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CH-1 Book-1Information and Management

InformationInformation is a processed form of data that is information is a finished product.

DataData is the raw material with which we start.Information is processed data which is used to trigger certain actions or gain better understanding of what the data implies.

MIS – Management Information SystemMIS is a Computer based information system.MIS is a System, which provides information support for decision making in the organization.

Types of Informationo Strategic Information

Needed for long range planning and directing the course the business should take.

Less structured.o Tactical Information

Needed to take short range decisions to run the business efficiently.

Requires specifically designed processing of data.o Operational Information

Needed for day-to-day operations of a business organization.o Statutory Information(Not Syllabus)

Information and reports which are required by law to be sent to government are statutory information.

Type Example ManagerStrategic Unstructured New branches are opened?

Business is diversified?Chief Executive

Tactical Rate vendors?Credit limits of customers.New discount policies.

Middle Level Managers

Operational List of items to be re-ordered.List of defaulting customers.Daily ledger accounts.

Line Manager

Prepared By – Group - 3

Volume of Type of Information InformationCondensed Unstructured

Strategic Planning &Policies

Summarized Reasonably Structured

Short Range Policies

Day-to-Day Policies

Detailed Structured

Why do we need a computer-based information systemo Size of Organization is becoming larger.o Computer-based processing enables the same data to be processed in many

ways.o As the volume of data has increased and the variety of information.o Organizations are now distributed with many branches.o Markets are becoming competitive.

Management Structure

Chief Executive

Marketing Materials Finance Human ResourcesManager Manager Manager Manager

Line Managers


TOP LEVEL

MIDDLE LEVEL

LINE MANAGER

Management And Information Requirementso Human Resource Management

StrategicPolicies on wages and incentivesPolicies on personnel welfare and facilities.

TacticalMorale of personnelAbsentee reductionLeave and overtime policiesPerformance appraisal

OperationalSkills inventoryLeave record

o Production Management Strategic

Yearly and monthly productionIdentifying best product mix.

TacticalIdentifying and controlling areas of high cost.Identifying critical bottlenecks in production.

OperationalMonitoring up to date production informationMonitoring tools, machines, and human resource availability.

o Materials Management Strategic

Determining optimal levels of inventoryReducing varieties of inventory.

TacticalDeveloping vendors performance measuresControlling high value inventory.

OperationalGoods received.Critical item received.List of item rejected.

o Finance Management Strategic

Methods of financingPricing policiesTax planning.


TacticalCost increases and provingCredit and payment status.

OperationalTax returnsProfit and loss accountPayment and receipts

o Marketing Management Strategic

Search new marketing strategies.Analysis of competitors

TacticalAdvertising techniquesCustomer preferenceCorrelation of prices and sales

OperationalSales analysis by regionsMarket share and trendsEffect of model changes

o Research, Design and Development ManagementThe goal of this function is to continuously improve existing products and develop new products and processes.

StrategicWhich products are to be developed?What type of improvements is required?

TacticalChecking availability of equipment.Setting intermediate goals for projects.

OperationalProgress against goalsStatus of outstanding orders for equipment and components.

Qualities of Information1. Accurate – Ensure correct I/P and processing rules2. Complete – Include all data3. Trustworthy – Do not hide unpleasant information4. Timely – Give at right time5. Up to date – include all data up to present time6. Relevant – understand user needs7. Summarized – summarize relevant information8. Significance understandable – Use attractive format & graphical charts.


CH-2 Book-1Examples of Information System

A hierarchical chart of offices in a university

Vice Chancellor

Academic department’s Central administration common facilities(Teaching & research)

Student’s section library

Accounts section canting

Purchase section computer center

Stores section auditorium

Hostel office

Medical centre

Words department

Human resource section

Miscellaneous

Function of various departments of a manufacturing organizationo Production – Planning, control, maintenance and bill of materials.o Marketing – advertising, customer records, sales analysis.o Finance – billing, payments, payroll, costing, and tax planningo Human resource – records, training, and recruitmento Stores(Material Management) – receipts, enquiry processing.o Maintenance – physical and communication facilities.o Research and Development – production testing, design, improvement.


