About the Tutorial. Audience. Prerequisites. Copyright & Disclaimer. Management Information System

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2 Abut the Tutrial Management Infrmatin System (MIS) is a planned system f cllecting, string, and disseminating data in the frm f infrmatin needed t carry ut the functins f management. This tutrial cvers the cncepts related t infrmatin and prvides a detailed cverage n MIS and ther majr enterprise-level systems. Yu will als learn hw these systems help in the decisin-making prcess, which is critical t any business enterprise. Audience This tutrial has been prepared fr the beginners as well as advanced learners wh want t learn the basics f Management Infrmatin System. This tutrial is very useful fr the undergraduate students f cmputer science, engineering, business administratin, management, science, cmmerce and arts where an intrductry curse n Management Infrmatin System is a part f the curriculum. Prerequisites Knwledge f cmputers is nt a prerequisite t fllw the cntents f this tutrial. This tutrial des nt require a backgrund in cmputers r cmputer prgramming, thugh a basic knwledge f cmputer terminlgies will help in understanding the given cncepts very easily. Cpyright & Disclaimer Cpyright 2014 by Tutrials Pint (I) Pvt. Ltd. All the cntent and graphics published in this e-bk are the prperty f Tutrials Pint (I) Pvt. Ltd. The user f this e-bk is prhibited t reuse, retain, cpy, distribute r republish any cntents r a part f cntents f this e-bk in any manner withut written cnsent f the publisher. We strive t update the cntents f ur website and tutrials as timely and as precisely as pssible, hwever, the cntents may cntain inaccuracies r errrs. Tutrials Pint (I) Pvt. Ltd. prvides n guarantee regarding the accuracy, timeliness r cmpleteness f ur website r its cntents including this tutrial. If yu discver any errrs n ur website r in this tutrial, please ntify us at cntact@tutrialspint.cm i

3 Table f Cntents Abut the Tutrial i Audience i Prerequisites i Cpyright & Disclaimer i Table f Cntents ii 1. MIS BASIC INFORMATION CONCEPTS 1 Infrmatin Definitin 1 Infrmatin Vs Data 1 Infrmatin, Knwledge, and Business Intelligence 2 Infrmatin/Data Cllectin Techniques 2 2. MIS CLASSIFICATION OF INFORMATION 3 Classificatin by Characteristic 3 Classificatin by Applicatin 4 3. MIS QUALITY OF INFORMATION 5 4. MIS INFORMATION NEED AND OBJECTIVE 6 Implicatins f Infrmatin in Business 6 MIS Need fr Infrmatin Systems 8 5. MIS MAJOR ENTERPRISE APPLICATIONS 9 Services Prvided by Enterprise Applicatins 9 Mst Cmmnly Used Enterprise Applicatins 9 6. MIS INTRODUCTION 11 Definitin 11 Objectives f MIS 11 ii

4 Characteristics f MIS 12 Characteristics f Cmputerized MIS 13 Nature and Scpe f MIS MIS ENTERPRISE RESOURCE PLANNING 14 Why ERP? 14 Features f ERP 15 Scpe f ERP 15 Advantages f ERP 15 Disadvantage f ERP MIS CUSTOMER RELATIONSHIP MANAGEMENT 17 Why CRM? 17 Scpe f CRM 18 Advantages f CRM 18 Disadvantages f CRM MIS DECISION SUPPORT SYSTEM 19 Prgrammed and Nn-prgrammed Decisins 19 Attributes f a DSS 19 Characteristics f a DSS 20 Benefits f DSS 20 Cmpnents f a DSS 20 Classificatin f DSS 21 Types f DSS MIS KNOWLEDGE MANAGEMENT SYSTEM 22 What is Knwledge? 22 Surces f Knwledge f an Organizatin 22 iii

5 Definitin f KMS 22 Purpse f KMS 22 Activities in Knwledge Management 23 Level f Knwledge Management MIS CONTENT MANAGEMENT SYSTEM 25 Functins f Cntent Management 25 Cntent Management Wrkflw 25 Advantages f CMS MIS EXECUTIVE SUPPORT SYSTEM 27 Examples f Intelligent Infrmatin 27 Features f Executive Infrmatin System 28 Advantages f ESS 28 Disadvantage f ESS MIS BUSINESS INTELLIGENCE SYSTEM 30 Characteristics f BIS 30 Benefits f BIS 30 Appraches f BIS 30 Capabilities f BIS MIS ENTERPRISE APPLICATION INTEGRATION 32 Characteristics f EAI 32 Need fr Enterprise-wise Integratin 32 Challenges f EAI 33 Types f EAI MIS BUSINESS CONTINUITY PLANNING 34 Objectives f BCP 34 iv

6 Phases f BCP 34 Prject Management and Initiatin 35 Business Impact Analysis 35 Recvery Phase 36 BCP Develpment Phase 36 Final Phase MIS SUPPLY CHAIN MANAGEMENT 37 Objectives f SCM 37 Features f SCM 38 Scpe f SCM 38 SCM Prcesses 39 Advantages f SCM MIS STRATEGIC BUSINESS OBJECTIVES 41 Operatinal Excellence 41 New Prducts, Services, and Business Mdels 42 Custmer and Supplier Intimacy 42 Imprved Decisin Making 42 Cmpetitive Advantage and Survival MIS SYSTEM DEVELOPMENT LIFE CYCLE 44 Planning and Requirement Analysis 44 Defining Requirements 45 Designing System Architecture 45 Building r Develping the System 45 Testing the System 46 Deplyment f the System 46 System Evaluatin and Maintenance 46 v

7 19. MIS DEVELOPMENT PROCESS 47 Planning fr MIS 47 Infrmatin System Requirements 49 Infrmatin System Analysis and Design 50 Technlgy fr Infrmatin Systems 50 System Test Planning and Executin 50 System Operatin 51 Factrs fr Success and Failure MIS MANAGERIAL DECISION-MAKING 53 Cncept f Decisin-Making 53 Decisin-Making Prcess 53 Prcess and Mdeling in Decisin-Making 56 Dynamic Decisin-Making 56 Sensitivity Analysis 56 Static and Dynamic Mdels 57 Simulatin Techniques 57 Operatins Research Techniques 58 Heuristic Prgramming 58 Grup Decisin-Making MIS SECURITY AND ETHICAL ISSUES 59 Security f an Infrmatin System 59 Infrmatin Systems and Ethics 59 The ACM Cde f Ethics and Prfessinal Cnduct 60 The IEEE Cde f Ethics and Prfessinal Cnduct MIS SUMMARY 61 vi

8 1. MIS Basic Infrmatin Cncepts Infrmatin can be defined as meaningfully interpreted data. If we give yu a number , it des nt make any sense n its wn. It is just a raw data. Hwever if we say Tel: , it starts making sense. It becmes a telephne number. If I gather sme mre data and recrd it meaningfully like: Address: 350 Fifth Avenue, 34th flr New Yrk, NY USA Tel: Fax: It becmes a very useful infrmatin - the address f New Yrk ffice f Human Rights Watch, a nn-prfit, nn-gvernmental human rights rganizatin. S, frm a system analyst's pint f view, infrmatin is a sequence f symbls that can be cnstrued t a useful message. An Infrmatin System is a system that gathers data and disseminates infrmatin with the sle purpse f prviding infrmatin t its users. The main bject f an infrmatin system is t prvide infrmatin t its users. Infrmatin systems vary accrding t the type f users wh use the system. A Management Infrmatin System is an infrmatin system that evaluates, analyzes, and prcesses an rganizatin's data t prduce meaningful and useful infrmatin based n which the management can take right decisins t ensure future grwth f the rganizatin. Infrmatin Definitin Accrding t Wikipedia: "Infrmatin can be recrded as signs, r transmitted as signals. Infrmatin is any kind f event that affects the state f a dynamic system that can interpret the infrmatin. Cnceptually, infrmatin is the message (utterance r expressin) being cnveyed. Therefre, in a general sense, infrmatin is "Knwledge cmmunicated r received, cncerning a particular fact r circumstance". Infrmatin cannt be predicted and reslves uncertainty." Infrmatin Vs Data Data can be described as unprcessed facts and figures. Plain cllected data as raw facts cannt help in decisin-making. Hwever, data is the raw material that is rganized, structured, and interpreted t create useful infrmatin systems. Data is defined as 'grups f nn-randm symbls in the frm f text, images, vice representing quantities, actin and bjects'. 1

