis of activities, MIS has classified the management hierarchy into three levels
• Strategic Planning Level
• Management Control Level
• Operational Level
ORGANIZATIONAL FUNCTIONS

• The structure of MIS can also be described in terms of Organizational functions

• Typical set of functions in manufacturing organization includes
• Production
• Sales and marketing
• Manufacturing
• Finance and accounting

• Each of this functions has unique information needs.

ORGANIZATIONAL FUNCTIONS
Organizational
Functions
Production

Finance

Personnel

MIS etc
Management
Activities

Strategic
Planning

Management
Control
Operational
Control

Transaction
Processing
TYPES OF MIS

• Information system is classified into the following categories

• Hierarchical Information System
• Functional Information System
• Enterprise Information System
• General Purpose Information System
 Management Information System

Hierarchical Functional Enterprise General Purpose

• Production
• TPS • Marketing • ERP • Business Expert
• MIS • Finance and • CRM • SIS
• DSS Accounting • SCM • KMS
• ESS • HR • BI • OSS
HIERARCHICAL
INFORMATION
SYSTEM
 TRANSACTION PROCESSING SYSTEM

• Records and process data, produce reports

• Automation of the fundamental

• These systems process either batch processing or real time processing

• Ex: POS

• Previously, TPS is known as MIS

• Transactions could be externally generated or internal to the organization

• Externally generated Transaction are from customers, suppliers and other groups

• Any internal event that is recorded by the information system is considered as transaction
 Data Processing Data

Input output
MANAGEMENT INFORMATION SYSTEM

• MIS is an information system which process data and gives information

• MIS uses TPS for its data input
• The information is generated by the information system is used for
• control of operations
• strategic and long range planning
• Short range planning
• Management control and other managerial problem solving

• The domain of MIS is Management Control level

• In contrast with TPS, MIS is more comprehensive
• Information system is developed to cater the information needs of a manager of each of the functional area
 Processin
Input
Data Data
g

TPS

Output
Data Processing Information
DECISION SUPPORT SYSTEM

• Assist in Decision Making

• Used in Planning, Analysing alternatives and trail and error search for solutions
• Interacted with terminal based dialogue with user
• Includes variety of decision models
• DSS tend to support managers at Management level and Strategic Level
• DSS Can be differentiated from MIS in terms of its processing capabilities
• Elements of DSS include
• Database
• Model Base
• User Interface
ELEMENTS OF DSS

• Database
• Combination of Masterfile and Data from external sources

• Model base
• Library of models to manipulate and analyse data
• It may include econometric models to forecast demand

• User interface
• User can communicate with DSS
• Terminal hooked up to computer
Database Model Base

User Interface

User
DECISION SUPPORT SYSTEM

Information from MIS c Decision

e
EXECUTIVE SUPPORT SYSTEM

• Extension of MIS and Special type of DSS

• Provides critical information from various sources

• Tailored for the use of the managers at the strategic level

• Designed to cater the needs of a senior executive

FUNCTIONAL
INFORMATION
SYSTEM
FUNCTIONAL INFORMATION SYSTEM

• Business activities are group around functions such as

• Production
• Marketing
• Finance
• Human Resource

• These departments are commonly known as Functional areas

• Each functional area has unique information needs
 Functional Information System

Production Marketing Finance HR

• Sales Order • Finance

• Production • Forecasting Planning
• Planning and • Sales Analysis • Employee
• Budgeting
Control • Billing • Recruitment
• Cost
• Engineering • Distribution • Selection
• Sales Quote Accounting
and standards • Development
Control • AR
• Quality • Evaluation
• Pricing • AP
Control • Product Control • Payroll
FINANCIAL INFORMATION SYSTEM

• It is a sub system of MIS

• It supports decision making process of financial functions
• Generally, basic financial decision include
• Where to invest and to what extent?
• Where to raise funds and what amount?
• How much to pay in dividends?