Information processing for a Storeo Master file creation or update

Reject Records

New ItemReceive

Accepted Records

Data Entry Operator Program on computer Disk File

Master File

o Online Data EntryRecords are entered manually by a data entry operator who enters the records using keyboard of a terminal connected to the computer is called online Data Entry.

o Offline Data EntryData may also be entered on a separate computer such as Personal Computer and stored on a floppy disk is called offline data entry.

o Operations Performed in Stores Information Processing1. Create Inventory Database2. Issues/Re-order3. Receipts4. Enquiry


Keyin

Record Edit

ControlCheck

Store instockledger

Transaction Processing Program

Requestslip

Data Entry

To requestor To Purchase department

o Processing steps in an enquiry system

Enquiry DisplayResponse


Key in record

Check Validity

Retrieve data from Master File

ProcessRequest

Master FileOn disk

UpdateMaster File

Retrieve from Master File

Key In Enquiry

CheckValidity

Stock ledger on disk

Varieties of Information Systems1) Management Information System – Tactical information2) Transaction Processing System – Operational information3) Decision Support System – Strategic information

Operational data collected over a period of time is called data archives and the process of collecting it is called data archiving.


CH-5 Book-2Information Technology: Impact On Society

Impact of IT on Privacyo IT Revolution and Impact on Society.

Social Aspect Nature of impact Nature of effectPrivacy Risk of losing privacy Exposure to Personal, financial,

health, knowledge and information data about behavior.

Work Culture Stressful, unlimited in time(24*7)

Health of individuals affected & social interaction reduced.

Job Opportunities Reduced job opportunities.

Standard of living very high for some while others are not affected.

Market Consumer more knowledgeable.

Consumer behavior more dynamic & unpredictable.

Business & Organization Strategic & competitive.

Organization became lean & flat.

o Protecting privacy is your responsibility and with some protective measures, actions are to be taken by an individual as under.

- Check why personal data is required?- Go commitment on what use it would be put to?- Declare your choice where data should not be used without your permissions.- Do not give Credit card and PAN numbers that identifies you uniquely.- Sign a privacy Agreement/Contract with the Organization.

o While Individual is expected to take care through these actions…- IT industry advocates certain standard ethical practices to safeguard the

privacy of information.- No secret record should be maintained after its use.- No use can be made other than that of specified purpose.- Take permission of individual if other used is required.- Allow individual a right of inspection and correction.


- Organization and processing system are responsible of the secret data.

EthicsEthics is a study of the principles and practices, which guides to decide whether the action taken is morally right or wrong.Ethics if about values and human behavior respecting ethical values means making a beginning to protect generally accepted individual human rights.

- The right to healthy life & work safety.- The right to privacy.- The right to private intellectual property.- The right to descent.(crash)- The right to fair treatment & no discrimination.- The right to be treated by just due process.

o ACM code of Ethics & Professional Conduct- General Moral Imperatives.- Professional responsibilities.- Organizational leadership imperatives.

Technical Solutions for privacy protectionThis activity of capturing data, monitoring its use, and storing happens at backend without the knowledge of the user.The communication system capabilities can identify and analyses the following.

- Identification of a person or location from where an action has started through registration record.

- Which files, websites and web pages visited?- Which transactions have been attempted and completed.

o E.g. buying, selling, displaying, downloading and others. Intellectual Property, Copyright and Patents

o CopyrightCopyright act protects intellectual property for pretty long from copying by others.The Protection is applicable against copying part or full in any manner.The violation of this act is penal and attracts heavy penalty.The weakness of the copyright act is that it does not protect that idea behind product and its use.

o PatentsA ‘patent’ grants the owner of the product exclusive monopoly on the ideas behind the product for number of years, sufficiently protecting the interests of the owner/inventor of the product.

o Challenges to intellectual property Rights


- Production of networks and Internet with associated capabilities, it is becoming difficult to protect intellectual property.

- Internet is used to transmit information in any form freely around the world. It does not distinguish copyright information and other information.