9 Infrmatin is interpreted data; created frm rganized, structured, and prcessed data in a particular cntext. Accrding t Davis and Olsn: "Infrmatin is a data that has been prcessed int a frm that is meaningful t recipient and is f real r perceived value in the current r the prspective actin r decisin f recipient." Infrmatin, Knwledge, and Business Intelligence Prfessr Ray R. Larsn f the Schl f Infrmatin at the University f Califrnia, Berkeley, prvides an Infrmatin Hierarchy, which is: Data - The raw material f infrmatin. Infrmatin - Data rganized and presented by smene. Knwledge - Infrmatin read, heard, r seen, and understd. Wisdm - Distilled and integrated knwledge and understanding. Sctt Andrews' explains Infrmatin Cntinuum as fllws: Data - A Fact r a piece f infrmatin, r a series theref. Infrmatin - Knwledge discerned frm data. Business Intelligence - Infrmatin Management pertaining t an rganizatin's plicy r decisin-making, particularly when tied t strategic r peratinal bjectives. Infrmatin/Data Cllectin Techniques The mst ppular data cllectin techniques include: Surveys: A questinnaire is prepared t cllect the data frm the field. Secndary data surces r archival data: Data is cllected thrugh ld recrds, magazines, cmpany website, etc. Objective measures r tests: An experimental test is cnducted n the subject and the data is cllected. Interviews: Data is cllected by the system analyst by fllwing a rigid prcedure and cllecting the answers t a set f pre-cnceived questins thrugh persnal interviews. 2

10 2. MIS Classificatin f Infrmatin Infrmatin can be classified in a number f ways and in this chapter, yu will learn tw f the mst imprtant ways t classify infrmatin. Classificatin by Characteristic Based n Anthny's classificatin f Management, infrmatin used in business fr decisin-making is generally categrized int three types: Strategic Infrmatin: Strategic infrmatin is cncerned with lng term plicy decisins that defines the bjectives f a business and checks hw well these bjectives are met. Fr example, acquiring a new plant, a new prduct, diversificatin f business etc., cmes under strategic infrmatin. Tactical Infrmatin: Tactical infrmatin is cncerned with the infrmatin needed fr exercising cntrl ver business resurces, like budgeting, quality cntrl, service level, inventry level, prductivity level etc. Operatinal Infrmatin: Operatinal infrmatin is cncerned with plant/business level infrmatin and is used t ensure prper cnductin f specific peratinal tasks as planned/intended. Varius peratr specific, machine specific and shift specific jbs fr quality cntrl checks cmes under this categry. 3

11 Classificatin by Applicatin In terms f applicatins, infrmatin can be categrized as: Planning Infrmatin: These are the infrmatin needed fr establishing standard nrms and specificatins in an rganizatin. This infrmatin is used in strategic, tactical, and peratin planning f any activity. Examples f such infrmatin are time standards, design standards. Cntrl Infrmatin: This infrmatin is needed fr establishing cntrl ver all business activities thrugh feedback mechanism. This infrmatin is used fr cntrlling attainment, nature and utilizatin f imprtant prcesses in a system. When such infrmatin reflects a deviatin frm the established standards, the system shuld induce a decisin r an actin leading t cntrl. Knwledge Infrmatin: Knwledge is defined as "infrmatin abut infrmatin". Knwledge infrmatin is acquired thrugh experience and learning, and cllected frm archival data and research studies. Organizatinal Infrmatin: Organizatinal infrmatin deals with an rganizatin's envirnment, culture in the light f its bjectives. Karl Weick's Organizatinal Infrmatin Thery emphasizes that an rganizatin reduces its equivcality r uncertainty by cllecting, managing and using these infrmatin prudently. This infrmatin is used by everybdy in the rganizatin; examples f such infrmatin are emplyee and payrll infrmatin. Functinal/Operatinal Infrmatin: This is peratin specific infrmatin. Fr example, daily schedules in a manufacturing plant that refers t the detailed assignment f jbs t machines r machines t peratrs. In a service riented business, it wuld be the duty rster f varius persnnel. This infrmatin is mstly internal t the rganizatin. Database Infrmatin: Database infrmatin cnstrues large quantities f infrmatin that has multiple usage and applicatin. Such infrmatin is stred, retrieved and managed t create databases. Fr example, material specificatin r supplier infrmatin is stred fr multiple users. 4

12 3. MIS Quality f Infrmatin Infrmatin is a vital resurce fr the success f any rganizatin. Future f an rganizatin lies in using and disseminating infrmatin wisely. Gd quality infrmatin placed in right cntext in right time tells us abut pprtunities and prblems well in advance. Gd quality infrmatin: Quality is a value that wuld vary accrding t the users and uses f the infrmatin. Accrding t Wang and Strng, fllwing are the dimensins r elements f Infrmatin Quality: Intrinsic: Accuracy, Objectivity, Believability, Reputatin Cntextual: Relevancy, Value-Added, Timeliness, Cmpleteness, Amunt f infrmatin Representatinal: Interpretability, Frmat, Cherence, Cmpatibility Accessibility: Accessibility, Access security Varius authrs prpse varius lists f metrics fr assessing the quality f infrmatin. Let us generate a list f the mst essential characteristic features fr infrmatin quality: Reliability - It shuld be verifiable and dependable. Timely - It must be current and it must reach the users well in time, s that imprtant decisins can be made in time. Relevant - It shuld be current and valid infrmatin and it shuld reduce uncertainties. Accurate - It shuld be free f errrs and mistakes, true, and nt deceptive. Sufficient - It shuld be adequate in quantity, s that decisins can be made n its basis. Unambiguus - It shuld be expressed in clear terms. In ther wrds, in shuld be cmprehensive. Cmplete - It shuld meet all the needs in the current cntext. Unbiased - It shuld be impartial, free frm any bias. In ther wrds, it shuld have integrity. Explicit - It shuld nt need any further explanatin. Cmparable - It shuld be f unifrm cllectin, analysis, cntent, and frmat. Reprducible - It culd be used by dcumented methds n the same data set t achieve a cnsistent result. 5

13 4. MIS Infrmatin Need and Objective Infrmatin prcessing beynd dubt is the dminant industry f the present century. Fllwing factrs states few cmmn factrs that reflect n the needs and bjectives f the infrmatin prcessing: Increasing impact f infrmatin prcessing fr rganizatinal decisin making. Dependency f services sectr including banking, financial rganizatin, health care, entertainment, turism and travel, educatin and numerus thers n infrmatin. Changing emplyment scene wrld ver, shifting base frm manual agricultural t machine-based manufacturing and ther industry related jbs. Infrmatin revlutin and the verall develpment scenari. Grwth f IT industry and its strategic imprtance. Strng grwth f infrmatin services fuelled by increasing cmpetitin and reduced prduct life cycle. Need fr sustainable develpment and quality life. Imprvement in cmmunicatin and transprtatin brught in by use f infrmatin prcessing. Use f infrmatin prcessing in reductin f energy cnsumptin, reductin in pllutin and a better eclgical balance in future. Use f infrmatin prcessing in land recrd managements, legal delivery system, educatinal institutins, natural resurce planning, custmer relatin management and s n. In a nutshell: Infrmatin is needed t survive in the mdern cmpetitive wrld. Infrmatin is needed t create strng infrmatin systems and keep these systems up t date. Implicatins f Infrmatin in Business Infrmatin prcessing has transfrmed ur sciety in numerus ways. Frm a business perspective, there has been a huge shift twards increasingly autmated business prcesses and cmmunicatin. Access t infrmatin and capability f infrmatin prcessing has helped in achieving greater efficiency in accunting and ther business prcesses. A cmplete business infrmatin system accmplishes the fllwing functinalities: Cllectin and strage f data. Transfrm these data int business infrmatin useful fr decisin making. Prvide cntrls t safeguard data. 6