• Financial Decision that a financial manager has to take

• Capital Budget Decision
• Financing Decision
• Dividend Decision
• Current Asset Management
Transactional Sorted Data
Data
Processing Logic Forecast
Accounting rules
and Procedures
Management
Ratios
Financial
Intelligence Data Audit and
Decision Models Control
Organizational
Plans Other decision
and plan
MARKETING INFORMATION SYSTEM

• Social and Managerial process by which individuals and groups obtain what they need
and want through creating, offering and exchanging products of value with others –
Philip Kotler
• All the activities necessary to direct and facilitate the production and usage of goods and
services for a society
• Great significance in all societies
• The concept of marketing has also undergone a sea change
MODERN MARKETING

• Modern Marketing does not simply include activities like selling, advertising or
distribution

• Involves the interaction of several business activities

• Marketing of product is done before the product is produced

TRADITIONAL VS MODERN MARKETING

TRADITIONAL MARKETING MODERN MARKETING

• Focus on Production and Consider • Focus its attention on buyers/customers
marketing to be use in selling and • Customer Satisfaction
promotion
• selling products
 Focus Means End

Traditional Profits through

Selling & sales volume
Marketing Product Promotion

Modern Profits through

Integrated
Marketing Customer Marketing
Customer
Satisfaction
FUNCTIONS OF MARKETING PROCESS

• The marketing identification

• The purchase motivation function
• The product adjustment function
• The physical distribution function
• The communication function
• The transaction function
• Post transaction funciton
 Transactional Analysis
Data
IS Processing
Marketing Research
Planning
Data

Marketing
Implementation
Intelligence Data
Marketing DSS

Organizational
Plans Control
PRODUCTION OR MANUFACTURING INFORMATION
SYSTEM
PRODUCTION OR MANUFACTURING
INFORMATION SYSTEM
• Manufacturing is another important functional area of an organization

• Manufacturing is not an activity for every organization

• trading

• The main decisions to be taken in the manufacturing system are

• Product Design
• Plant location and Layout
• Production planning and Control
• Quality Control
Production data Product Design

Inventory data

Plant location
and Layout
Supplier Data

Processing
Production
Workforce data planning and
Control

Environment data
Quality
Control
Organizational
Plans
ENTERPRISE INFORMATION SYSTEM

• EIS is a kind of information system which improves the functions of enterprise business
processes by integration.
• ERP --- Enterprise Resource Planning
• CRM -- Customer Relationship Management
• SCM -- Supply Chain Management
• BI -- Business Intelligence
 GENERAL PURPOSE INFORMATION SYSTEMS

• Business Expert : Business Expert System is a knowledge

based information system, which is based on artificial
intelligence.
• A knowledge based information system adds a knowledge
base that uses its knowledge about a specific, complex
application area
Rules,
to act as an expert.
Facts Logic

Knowledge Base
Interface Engine

User Interface

Components_of_BES
• KMS --- Knowledge Management Systems
• KMS is a system for applying and using knowledge management principles to typically
enable employees and customers to create , share and find relevant information quickly.
• OSS -- Operational Support system
• OSS is set of programs that help a communications service provider monitor, control,
analyze and manage a telepehone or computer network.
INFORMATION
 INFORMATION DEFINITION

• Information is a necessary and vital input in any decision making process in an organization
• However, it is not available in ready form
• Thus, information in its unprocessed form is called data, which is generated as a by product of
transaction taking place in the organization
• information as data that has been processed into a form that is meaningful to the user and is of real
or perceived value in current or prospective actions or decision -- Davis and Olson

Data Processing Information

TYPES OF INFORMATION

• Strategic Information

• Tactical Information

• Operational Information
INFORMATION QUALITY

• Timeliness
• Accuracy
• Relevance
• Adequacy
• Completeness
• Explicitness
• Exception based
DIMENSIONS OF INFORMATION

• Economic Dimension
• Business Dimension
• Technical Dimension
ECONOMIC DIMENSION

• This dimension refers to the cost of the information and its benefits
• Generation of information costs money
• To decide about the money to be spent on information generation in an organization, a
cost-benefit analysis should be undertaken
• Measuring costs and benefits of information is difficult.
• There are few aspects of information may be useful
• Cost of information
• Value of Information
BUSINESS DIMENSION

• Different types of information are required by managers at different levels of

management hierarchy
• The information need of manager at strategic level are altogether different that those of
operational level
• It is because of the fact that managers at different levels are required to perform different
functions.
TECHNICAL DIMENSION

• It refers to technical aspects of the database

• Various aspects of the database which are considered under the dimension include
• the capacity of database,
• response time
• Security
• Validity
• Data interrelationship
SYSTEM
SYSTEM: A DEFINITION

• The word ‘system’ is used quite often in our daily life.