Information System Quality and ImpactThree main sources of poor information system quality and performance producing damaging impact are the following…

- Poor input data qualityo A system with zero error and no bugs is a myth.

- Software Bugs and Errorso Data errors by and large are human errs.

- Hardware and Software Failureso Requirement, Definition, and Description (RDD)o Software requirement Specifications (SRS)

Impact on Quality of LifeFollowing four main areas are seen as affected by impact of information technology…

- People are empowered with information and knowledge.- Business dynamics and competitions is changing so fast that response time to

a change has to be much less than before.- Houses, family and office life is slowly- Information technology has given birth to new crime called as internet crime

o Spammingo Hackingo Jammingo Sending viruseso Sniffing


CH-6 Book-2Decision-Making

Decision-MakingThe word ‘decision’ is derived from the Latin root decide, meaning to cut off.A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation.

- Characteristics of the business decision making are..a. Sequential in nature.b. Exceedingly complex due to risks & trade offs.c. Influenced by personal values.d. Made in institutional settings and business environment.

Rational Decision-MakingA rational decision is the one, which effectively and efficiently, ensures the achievement of the goal for which the decision is made.In reality, there is no right or wrong decision but a rational or an irrational decision.The rationality of the decision made is not the same in every situation.

o Simon Herbert A* provides types of rationality.- Objectively rational- Subjectively rational- Consciously rational- Organizationally rational- Personally rational

o Gross Bertram M** suggests three dimensions of rationality. - The degree of satisfaction of human interest.- The degree of feasibility in achieving the objective.- A consistency in decision-making.

o The problems in Making Rational Decisions- Ascertaining the problem- Insufficient knowledge- Not enough time to be rational- The environment may not cooperate- Other limitations

Decision-Making process (Herbert Simon model)Decision-making is a process which the decision maker uses to arrive at a decision.


The core of this process is described by Herbert Simon in a model.a) Intelligence; b) Design; and C) Choice

a) IntelligenceRaw data collected, process and examined. Identifies a problem calling for a decision.

b) DesignInventing, developing and analyzing the different decision alternatives and testing the feasibility of implementation. Assess the value of the decision outcome.

c) ChoiceSelect one alternative as a decision, based on the selection criteria.

Types of Decision-making systema) If the manager operates in a known environment then it is a closed decision-

making system.b) If the manager operates in an environment not known to him, then the

decision-making system is termed as an open decision-making system. Types of Decisions

a) If the managers have full knowledge, then it is a situation of certainty.b) If he has partial knowledge or a probabilistic knowledge, then it is decision-

making under risk.c) If the manager does not have any knowledge whatsoever, then it is decision-

making under uncertainty. Natures of Decisions

a) Programmed like Structured


Intelligence

Design

Choice

b) Non-programmed like Unstructured

The Law of Requisite varietya) All the decision alternatives and the choices in each probable state;b) The decision rules to handle the situation;c) The system or the method to generate a decision choice.

Methods for deciding Decision AlternativesThere methods for selection of decision alternatives with the goals in view are:a) Optimization Techniquesb) Payoff Analysisc) Decision Tree Analysis

Decision Analysis by Analytical Modelinga) What If Analysis

Decision is made using a model of the problem for developing various solution alternatives and testing them for best choice.

b) Sensitivity AnalysisIn what if analysis you test the effect on solution by changing the value of number of variables simultaneously or changing the relations between them.

c) Goal Achieving AnalysisIn goal seeking analysis, you analyses the problem in exactly reverse way as that of what if analysis or sensitivity analysis.

d) Goal Seeking AnalysisIn goal seeking analysis, you do not fix the goal but you try to achieve a goal of an optimum value arrived at after satisfying all the constraints operating in the problem.

Behavioral Concepts in Decision-makingManager Categories are…1) Task oriented manager2) Achievement oriented manager

Organizational Decision-makinga) Methods of Conflict Resolution

- Allowing local rationality in the setting of goals.- Permission to set goals which can be achieved with an acceptable decision

making rule and systems.- Permission to achieve the goals in a sequential manner.

b) Dealing with uncertainty- The Market Uncertainty- The price fluctuations


- The changes in the Government policy- Not knowing the moves of the competitors- The technology changes are some of the factors

c) Methods of Dealing with uncertainty- Decide for a limited short period, and make a provision to correct the decision.- Negotiated decision making with limited liability.