14 Autmate and streamline reprting. The fllwing list summarizes the five main uses f infrmatin by businesses and ther rganizatins: Planning - At the planning stage, infrmatin is the mst imprtant ingredient in decisin making. Infrmatin at planning stage includes that f business resurces, assets, liabilities, plants and machineries, prperties, suppliers, custmers, cmpetitrs, market and market dynamics, fiscal plicy changes f the Gvernment, emerging technlgies, etc. Recrding - Business prcessing these days invlves recrding infrmatin abut each transactin r event. This infrmatin is cllected, stred, and updated regularly at the peratinal level. Cntrlling - A business need t set up an infrmatin filter, s that nly filtered data is presented t the middle and tp management. This ensures efficiency at the peratinal level and effectiveness at the tactical and strategic level. Measuring - A business measures its perfrmance metrics by cllecting and analyzing sales data, cst f manufacturing, and prfit earned. Decisin-making - MIS is primarily cncerned with managerial decisin-making, thery f rganizatinal behavir, and underlying human behavir in rganizatinal cntext. Decisin-making infrmatin includes the sci-ecnmic impact f cmpetitin, glbalizatin, demcratizatin, and the effects f all these factrs n an rganizatinal structure. In shrt, this multi-dimensinal infrmatin evlves frm the fllwing lgical fundatins: Operatins research and management science Thery f rganizatinal behavir Cmputer science: Data and file structure Data thery design and implementatin Cmputer netwrking Expert systems and artificial intelligence Infrmatin thery Fllwing factrs arising as an utcme f infrmatin prcessing help speed up f business events and achieve greater efficiency: Directly and immediate linkage t the system Faster cmmunicatin f an rder Electrnic transfer f funds fr faster payment Electrnically slicited pricing (helps in determining the best price) 7

15 MIS Need fr Infrmatin Systems Managers make decisins. Decisin-making generally takes a fur-fld path: Understanding the need fr decisin r the pprtunity, Preparing alternative curse f actins, Evaluating all alternative curse f actins, Deciding the right path fr implementatin. MIS is an infrmatin system that prvides infrmatin in the frm f standardized reprts and displays fr the managers. MIS is a brad class f infrmatin systems designed t prvide infrmatin needed fr effective decisin making. Data and infrmatin created frm an accunting infrmatin system and the reprts generated theren are used t prvide accurate, timely and relevant infrmatin needed fr effective decisin making by managers. Management infrmatin systems prvide infrmatin t supprt management decisin making, with the fllwing gals: Pre-specified and preplanned reprting t managers. Interactive and ad-hc supprt fr decisin making. Critical infrmatin fr tp management. MIS is f vital imprtance t any rganizatin, because: It emphasizes n the management decisin making, nt nly prcessing f data generated by business peratins. It emphasizes n the systems framewrk that shuld be used fr rganizing infrmatin systems applicatins. 8

16 5. MIS Majr Enterprise Applicatins Enterprise applicatins are specifically designed fr the sle purpse f prmting the needs and bjectives f the rganizatins. Enterprise applicatins prvide business-riented tls supprting electrnic cmmerce, enterprise cmmunicatin and cllabratin, and web-enabled business prcesses bth within a netwrked enterprise and with its custmers and business partners. Services Prvided by Enterprise Applicatins Sme f the services prvided by an enterprise applicatin includes: Online shpping, billing and payment prcessing Interactive prduct catalgue Cntent management Custmer relatinship management Manufacturing and ther business prcesses integratin IT services management Enterprise resurce management Human resurce management Business intelligence management Business cllabratin and security Frm autmatin Basically these applicatins intend t mdel the business prcesses, i.e., hw the entire rganizatin wrks. These tls wrk by displaying, manipulating and string large amunts f data and autmating the business prcesses with these data. Mst Cmmnly Used Enterprise Applicatins Multitude f applicatins cmes under the definitin f Enterprise Applicatins. In this sectin, let us briefly cver the fllwing applicatins: Management infrmatin system (MIS) Enterprise Resurce Planning (ERP) Custmer Relatinship Management (CRM) Decisin Supprt System (DSS) Knwledge Management Systems (KMS Cntent Management System (CMS) Executive Supprt System (ESS) 9

17 Business Intelligence System (BIS) Enterprise Applicatin Integratin (EAI) Business Cntinuity Planning (BCP) Supply Chain Management (SCM) 10

18 6. MIS Intrductin Management Infrmatin System T the managers, Management Infrmatin System is an implementatin f the rganizatinal systems and prcedures. T a prgrammer it is nthing but file structures and file prcessing. Hwever, it invlves much mre cmplexity. The three cmpnents f MIS prvide a mre cmplete and fcused definitin, where System suggests integratin and hlistic view, Infrmatin stands fr prcessed data, and Management is the ultimate user, the decisin makers. Management infrmatin system can thus be analyzed as fllws: Management Management cvers the planning, cntrl, and administratin f the peratins f a cncern. The tp management handles planning; the middle management cncentrates n cntrlling; and the lwer management is cncerned with actual administratin. Infrmatin Infrmatin, in MIS, means the prcessed data that helps the management in planning, cntrlling and peratins. Data means all the facts arising ut f the peratins f the cncern. Data is prcessed i.e. recrded, summarized, cmpared and finally presented t the management in the frm f MIS reprt. System Data is prcessed int infrmatin with the help f a system. A system is made up f inputs, prcessing, utput and feedback r cntrl. Thus MIS means a system fr prcessing data in rder t give prper infrmatin t the management fr perfrming its functins. Definitin Management Infrmatin System r 'MIS' is a planned system f cllecting, string, and disseminating data in the frm f infrmatin needed t carry ut the functins f management. Objectives f MIS The gals f an MIS are t implement the rganizatinal structure and dynamics f the enterprise fr the purpse f managing the rganizatin in a better way and capturing the ptential f the infrmatin system fr cmpetitive advantage. Fllwing are the basic bjectives f an MIS: Capturing Data: Capturing cntextual data, r peratinal infrmatin that will cntribute in decisin making frm varius internal and external surces f rganizatin. 11

19 Prcessing Data: The captured data is prcessed int infrmatin needed fr planning, rganizing, crdinating, directing and cntrlling functinalities at strategic, tactical and peratinal level. Prcessing data means: making calculatins with the data srting data classifying data and summarizing data Infrmatin Strage: Infrmatin r prcessed data need t be stred fr future use. Infrmatin Retrieval: The system shuld be able t retrieve this infrmatin frm the strage as and when required by varius users. Infrmatin Prpagatin: Infrmatin r the finished prduct f the MIS shuld be circulated t its users peridically using the rganizatinal netwrk. Characteristics f MIS Fllwing are the characteristics f an MIS: It shuld be based n a lng-term planning. It shuld prvide a hlistic view f the dynamics and the structure f the rganizatin. It shuld wrk as a cmplete and cmprehensive system cvering all intercnnecting sub-systems within the rganizatin. It shuld be planned in a tp-dwn way, as the decisin makers r the management shuld actively take part and prvide clear directin at the develpment stage f the MIS. It shuld be based n need f strategic, peratinal and tactical infrmatin f managers f an rganizatin. It shuld als take care f exceptinal situatins by reprting such situatins. It shuld be able t make frecasts and estimates, and generate advanced infrmatin, thus prviding a cmpetitive advantage. Decisin makers can take actins n the basis f such predictins. It shuld create linkage between all sub-systems within the rganizatin, s that the decisin makers can take the right decisin based n an integrated view. It shuld allw easy flw f infrmatin thrugh varius sub-systems, thus aviding redundancy and duplicity f data. It shuld simplify the peratins with as much practicability as pssible. Althugh the MIS is an integrated, cmplete system, it shuld be made in such a flexible way that it culd be easily split int smaller sub-systems as and when required. A central database is the backbne f a well-built MIS. 12