• The common feature which these entire systems shares is that they are collection of
elements integrated to achieve the required goals
• A set of elements, joined together to achieve a common objective
• Business organization can be considered as a system in which the parts are joined together for
a common goal
MULTIPLE MEANINGS

• Generalized terms
• In actual practice, this term finds its usage and meaning in many diverse ways.
• The word system means different things to different people in different situation
• Office supervisor in a Chairman's office is asked what is your system
• Production manager
• Computer centre

• A set of entities or elements interacting among themselves in a certain manner to process

certain inputs to produce certain outputs
Input Process output

Model of a system

Input output
Input Process output
Input output
Input output

System with multiple inputs and outputs

KINDS OF SYSTEM

• Abstract and physical

• Deterministic and probabilistic
• Open and closed systems
• User-machine systems
SYSTEM RELATED CONCEPTS

• Boundary
• Interface
• Blackbox
BOUNDARY

• In order to focus on a particular system user need to define or describe the system under
study
• This is done with the help of a boundary
• The boundary of the system may exists either physically or conceptually
• The system is inside the boundary while its environment is outside the boundary
 System

Environment

Boundary

Input to the system

Out put from the system

Boundary
INTERFACE

• Each system can have sub systems which in turn are made up of units
• The interconnections and interactions among the subsystem are called interfaces

Sub System Sub System

 BLACK BOX

• The transformation process in certain sub systems, especially at the lowest level may not
be define.
• However inputs and outputs are known
• Such sub systems whose processes are not defined is called a black box system

Defined Input Defined output

Process (transformation) not defined

INFORMATION SYSTEMS FOR COMPETITIVE
ADVANTAGE
• Today, Organizations use their strategic information systems for gaining competitive
advantage.
• An SIS can offer competitive advantage to an organization in the following ways.
• i. Creating barriers to competitors entry
• ii. Generating databases to improve marketing
• iii. Locking in customers and suppliers
• iv. Lowering the costs of the products.
• v. Leveraging technology in the value chain.
I. CREATING BARRIERS TO COMPETITORS
ENTRY
• An organization uses information systems to provide products or services that are
difficult to duplicate or that are used to serve highly specialized markets.
• This prevents the entry of competitors as they find the cost for adopting a similar strategy
very high.
• The organization gets a competitive advantages as with different products and services,
they no longer have to complete on the basis of cost.
II. GENERATING DATABASES TO IMPROVE MARKETING

• An information system also provides companies an edge over their competition by

generating databases to improve their sales and marketing strategies.
• Such systems treat existing information as a resource.
III. LOCKING IN CUSTOMERS AND SUPPLIERS

• Another way of gaining competitive advantage by using strategic information systems is

by ‘locking in’ customers and suppliers.
• In this concept, information systems are used to provide such advantages to a customer or
a supplier, that it becomes very difficult for them to switch-over to a competitor.
IV. LOWERING THE COSTS OF THE PRODUCTS.

• Strategic information's may also help organizations lower their internal costs, allowing
them to deliver products, and services at a lower price than their competitors can provide.
• Thus, such information systems can contribute to the survival and growth of the
organization.
V. LEVERAGING TECHNOLOGY IN THE VALUE CHAIN.

• This approach, popularly known as Porter’s value chain model, pinpoints specific
activities in the business where competitive strategies can be applied, and where
information systems are likely to have a greater strategic impact.
• This model advocates that information technology can best be used to gain competitive
advantage by identifying specific, critical leverage points.