CH-7 Book-2Information, Knowledge, Business

Intelligence

Information ConceptsData is like raw materials while the information is equivalent to the finished goods produced after processing the raw material.

o Characteristics of Informationa. Improves representation of an entityb. Updates the level of knowledgec. Has a surprise valued. Reduces uncertaintye. Aids in decision-making

1. Conceptual Model of Communication

2. Information Presentationa. Information Summarization

Key For Summarization

Focus of information Operations

Management position Responsibility General Manager, Materials

Management Function Performance, Goals Production Target,Levels in the organization Relevance to the level MiddleSelective on condition Exceptions Only those products,


Source TransmitterEncoder

Channel ReceiverDecoder

Destination

Noise and Distortion

where sale is below the budge.

3.Methods to Avoid Misuse of informationa. Delayed delivery of informationb. Change in the format and content of the reportc. Suppression and filtering of the information of confidential and

sensitive natured. Suppress the details and references of data and informatione. Truncated or irregular presentation

4.Bias in InformationInformation have certain attributes to increase its utility.

a. The accuracy in representationb. The form of presentationc. The frequency of reportingd. The scope of reportinge. The scope of collectionf. The time scaleg. The relevance to decision makingh. Complete for the decision considerationsi. The timeliness of reporting

Information of Quality ProductThe quality of information is high, if it creates managerial impact leading to attention, decision and action.


Four Dimensions to Measure Information Quality

Utility Satisfaction Error Bias

FormTimeAccessPossession

An incorrect data measurementAn incorrect collection methodLoss of data or incomplete dataPoor application of data validation

Middle Mgt

Operational Mgt

Classification of the InformationJohn Deaden of Harvard University classifies information in the following manner:a. Action Versus Non-action informationb. Recurring Versus Non-recurring informationc. Internal Versus External Information

1. The information can also be classified as under, in terms of its applicationa. Planning informationb. Control informationc. Knowledge

2. The information can also be classified based on its USAGE.a. Organization informationb. Database informationc. Functional or Operational Information

External Low

Source of Top Mgt Structured Information Information

Internal High


Parameters Impacting Quality

Impartiality Validity Reliability Consistency Age

Methods of Data and Information Collectiona. Observationb. Experimentc. Surveyd. Subjective estimatione. Transition processingf. Purchased from outsideg. Publicationsh. Government agencies

Value of the informationThe information is called a perfect information, if it wipes out uncertainty or risk completely. However a perfect information is a myth.The value of the additional information making the existing information perfect(VPI) is:

VPI = (V2 – V1) – (C2 – C1) Where V = value of the information C = cost of obtaining the information V1 and C1 = relate to one set of information V2 and C2 = relate to the new set.If the VPI is very high, then it is beneficial to serve the additional information need.

General Model of a Human as an Information ProcessorMethods of Filtering…………a. The frame of reference by using knowledge and experience.b. Universally acclaimed normal decision procedure.c. Select data base on confirmed methods. ‘

1. Generalised Model of information processor


Brain

Use of Stored Knowledge and Experience

InputsFrom

Eyes, Ears

FilteringAndBlocking

MentalProcessing

Application,Selection,Manipulation

Output

Decision,Action,Registration

2. Manager’s individual DifferencesReasons of individual Differences……..a. Locus of control inter or external to the situationb. Personal dogmatismc. Risk propensityd. Tolerance for ambiguitye. Manipulative intelligencef. Experience in decision-makingg. Knowledge of the task, tools and technologyh. The management level from lower to higher

Knowledge and Knowledge Management Systems

- Knowledge is a set of information which provides capability to understand different situations, enables to anticipate implications and judge their effects.

- Knowledge is not an advanced stage of information and nor it is a wisdom.- Knowledge is a capability to handle a complex situation.