20 Characteristics f Cmputerized MIS Fllwing are the characteristics f a well-designed cmputerized MIS: It shuld be able t prcess data accurately and with high speed, using varius techniques like peratins research, simulatin, heuristics, etc. It shuld be able t cllect, rganize, manipulate, and update large amunt f raw data f bth related and unrelated nature, cming frm varius internal and external surces at different perids f time. It shuld prvide real time infrmatin n nging events withut any delay. It shuld supprt varius utput frmats and fllw latest rules and regulatins in practice. It shuld prvide rganized and relevant infrmatin fr all levels f management: strategic, peratinal, and tactical. It shuld aim at extreme flexibility in data strage and retrieval. Nature and Scpe f MIS The fllwing diagram shws the nature and scpe f MIS: 13

21 7. MIS Enterprise Resurce Planning ERP is an integrated, real-time, crss-functinal enterprise applicatin, an enterprisewide transactin framewrk that supprts all the internal business prcesses f a cmpany. It supprts all cre business prcesses such as sales rder prcessing, inventry management and cntrl, prductin and distributin planning, and finance. Why ERP? ERP is very helpful in the fllwing areas: Business integratin and autmated data update Linkage between all cre business prcesses and easy flw f integratin Flexibility in business peratins and mre agility t the cmpany Better analysis and planning capabilities Critical decisin-making Cmpetitive advantage Use f latest technlgies 14

22 Features f ERP The fllwing diagram illustrates the features f ERP: Scpe f ERP Finance: Financial accunting, Managerial accunting, treasury management, asset management, budget cntrl, csting, and enterprise cntrl. Lgistics: Prductin planning, material management, plant maintenance, prject management, events management, etc. Human resurce: Persnnel management, training and develpment, etc. Supply Chain: Inventry cntrl, purchase and rder cntrl, supplier scheduling, planning, etc. Wrk flw: Integrate the entire rganizatin with the flexible assignment f tasks and respnsibility t lcatins, psitin, jbs, etc. Advantages f ERP Reductin f lead time Reductin f cycle time Better custmer satisfactin Increased flexibility, quality, and efficiency Imprved infrmatin accuracy and decisin making capability 15

23 Onetime shipment Imprved resurce utilizatin Imprve supplier perfrmance Reduced quality csts Quick decisin-making Frecasting and ptimizatin Better transparency Disadvantage f ERP Expense and time in implementatin Difficulty in integratin with ther system Risk f implementatin failure Difficulty in implementatin change Risk in using ne vendr 16

24 8. MIS Custmer Relatinship Management CRM is an enterprise applicatin mdule that manages a cmpany's interactins with current and future custmers by rganizing and crdinating, sales and marketing, and prviding better custmer services alng with technical supprt. Atul Parvatiyar and Jagdish N. Sheth prvide an excellent definitin fr custmer relatinship management in their wrk titled - 'Custmer Relatinship Management: Emerging Practice, Prcess, and Discipline': Custmer Relatinship Management is a cmprehensive strategy and prcess f acquiring, retaining, and partnering with selective custmers t create superir value fr the cmpany and the custmer. It invlves the integratin f marketing, sales, custmer service, and the supply-chain functins f the rganizatin t achieve greater efficiencies and effectiveness in delivering custmer value. Why CRM? T keep track f all present and future custmers. T identify and target the best custmers. T let the custmers knw abut the existing as well as the new prducts and services. T prvide real-time and persnalized services based n the needs and habits f the existing custmers. T prvide superir service and cnsistent custmer experience. T implement a feedback system. 17

25 Scpe f CRM Advantages f CRM Prvides better custmer service and increases custmer revenues. Discvers new custmers. Crss-sells and up-sells prducts mre effectively. Helps sales staff t clse deals faster. Makes call centers mre efficient. Simplifies marketing and sales prcesses. Disadvantages f CRM Smetimes recrd lss is a majr prblem. Overhead csts. Giving training t emplyees is an issue in small rganizatins. 18

26 9. MIS Decisin Supprt System Decisin supprt systems (DSS) are interactive sftware-based systems intended t help managers in decisin-making by accessing large vlumes f infrmatin generated frm varius related infrmatin systems invlved in rganizatinal business prcesses such as ffice autmatin system, transactin prcessing system, etc. DSS uses the summary infrmatin, exceptins, patterns, and trends using the analytical mdels. A decisin supprt system helps in decisin-making but des nt necessarily give a decisin itself. The decisin makers cmpile useful infrmatin frm raw data, dcuments, persnal knwledge, and/r business mdels t identify and slve prblems and make decisins. Prgrammed and Nn-prgrammed Decisins There are tw types f decisins - prgrammed and nn-prgrammed decisins. Prgrammed decisins are basically autmated prcesses, general rutine wrk, where: These decisins have been taken several times. These decisins fllw sme guidelines r rules. Fr example, selecting a rerder level fr inventries, is a prgrammed decisin. Nn-prgrammed decisins ccur in unusual and nn-addressed situatins, s: It wuld be a new decisin. There will nt be any rules t fllw. These decisins are made based n the available infrmatin. These decisins are based n the manger's discretin, instinct, perceptin and judgment. Fr example, investing in a new technlgy is a nn-prgrammed decisin. Decisin supprt systems generally invlve nn-prgrammed decisins. Therefre, there will be n exact reprt, cntent, r frmat fr these systems. Reprts are generated n the fly. Attributes f a DSS Adaptability and flexibility High level f Interactivity Ease f use Efficiency and effectiveness Cmplete cntrl by decisin-makers 19

27 Ease f develpment Extendibility Supprt fr mdeling and analysis Supprt fr data access Standalne, integrated, and Web-based Characteristics f a DSS Supprt fr decisin-makers in semi-structured and unstructured prblems. Supprt fr managers at varius managerial levels, ranging frm tp executive t line managers. Supprt fr individuals and grups. Less structured prblems ften requires the invlvement f several individuals frm different departments and rganizatin level. Supprt fr interdependent r sequential decisins. Supprt fr intelligence, design, chice, and implementatin. Supprt fr variety f decisin prcesses and styles. DSSs are adaptive ver time. Benefits f DSS Imprves efficiency and speed f decisin-making activities. Increases the cntrl, cmpetitiveness and capability f futuristic decisin-making f the rganizatin. Facilitates interpersnal cmmunicatin. Encurages learning r training. Since it is mstly used in nn-prgrammed decisins, it reveals new appraches and sets up new evidences fr an unusual decisin. Helps autmate managerial prcesses. Cmpnents f a DSS Fllwing are the cmpnents f the Decisin Supprt System: Database Management System (DBMS): T slve a prblem the necessary data may cme frm internal r external database. In an rganizatin, internal data are generated by a system such as TPS and MIS. External data cme frm a variety f surces such as newspapers, nline data services, databases (financial, marketing, human resurces). Mdel Management System: It stres and accesses mdels that managers use t make decisins. Such mdels are used fr designing manufacturing facility, 20

28 analyzing the financial health f an rganizatin, frecasting demand f a prduct r service, etc. Supprt Tls: Supprt tls like nline help; pulls dwn menus, user interfaces, graphical analysis, errr crrectin mechanism, facilitates the user interactins with the system. Classificatin f DSS There are several ways t classify DSS. Hi Apple and Whinstne classifies DSS as fllws: Text Oriented DSS: It cntains textually represented infrmatin that culd have a bearing n decisin. It allws dcuments t be electrnically created, revised and viewed as needed. Database Oriented DSS: Database plays a majr rle here; it cntains rganized and highly structured data. Spreadsheet Oriented DSS: It cntains infrmatin in spread sheets that allws create, view, mdify prcedural knwledge and als instructs the system t execute self-cntained instructins. The mst ppular tl is Excel and Ltus Slver Oriented DSS: It is based n a slver, which is an algrithm r prcedure written fr perfrming certain calculatins and particular prgram type. Rules Oriented DSS: It fllws certain prcedures adpted as rules. Rules Oriented DSS: Prcedures are adpted in rules riented DSS. Exprt system is the example. Cmpund DSS: It is built by using tw r mre f the five structures explained abve. Types f DSS Fllwing are sme typical DSSs: Status Inquiry System: It helps in taking peratinal, management level, r middle level management decisins, fr example daily schedules f jbs t machines r machines t peratrs. Data Analysis System: It needs cmparative analysis and makes use f frmula r an algrithm, fr example cash flw analysis, inventry analysis etc. Infrmatin Analysis System: In this system data is analyzed and the infrmatin reprt is generated. Fr example, sales analysis, accunts receivable systems, market analysis etc. Accunting System: It keeps track f accunting and finance related infrmatin, fr example, final accunt, accunts receivables, accunts payables, etc. that keep track f the majr aspects f the business. Mdel Based System: Simulatin mdels r ptimizatin mdels used fr decisin-making are used infrequently and creates general guidelines fr peratin r management. 21