1. The differentiation between data, information, and knowledge….

Rainfall record collected every day is a ‘Data’ Data is processed by region and month, it is an ‘Information’ This information is analyzed using analytical tools, it reveals rainfall

pattern. This pattern is ‘Knowledge’. This Knowledge is processed taking other relevant variables and

information to build a forecasting model to predict the rainfall, the model is a Knowledge asset.

This model is built by Dr. Govarikar and is an knowledge ‘Intellectual Capital(IC)’ of meteorological lab of India.

2. Knowledge driven capability has three components:

a. Visualization of strategic options to handle complex situation.


InputsFrom

Eyes, Ears

FilteringAndBlocking

MentalProcessing

Application,Selection,Manipulation

Output

Decision,Action,Registration

b. Assessment of its results and forecasting its effects in terms of benefits, cost, losses and damages.

c. Wisdom represents decisive ability to decide whether ‘Knowledge’ is truly applicable to resolve a complex problem situation.

3. Types of Knowledge are….

a. Explicit – is the one which can be codified and/or modeled. Software products are packaging explicit knowledge.

b. Tacit - Intangible and cannot be codified. The consultants and experts possess tacit knowledge.

c. Intellectual – could be tacit or explicit and is owned by some body. It is also termed as intellectual asset or capital.

4. Knowledge Management

- Knowledge management is the systematic and explicit management of knowledge related activities, practices, programs and policies within enterprises to create a vital knowledge share it with others and improve its content and quality.

- Knowledge management comprehensive strategy it to focus on three perspectives of business of business operational, tactical and strategic.

5. Driving Forces Behind KM

a. External forcesi. Globalization of businessii. Demanding customersiii. Innovative competitorsiv. Resourceful vendors

b. Internal forcesi. Bottlenecks in effectivesii. Technological Capabilitiesiii. Understanding of human cognitive functions

c. Changing workplace

6. Key Aspects of Knowledge Management


1. Accelerating Knowledge creation and application2. Converting tacit into explicit knowledge3. Build knowledge Assets – IC

7. Designing for Business Benefits from KM

The trend in knowledge economy is to use KM for business benefit by designing product, services and process which deliver them.

a. The KM Process are…i. Generation and Storage of knowledgeii. Identification iii. Exploitation of knowledgeiv. Generation and application of knowledge delivery strategies

b. Barriers of KM processi. People who suffer from inertia to changeii. Lack of motivationiii. Difficulties in transferring knowledge to new peopleiv. Afraid of sharing knowledgev. Reluctance to change traditional system.

c. Methods and Toolsi. Traditional Database toolsii. Process modeling toolsiii. Work group management toolsiv. Search engines and navigation toolsv. Visualization toolsvi. Collaborative tools

Business Intelligence

- BI is used for timely, effective decision and better plans for the future.- BI is collection of processes, tools and technologies helpful in achieving more

profit.- BI definition and concept encompasses following things.

Technology and software infrastructure: Databases, data warehouses: Develops and maintains knowledge databases

- A typical BI environment involves business model, data models, data sources.


- ETL – Extraction, Transformation & Loading tools are used on data warehouse, data marts.

- OLAP analysis and reporting tools are used on data warehouse for finding useful information.

CH-8 Book-2System Engineering: Analysis and Design

System ConceptsSystem is defined as a set of elements arranged in an orderly manner to accomplish an objective.Egg. Computer system, Accounting System, and Business organization

- System has three basic parts are….

- Generalized Model of a system

Environment

Filter

- All the system operates in an environment.- The environment may influence the system in its design and performance.

When a system is designed to achieve certain objectives.- It automatically sets the boundaries for itself.


Input Process Output


- The understanding of boundaries of the system is essential to bring a clarity in explaining the system components and their arrangement.

- Control System Model

Channels of Feedback

- The concept of control is based on the condition of a feedback is positive and is applied to data processing where all the features are used in the programmers of the data processing.

- The same concept of the control system model is used in the management information system.

- The corrective unit in the MIS is the manager or the decision maker.- The System control is an integral part of the system and ensures the

achievement of the objectives.