29 10. MIS Knwledge Management System All the systems we are discussing here cme under knwledge management categry. A knwledge management system is nt radically different frm all these infrmatin systems, but it just extends the already existing systems by assimilating mre infrmatin. As we have seen, data is raw facts, infrmatin is prcessed and/r interpreted data, and knwledge is persnalized infrmatin. What is Knwledge? Persnalized infrmatin State f knwing and understanding An bject t be stred and manipulated A prcess f applying expertise A cnditin f access t infrmatin Ptential t influence actin Surces f Knwledge f an Organizatin Intranet Data warehuses and knwledge repsitries Decisin supprt tls Grupware fr supprting cllabratin Netwrks f knwledge wrkers Internal expertise Definitin f KMS A knwledge management system cmprises a range f practices used in an rganizatin t identify, create, represent, distribute, and enable adptin t insight and experience. Such insights and experience cmprise knwledge, either embdied in individual r embedded in rganizatinal prcesses and practices. Purpse f KMS Imprved perfrmance Cmpetitive advantage Innvatin 22

30 Sharing f knwledge Integratin Cntinuus imprvement by: Driving strategy Starting new lines f business Slving prblems faster Develping prfessinal skills Recruit and retain talent Activities in Knwledge Management Start with the business prblem and the business value t be delivered first. Identify what kind f strategy t pursue t deliver this value and address the KM prblem. Think abut the system required frm a peple and prcess pint f view. Finally, think abut what kind f technical infrastructure are required t supprt the peple and prcesses. Implement system and prcesses with apprpriate change management and iterative staged release. Level f Knwledge Management 23

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32 11. MIS Cntent Management System A Cntent Management System (CMS) allws publishing, editing, and mdifying cntent as well as its maintenance by cmbining rules, prcesses and/r wrkflws, frm a central interface, in a cllabrative envirnment. A CMS may serve as a central repsitry fr cntent, which culd be, textual data, dcuments, mvies, pictures, phne numbers, and/r scientific data. Functins f Cntent Management Creating cntent String cntent Indexing cntent Searching cntent Retrieving cntent Publishing cntent Archiving cntent Revising cntent Managing cntent end-t-end Cntent Management Wrkflw Designing cntent template, fr example web administratr designs webpage template fr web cntent management. Creating cntent blcks, fr example, a web administratr adds empwer CMS tags called "cntent blcks" t webpage template using CMS. Psitining cntent blcks n the dcument, fr example, web administratr psitins cntent blcks in webpage. Authring cntent prviders t search, retrieve, view and update cntent. Advantages f CMS Cntent management system helps t secure privacy and currency f the cntent and enhances perfrmance by: Ensuring integrity and accuracy f cntent by ensuring nly ne user mdifies the cntent at a time. Implementing audit trails t mnitr changes made in cntent ver time. Prviding secured user access t cntent. 25

33 Organizatin f cntent int related grups and flders. Allwing searching and retrieval f cntent. Recrding infrmatin and meta-data related t the cntent, like authr and title f cntent, versin f cntent, date and time f creating the cntent etc. Wrkflw based ruting f cntent frm ne user t anther. Cnverting paper-based cntent t digital frmat. Organizing cntent int grups and distributing it t target audience. 26

34 12. MIS Executive Supprt System Executive supprt systems are intended t be used by the senir managers directly t prvide supprt t nn-prgrammed decisins in strategic management. These infrmatin are ften external, unstructured and even uncertain. Exact scpe and cntext f such infrmatin is ften nt knwn befrehand. This infrmatin is intelligence based: Market intelligence Investment intelligence Technlgy intelligence Examples f Intelligent Infrmatin Fllwing are sme examples f intelligent infrmatin, which is ften the surce f an ESS: External databases Technlgy reprts like patent recrds etc. Technical reprts frm cnsultants Market reprts Cnfidential infrmatin abut cmpetitrs Speculative infrmatin like market cnditins Gvernment plicies Financial reprts and infrmatin 27

35 Features f Executive Infrmatin System Advantages f ESS Easy fr upper level executive t use Ability t analyze trends Augmentatin f managers' leadership capabilities Enhance persnal thinking and decisin-making Cntributin t strategic cntrl flexibility Enhance rganizatinal cmpetitiveness in the market place Instruments f change Increased executive time hrizns. Better reprting system Imprved mental mdel f business executive Help imprve cnsensus building and cmmunicatin Imprve ffice autmatin 28

36 Reduce time fr finding infrmatin Early identificatin f cmpany perfrmance Detail examinatin f critical success factr Better understanding Time management Increased cmmunicatin capacity and quality Disadvantage f ESS Functins are limited Hard t quantify benefits Executive may encunter infrmatin verlad System may becme slw Difficult t keep current data May lead t less reliable and insecure data Excessive cst fr small cmpany 29

37 13. MIS Business Intelligence System The term 'Business Intelligence' has evlved frm the decisin supprt systems and gained strength with the technlgy and applicatins like data warehuses, Executive Infrmatin Systems and Online Analytical Prcessing (OLAP). Business Intelligence System is basically a system used fr finding patterns frm existing data frm peratins. Characteristics f BIS It is created by prcuring data and infrmatin fr use in decisin-making. It is a cmbinatin f skills, prcesses, technlgies, applicatins and practices. It cntains backgrund data alng with the reprting tls. It is a cmbinatin f a set f cncepts and methds strengthened by fact-based supprt systems. It is an extensin f Executive Supprt System r Executive Infrmatin System. It cllects, integrates, stres, analyzes, and prvides access t business infrmatin. It is an envirnment in which business users get reliable, secure, cnsistent, cmprehensible, easily manipulated and timely infrmatin. It prvides business insights that lead t better, faster, mre relevant decisins. Benefits f BIS Imprved Management Prcesses. Planning, cntrlling, measuring and/r applying changes that results in increased revenues and reduced csts. Imprved business peratins. Fraud detectin, rder prcessing, purchasing that results in increased revenues and reduced csts. Intelligent predictin f future. Appraches f BIS Fr mst cmpanies, it is nt pssible t implement a practive business intelligence system at ne g. The fllwing techniques and methdlgies culd be taken as appraches t BIS: Imprving reprting and analytical capabilities Using screcards and dashbards Enterprise Reprting 30

38 On-line Analytical Prcessing (OLAP) Analysis Advanced and Predictive Analysis Alerts and Practive Ntificatin Autmated generatin f reprts with user subscriptins and "alerts" t prblems and/r pprtunities. Capabilities f BIS Data Strage and Management: Data ware huse Ad hc analysis Data quality Data mining Infrmatin Delivery Dashbard Cllabratin /search Managed reprting Visualizatin Screcard Query, Reprting and Analysis Ad hc Analysis Prductin reprting OLAP analysis 31