Types of System- When many smaller systems together make a larger system, the smaller

systems are called the subsystems of the larger system.- In a serial system processing, the entire output of subsystem is the input to the

next subsystem and so on.



Corrective Unit ComparisonUnit

Output

Output

Subsystem1

Manufacturing

Subsystem2

Quality Control

Subsystem3

Marketing

- Matrix arrangement the different outputs go to different subsystems. A subsystem receives more than one input from other subsystems.

- If the process of input transformation is not visible and understandable then we say that the system is a black box system and the process is not transparent as shown follow Fig.

- A system is called deterministic when the input, the process and the outputs are known with certainty.

- A system is called probabilistic, when the output can only be predicted in probabilistic terms.

- If a system is functioning in isolation from the environment, then the system does not have any exchange with the environment nor is it influenced by the environmental changes. Such a system is called a Closed System.

- If the system has exchange with the environment and is influenced by the environment then it is called an Open System.


Subsystem1

Manufacturing

Subsystem2

Marketing

Subsystem3

Quality Control

Subsystem4

Accounting

Input Output

Handling System Complexity

- The Process of dividing the system into subsystem is known factorization up to N level.

- The Process of merging subsystems of similar nature is known as clustering.

System Efficiency and Effectiveness

- The efficiency indicates the manner in which the inputs are used by the system. Being efficient means the system uses inputs in a ‘right’ way. If the input-output ratio is adverse, we say that the system is inefficient though it produces the desired output.

- The Effectiveness is the measure for deciding whether the system provides the desired output or not. Being effective means producing the right output in terms of quantity and quality.

Post Implementation Problems in a System

- The process of decay and its cause is called ‘Entropy’.- Entropy : A numerical measure of the uncertainty of an outcome

Classes of System

1. Data Processing System (DPS)2. Transaction Processing System (TPS)3. Application Processing System (APS)4. Business Function Processing System (BPS)5. Integrated Information Processing System (IPS)

General Model of MIS


Sourcing Systems

Data Processing

Transaction Processing

Application Processing

Systems Processing

Production Systems

Query Processing

Exception Reporting

Database, Knowledge

Decision Support Sys.

Processing

MIS Model

CH-9 Book-2Development Process Of MIS

Introduction

- The plan for development and its implementation is a basic necessity for MIS.- The plan of MIS is consistent to the business plan of the organization.- A long range MIS plan provides direction for the development of the systems,

and provides a basic for achieving the specific targets or tasks against a time frame

MIS Goals and Objective

Provide online information on the stock, markets and the accounts balances.

The query processing should not exceed more than three seconds. The focus of the system will be on the end user computing and access

facilities. Information support will be the first in the strategic areas of management

such as marketing or service or technology.

Business plan MIS planBusiness goals & objectives. Management information systemBusiness plan and strategy. Information strategy for the

business planStrategy planning & decisions. Architecture of the management

information systemManagement plan for execution and control

System development schedule

Operation plan for the execution Hardware & Software plan for the procurement

- Strategy for the plan Achievement:


Development strategy: An online, a batch, a real time.System development strategy: SSAD Vs OOTResources for system development: In house Vs externalManpower composition: Analyst, Programmer skill

- The Architecture of the MIS

Provides a system structures and their input, output and linkages.Simplification, coupling and decoupling of subsystems.

- The System Development Schedule

A schedule is made for the development of the system.While preparing the schedule due consideration is given to the importance of the system in the overall information requirement.

- Hardware and Software Plan

a. The organization’s strategic plan should be the basis for the MIS strategic plan.

b. The information system development schedule should match with the implementation schedule of the business plan.

c. The choice of information technology is a strategic business decision and not a financial decision.

Ascertaining the Class of Information – Classes of Information

1.Organizational Information

- The number of employee, products, services locations the type of business all are example of information.

- Many users at all the levels.

2.Function Managerial information

- Work design- Responsibility- Functional objective


3.Knowledge (An Information Set)

- The knowledge creates an awareness of those aspects of business where the manager is forced to think.