39 14. MIS Enterprise Applicatin Integratin An rganizatin may use varius infrmatin systems: Supply Chain Management: Fr managing suppliers, inventry and shipping, etc. Human Resurce Management: Ffr managing persnnel, training and recruiting talents; Emplyee Health Care: Fr managing medical recrds and insurance details f emplyees; Custmer Relatinship Management: Fr managing current and ptential custmers; Business Intelligence Applicatins: Fr finding the patterns frm existing data frm business peratins. All these systems wrk as individual islands f autmatin. Mst ften these systems are standalne and d nt cmmunicate with each ther due t incmpatibility issues such as: Operating systems they are residing n; Database system used in the system; Legacy systems nt supprted anymre. EAI is an integratin framewrk, a middleware, made f a cllectin f technlgies and services that allws smth integratin f all such systems and applicatins thrughut the enterprise and enables data sharing and mre autmatin f business prcesses. Characteristics f EAI EAI is defined as "the unrestricted sharing f data and business prcesses amng any cnnected applicatins and data surces in the enterprise." EAI, when used effectively allws integratin withut any majr changes t current infrastructure. Extends middleware capabilities t cpe with applicatin integratin. Uses applicatin lgic layers f different middleware systems as building blcks. Keeps track f infrmatin related t the peratins f the enterprise e.g. Inventry, sales ledger and execute the cre prcesses that create and manipulate this infrmatin. Need fr Enterprise-wise Integratin Unrestricted sharing f data and business prcesses acrss an rganizatin. Linkage between custmers, suppliers and regulatrs. 32

40 The linking f data, business prcesses and applicatins t autmate business prcesses. Ensure cnsistent qualities f service (security, reliability etc.). Reduce the n-ging cst f maintenance and reduce the cst f rlling ut new systems. Challenges f EAI Hub and spke architecture cncentrates all f the prcessing int a single server/cluster. Often became hard t maintain and evlve efficiently. Hard t extend t integrate 3rd parties n ther technlgy platfrms. The cannical data mdel intrduces an intermediary step. Added cmplexity and additinal prcessing effrt. EAI prducts typified. Heavy custmizatin required t implement the slutin. Lck-In: Often built using prprietary technlgy and required specialist skills. Lack f flexibility: Hard t extend r t integrate with ther EAI prducts! Requires rganizatin t be EAI ready. Types f EAI Data Level - Prcess, techniques and technlgy f mving data between data stres. Applicatin Interface Level - Leveraging f interfaces expsed by custm r packaged applicatins. Methd Level - Sharing f the business lgic. User Interface Level - Packaging applicatins by using their user interface as a cmmn pint f integratin. 33

41 15. MIS Business Cntinuity Planning Business Cntinuity Planning (BCP) r Business Cntinuity and Resiliency Planning (BCRP) creates a guideline fr cntinuing business peratins under adverse cnditins such as a natural calamity, an interruptin in regular business prcesses, lss r damage t critical infrastructure, r a crime dne against the business. It is defined as a plan that "identifies an rganizatin's expsure t internal and external threats and synthesizes hard and sft assets t prvide effective preventin and recvery fr the rganizatin, while maintaining cmpetitive advantage and value system integrity." Understandably, risk management and disaster management are majr cmpnents in business cntinuity planning. Objectives f BCP Fllwing are the bjectives f BCP: Reducing the pssibility f any interruptin in regular business prcesses using prper risk management. Minimizing the impact f interruptin, if any. Teaching the staff their rles and respnsibilities in such a situatin t safeguard their wn security and ther interests. Handling any ptential failure in supply chain system, t maintain the natural flw f business. Prtecting the business frm failure and negative publicity. Prtecting custmers and maintaining custmer relatinships. Prtecting the prevalent and prspective market and cmpetitive advantage f the business. Prtecting prfits, revenue and gdwill. Setting a recvery plan fllwing a disruptin t nrmal perating cnditins. Fulfilling legislative and regulatry requirements. Traditinally a business cntinuity plan wuld just prtect the data center. With the advent f technlgies, the scpe f a BCP includes all distributed peratins, persnnel, netwrks, pwer and eventually all aspects f the IT envirnment. Phases f BCP The business cntinuity planning prcess invlves recvery, cntinuatin, and preservatin f the entire business peratin, nt just its technlgy cmpnent. It shuld include cntingency plans t prtect all resurces f the rganizatin, e.g., human resurce, financial resurce and IT infrastructure, against any mishap. 34

42 It has the fllwing phases: Prject management & initiatin Business Impact Analysis (BIA) Recvery strategies Plan design & develpment Testing, maintenance, awareness, training Prject Management and Initiatin This phase has the fllwing sub-phases: Establish need (risk analysis) Get management supprt Establish team (functinal, technical, BCC - Business Cntinuity Crdinatr) Create wrk plan (scpe, gals, methds, timeline) Initial reprt t management Obtain management apprval t prceed Business Impact Analysis This phase is used t btain frmal agreement with senir management fr each timecritical business resurce. This phase has the fllwing sub-phases: Deciding maximum tlerable dwntime, als knwn as MAO (Maximum Allwable Outage) Quantifying lss due t business utage (financial, extra cst f recvery, embarrassment), withut estimating the prbability f kinds f incidents, it nly quantifies the cnsequences Chsing infrmatin gathering methds (surveys, interviews, sftware tls) Selecting interviewees Custmizing questinnaire Analyzing infrmatin Identifying time-critical business functins Assigning MTDs Ranking critical business functins by MTDs Reprting recvery ptins Obtaining management apprval 35

43 Recvery Phase This phase invlves creating recvery strategies are based n MTDs, predefined and management-apprved. These strategies shuld address recvery f: Business peratins Facilities & supplies Users (wrkers and end-users) Netwrk Data center (technical) Data (ff-site backups f data and applicatins) BCP Develpment Phase This phase invlves creating detailed recvery plan that includes: Business & service recvery plans Maintenance plan Awareness & training plan Testing plan The Sample Plan is divided int the fllwing phases: Initial disaster respnse Resume critical business ps Resume nn-critical business ps Restratin (return t primary site) Interacting with external grups (custmers, media, emergency respnders) Final Phase The final phase is a cntinuusly evlving prcess cntaining testing, maintenance, and training. The testing prcess generally fllws prcedures like structured walk-thrugh, creating checklist, simulatin, parallel and full interruptins. Maintenance invlves: Fixing prblems fund in testing Implementing change management Auditing and addressing audit findings Annual review f plan Training is an nging prcess and it shuld be made a part f the crprate standards and the crprate culture. 36

44 16. MIS Supply Chain Management Supply chain management is the systemic, strategic crdinatin f the traditinal business functins and tactics acrss these business functins - bth within a particular cmpany and acrss businesses within the supply chain- all crdinated t imprve the lng-term perfrmance f the individual cmpanies and the supply chain as a whle. In a traditinal manufacturing envirnment, supply chain management meant managing mvement and strage f raw materials, wrk-in-prgress inventry, and finished gds frm pint f rigin t pint f cnsumptin. It invlves managing the netwrk f intercnnected smaller business units, netwrks f channels that take part in prducing a merchandise f a service package required by the end users r custmers. With businesses crssing the barriers f lcal markets and reaching ut t a glbal scenari, SCM is nw defined as: Design, planning, executin, cntrl, and mnitring f supply chain activities with the bjective f creating net value, building a cmpetitive infrastructure, leveraging wrldwide lgistics, synchrnizing supply with demand and measuring perfrmance glbally. SCM cnsists f: peratins management lgistics prcurement infrmatin technlgy integrated business peratins Objectives f SCM T decrease inventry cst by mre accurately predicting demand and scheduling prductin t match it. T reduce verall prductin cst by streamlining prductin and by imprving infrmatin flw. T imprve custmer satisfactin. 37

45 Features f SCM Scpe f SCM 38

46 SCM Prcesses Custmer Relatinship Management Custmer Service Management Demand Management Custmer Order Fulfillment Manufacturing Flw Management Prcurement Management Prduct Develpment and Cmmercializatin Returns Management Advantages f SCM SCM have multi-dimensinal advantages: T the suppliers: Help in giving clear-cut instructin Online data transfer reduce paper wrk Inventry Ecnmy: Lw cst f handling inventry Lw cst f stck utage by deciding ptimum size f replenishment rders Achieve excellent lgistical perfrmance such as just in time Distributin Pint: Satisfied distributr and whle seller ensure that the right prducts reach the right place at right time Clear business prcesses subject t fewer errrs Easy accunting f stck and cst f stck Channel Management: Reduce ttal number f transactins required t prvide prduct assrtment Organizatin is lgically capable f perfrming custmizatin requirements Financial management: Lw cst Realistic analysis Operatinal perfrmance: It invlves delivery speed and cnsistency. 39

47 External custmer: Cnfrmance f prduct and services t their requirements Cmpetitive prices Quality and reliability Delivery After sales services T emplyees and internal custmers: Teamwrk and cperatin Efficient structure and system Quality wrk Delivery 40

48 17. MIS Strategic Business Objectives Strategic planning fr an rganizatin invlves lng-term plicy decisins, like lcatin f a new plant, a new prduct, diversificatin etc. Strategic planning is mstly influenced by: Decisin f diversificatin i.e., expansin r integratin f business Market dynamics, demand and supply Technlgical changes Cmpetitive frces Varius ther threats, challenges and pprtunities Strategic planning sets targets fr the wrkings and references fr taking such lng-term plicy decisins and transfrms the business bjectives int functinal and peratinal units. Strategic planning generally fllws ne f the fur-way paths: Overall Cmpany Strategy Grwth rientatin Prduct rientatin Market rientatin In this chapter, let us discuss the Strategic Business Objectives f MIS with regards t the fllwing aspects f a business: Operatinal Excellence New Prducts, Services and Business Mdels Services and Business Mdels Custmer and Supplier Intimacy Imprved Decisin-making Cmpetitive Advantage, and Survival Operatinal Excellence This relates t achieving excellence in business in peratins t achieve higher prfitability. Fr example, a cnsumer gds manufacturer may decide upn using a wide distributin netwrk t get maximum reach t the custmers and expsure. A manufacturing cmpany may pursue a strategy f aggressive marketing and mass prductin. 41

49 New Prducts, Services, and Business Mdels This is part f grwth strategy f an rganizatin. A new prduct r a new service intrduced, with a very fast grwth ptential prvides a mean fr steady grwth business turnver. With the help f infrmatin technlgy, a cmpany might even pt fr an entirely new business mdel, which will allw it t establish, cnslidate, and maintain a leadership in the existing market as well as prvide a cmpetitive edge in the industry. Fr example, a cmpany selling lw priced detergent may pt fr prducing higher range detergents fr washing machines, washing saps, and bath saps. It invlves market strategies als that includes planning fr distributin, advertisement, market research and ther related aspects. Custmer and Supplier Intimacy When a Business really knws their Custmers and serves them well, 'the way they want t be served', the Custmers generally respnd by returning and buying mre frm the firm. It raises revenues and prfits. Likewise with Suppliers, the mre a Business engages its Suppliers, the better the Suppliers can prvide vital infrmatin. This will lwer the cst and bring huge imprvements in the supply-chain management. Imprved Decisin Making A very imprtant pre-requisite f strategic planning is t prvide the right infrmatin at the right time t the right persn, fr making an infrmed decisin. Well planned Infrmatin Systems and technlgies make it pssible fr the decisin makers t use real-time data frm the marketplace when making infrmed decisins. Cmpetitive Advantage and Survival The fllwing list illustrates sme f the strategic planning that prvides cmpetitive advantage and survival: Planning fr an verall grwth fr the cmpany. Thrugh market research t understand the market dynamics invlving demandsupply. Varius plicies that will dminate the curse and mvement f business. Expansin and diversificatin t cnquer new markets. Chsing a perfect prduct strategy that invlves either expanding a family f prducts r an assciated prduct. Strategies fr chsing the market, distributin, pricing, advertising, packing, and ther market-riented strategies. Strategies driven by industry-level changes r Gvernment regulatins. Strategies fr change management. 42

50 43

51 18. MIS System Develpment Life Cycle Like any ther prduct develpment, system develpment requires careful analysis and design befre implementatin. System develpment generally has the fllwing phases: Planning and Requirement Analysis The prject planning part invlves the fllwing steps: Reviewing varius prject requests Priritizing the prject requests Allcating the resurces Identifying the prject develpment team The techniques used in infrmatin system planning are: Critical Success Factr Business System Planning End/Mean Analysis The requirement analysis part invlves understanding the gals, prcesses, and the cnstraints f the system fr which the infrmatin system is being designed. 44

52 It is basically an iterative prcess invlving systematic investigatin f the prcesses and requirements. The analyst creates a blueprint f the entire system in minute details, using varius diagramming techniques like: Data flw diagrams Cntext diagrams Requirement analysis has the fllwing sub-prcesses: Cnducting preliminary investigatin Perfrming detailed analysis activities Studying current system Determining user requirements Recmmending a slutin Defining Requirements The requirement analysis stage generally cmpletes by creatin f a 'Feasibility Reprt'. This reprt cntains: A preamble A gal statement A brief descriptin f the present system Prpsed alternatives in details The feasibility reprt and the prpsed alternatives help in preparing the csts and benefits study. Based n the csts and benefits, and cnsidering all prblems that may be encuntered due t human, rganizatinal r technlgical bttlenecks, the best alternative is chsen by the end-users f the system. Designing System Architecture System design specifies hw the system will accmplish this bjective. System design cnsists f bth lgical design and physical design activity, which prduces 'system specificatin' satisfying system requirements develped in the system analysis stage. In this stage, the fllwing dcuments are prepared: Detailed specificatin Hardware/sftware plan Building r Develping the System The mst creative and challenging phase f the system life cycle is system design, which refers t the technical specificatins that will be applied in implementing the candidate system. It als includes the cnstructin f prgrammers and prgram testing. 45

53 It has the fllwing stages: Acquiring hardware and sftware, if necessary Database design Develping system prcesses Cding and testing each mdule The final reprt prir t implementatin phase includes prcedural flwcharts, recrd layut, reprt layut and plan fr implementing the candidate system. Infrmatin n persnnel, mney, hardware, facility and their estimated cst must als be available. At this pint prjected cst must be clse t actual cst f implementatin. Testing the System System testing requires a test plan that cnsists f several key activities and steps fr prgrams, strings, system, and user acceptance testing. The system perfrmance criteria deals with turnarund time, backup, file prtectin and the human factrs. Testing prcess fcuses n bth: The internal lgic f the system/sftware, ensuring that all statements have been tested; The external functins, by cnducting tests t find errrs and ensuring that the defined input will actually prduce the required results. In sme cases, a 'parallel run' f the new system is perfrmed, where bth the current and the prpsed system are run in parallel fr a specified time perid and the current system is used t validate the prpsed system. Deplyment f the System At this stage, system is put int prductin t be used by the end users. Smetime, we put system int a Beta stage where users feedback is received and based n the feedback, the system is crrected r imprved befre a final release r fficial release f the system. System Evaluatin and Maintenance Maintenance is necessary t eliminate the errrs in the wrking system during its wrking life and t tune the system t any variatin in its wrking envirnment. Often small system deficiencies are fund, as system is brught int peratin and changes are made t remve them. System planner must always plan fr resurces availability t carry n these maintenance functins. 46

54 19. MIS Develpment Prcess In MIS, the infrmatin is recgnized as a majr resurce like capital and time. If this resurce has t be managed well, it calls upn the management t plan fr it and cntrl it, s that the infrmatin becmes a vital resurce fr the system. The management infrmatin system needs gd planning. This system shuld deal with the management infrmatin nt with data prcessing alne. It shuld prvide supprt fr the management planning, decisin-making and actin. It shuld prvide supprt t the changing needs f business management. Majr challenges in MIS implementatin are: Quantity, cntent and cntext f infrmatin - hw much infrmatin and exactly what shuld it describe. Nature f analysis and presentatin - cmprehensibility f infrmatin. Availability f infrmatin - frequency, cntemprariness, n-demand r rutine, peridic r ccasinal, ne-time inf r repetitive in nature and s n Accuracy f infrmatin. Reliability f infrmatin. Security and Authenticatin f the system. Planning fr MIS MIS design and develpment prcess has t address the fllwing issues successfully: There shuld be effective cmmunicatin between the develpers and users f the system. There shuld be synchrnizatin in understanding f management, prcesses and IT amng the users as well as the develpers. Understanding f the infrmatin needs f managers frm different functinal areas and cmbining these needs int a single integrated system. Creating a unified MIS cvering the entire rganizatin will lead t a mre ecnmical, faster and mre integrated system, hwever it will increase in design cmplexity manifld. The MIS has t be interacting with the cmplex envirnment cmprising all ther sub-systems in the verall infrmatin system f the rganizatin. S, it is extremely necessary t understand and define the requirements f MIS in the cntext f the rganizatin. It shuld keep pace with changes in envirnment, changing demands f the custmers and grwing cmpetitin. 47

55 It shuld utilize fast develping in IT capabilities in the best pssible ways. Cst and time f installing such advanced IT-based systems is high, s there shuld nt be a need fr frequent and majr mdificatins. It shuld take care f nt nly the users i.e., the managers but als ther stakehlders like emplyees, custmers and suppliers. Once the rganizatinal planning stage is ver, the designer f the system shuld take the fllwing strategic decisins fr the achievement f MIS gals and bjectives: Develpment Strategy: Example - an nline, real-time batch. System Develpment Strategy: Designer selects an apprach t system develpment like peratinal verses functinal, accunting verses analysis. Resurces fr the Develpment: Designer has t select resurces. Resurces can be in-huse verses external, custmized r use f package. Manpwer Cmpsitin: The staffs shuld have analysts, and prgrammers. Infrmatin system planning essentially invlves: Identificatin f the stage f infrmatin system in the rganizatin. Identificatin f the applicatin f rganizatinal IS. Evlutin f each f this applicatin based n the established evlutin criteria. Establishing a pririty ranking fr these applicatins. Determining the ptimum architecture f IS fr serving the tp pririty applicatins. 48

56 Infrmatin System Requirements The fllwing diagram illustrates a brief sketch f the prcess f infrmatin requirement analysis: The fllwing three methdlgies can be adpted t determine the requirements in develping a management infrmatin system fr any rganizatin: Business Systems Planning (BSP) - this methdlgy is develped by IBM. It identifies the IS pririties f the rganizatin and fcuses n the way data is maintained in the system. It uses data architecture supprting multiple applicatins. It defines data classes using different matrices t establish relatinships amng the rganizatin, its prcesses and data requirements. Critical Success Factr (CSF) - this methdlgy is develped by Jhn Rckart f MIT. It identifies the key business gals and strategies f each manager as well as that f the business. Next, it lks fr the critical success factrs underlying these gals. Measure f CSF effectiveness becmes an input fr defining the infrmatin system requirements. End/Means (E/M) analysis - this methdlgy is develped by Wetherbe and Davis at the University f Minnesta. It determines the effectiveness criteria fr utputs and efficiency criteria fr the prcesses generating the utputs. At first it identifies the utputs r services prvided by the business prcesses. Then it describes the factrs that make these utputs effective fr the user. Finally it selects the infrmatin needed t evaluate the effectiveness f utputs. 49

57 Infrmatin System Analysis and Design System analysis and design fllws the typical System/Sftware Design Life Cycle (SDLC) as discussed in the previus chapter. It generally passes thrugh the fllwing phases: Prblem Definitin Feasibility Study Systems Analysis System Design Detailed System Design Implementatin Maintenance In the analysis phase, the fllwing techniques are cmmnly used: Data flw diagrams (DFD) Lgic Mdeling Data Mdeling Rapid Applicatin Develpment (RAD) Object Oriented Analysis (OOA) Technlgy fr Infrmatin Systems The technlgy requirement fr an infrmatin system can be categrized as: Devices Data center systems - It is the envirnment that prvides prcessing, strage, netwrking, management and the distributin f data within an enterprise. Enterprise sftware - These are sftware system like ERP, SCM, Human Resurce Management, etc. that fulfill the needs and bjectives f the rganizatins. IT services - It refers t the implementatin and management f quality IT services by IT service prviders thrugh peple, prcess and infrmatin technlgy. It ften includes varius prcess imprvement framewrks and methdlgies like six sigma, TQM, and s n. Telecm services System Test Planning and Executin The system shuld be fully tested fr errrs befre being fully peratinal. The test plan shuld include fr each test: Purpse Definitin 50

58 test inputs detailed specificatin f test prcedure details f expected utputs Each sub-system and all their cmpnents shuld be tested using varius test prcedures and data t ensure that each cmpnent is wrking as it is intended. The testing must include the users f the system t identify errrs as well as get the feedback. System Operatin Befre the system is in peratin, the fllwing issues shuld be taken care f: Data security, backup and recvery; Systems cntrl; Testing f the system t ensure that it wrks bug-free in all expected business situatins; The hardware and sftware used shuld be able t deliver the expected prcessing; The system capacity and expected respnse time shuld be maintained; The system shuld be well dcumented including: A user guide fr inexperienced users, A user reference r peratins manual fr advanced users, A system reference manual describing system structures and architecture. Once the system is fully peratinal, it shuld be maintained thrughut its wrking life t reslve any glitches r difficulties faced in peratin and minr mdificatins might be made t vercme such situatins. Factrs fr Success and Failure MIS develpment prjects are high-risk, high-return prjects. Fllwing culd be stated as critical factrs fr success and failure in MIS develpment: It shuld cater t a specific, well-perceived business. The tp management shuld be cmpletely cnvinced, able and willing t such a system. Ideally there shuld be a patrn r a spnsr fr the system in the tp management. All users including managers and ther emplyees shuld be made an integral part f the develpment, implementatin, and use f the system. There shuld be an peratinal prttype f the system released as sn as pssible, t create interest amng the users. There shuld be gd supprt staff with necessary technical, business, and interpersnal skills. 51

59 The system shuld be simple, easy t understand withut adding much cmplexity. It is a best practice, nt t add up an entity unless there is bth a use and user fr it. It shuld be easy t use and navigate with high respnse time. The implementatin prcess shuld fllw a definite gal and time. All the users including the tp management shuld be given prper training, s that they have a gd knwledge f the cntent and functin f the system, and can use it fully fr varius managerial activities such as reprting, budgeting, cntrlling, planning, mnitring, etc. It must prduce useful utputs t be used by all managers. The system shuld be well integrated int the management prcesses f planning, decisin-making, and mnitring. 52

60 20. MIS Managerial Decisin-Making Cncept f Decisin-Making Decisin-making is a cgnitive prcess that results in the selectin f a curse f actin amng several alternative scenaris. Decisin-making is a daily activity fr any human being. There is n exceptin abut that. When it cmes t business rganizatins, decisin-making is a habit and a prcess as well. Effective and successful decisins result in prfits, while unsuccessful nes cause lsses. Therefre, crprate decisin-making is the mst critical prcess in any rganizatin. In a decisin-making prcess, we chse ne curse f actin frm a few pssible alternatives. In the prcess f decisin-making, we may use many tls, techniques, and perceptins. In additin, we may make ur wn private decisins r may prefer a cllective decisin. Usually, decisin-making is hard. Majrity f crprate decisins invlve sme level f dissatisfactin r cnflict with anther party. Let's have a lk at the decisin-making prcess in detail. Decisin-Making Prcess Fllwing are the imprtant steps f the decisin-making prcess. Each step may be supprted by different tls and techniques. 53

61 Step 1: Identificatin f the Purpse f the Decisin In this step, the prblem is thrughly analyzed. There are a cuple f questins ne shuld ask when it cmes t identifying the purpse f the decisin. What exactly is the prblem? Why the prblem shuld be slved? Wh are the affected parties f the prblem? Des the prblem have a deadline r a specific timeline? Step 2: Infrmatin Gathering A prblem f an rganizatin will have many stakehlders. In additin, there can be dzens f factrs invlved and affected by the prblem. 54