- Knowledge is tracked continuously and reported in a fixed format.- The nature of knowledge is analytical and relates to the past, the current and

the future.

4.Decision Support Information

- Most of the information required by the middle and the top management is for decision making.

- Information is used in a DSS for model building and problem solving.

5.Operational Information

- The main purpose of this information is fact finding and taking such actions or decisions which will affect the operations at a micro level.

Determining the information Requirement

The difficulty to determine a correct and complete set of information is on account of the factors given below.

- The capability constraint of the human being as an information processor, a problem solver and a decision maker.

- The nature and the variety of information in précised terms.

Four Methods of determining the information requirements.

- Asking or interviewing- Determining form the existing system- Analyzing the critical success factors- Experimentation and modeling

Development and Implementation of the MIS

1. Prototype Approach:- When the system is complex, the development strategy is Prototyping of the

system

Life Cycle Approach:


- There are many systems or subsystems in the MIS which have a life cycle, that is, they have birth and death.

- Example of such systems is payroll, share accounting, basic financial accounting, finished goods accounting and dispatching, order processing.


Lewin’s model of implementation process

Three steps in this process Unfreezing

To make the people more receptive and interested in the Change.

Choosing–To choose a course of action where the process begins andReaches the desired level of stability

Refreezing – Where the change is consolidated and equilibrium (balance) is reinforced.

Management of information quality in MIS: Complete data of all the transactions Valid transaction and input data Accuracy and precision Relevance to the user/decision maker/Stake holder Timely information Meaningful and complete information

The quality of the parameters is assured if following steps are taken All the input is processed and controlled All updating and corrections are completed Inputs are subjected to validity checks Data files is protected and secured Immediate processing checks are introduced Proper file selection for processing Back-up of the data and files System audit is conducted from time to time The system modifications are approved Systems are developed with a standard specification of design and development IS controlled through programmed control, process control and access Control. Ensure MIS model confirms consistency to business plan


CH-12 Book-2Applications in Manufacturing Sector

Introduction

This chapter is an introduction to the business applications of MIS. For each application, inputs, which are processed by OLTP system are Determined. The system designer develops the applications with the objective of Accounting the transaction based results and providing the reports on the same.

Personnel Management (PM) :-

1. Input Transaction Documents

- Personnel application form- Appointment letter- Attendance and leave record- Bio-data, self and family- Appraisal form- Production/Productivity data on the jobs

2. Applications

- The viewers of the database are personnel managers, head of the human resource development department and top management.

3. Accounting

- Attendance- Manpower- Leave- Salary / Wages, statutory deductions- Loans and deductions

4. Query

- Who is who?- Strength of section, department, division- Number of persons with a particular skill- Attendance, leave and absenteeism record of all employees

5. Analysis


- Analysis of attendance by a class of employees- Leave analysis by a group of employees- Trend in the leave record

6. Control

- Probable absence versus workload- Projection of personnel cost against manpower increase- Assessment of accident records against safety measures taken

7. Reports

- The reports of the system will be used mainly by the personnel Department and the top management.

8. Statutory reports

- Attendance Muster- Strength of the employees by category – permanent, trainees & Apprentices- Provident fund, ESI reports, Ledgers and Returns

9. Information updates

- Daily attendance report- Employee strength- Joining and transfers of the employees- Personnel cost by department, job, product

10.Operation update

- Daily attendance to plan the workload- Overtime versus work completed- Projected absenteeism and distribution of workload

11.Decision analysis

- Analysis of attendance for season, festival and by skills, scheduling of the jobs accordingly.

- Overtime analysis by department, employees and job to decide the strength of personnel

12.Action reports

- Recruitment and additional manpower or subcontracting of jobs- Acceptance of orders on the basis of workload- Reduction, transfer & reorganization of employees to control costs


Financial Management (FM) :-

FM function has a primary objective of meeting the financial needs ofthe business, from time to time, by way of providing working capital and long-term capital to run the business with the goal of containing the cost of capital at the minimum.

1. Input Transactions Documents

- Payments: To suppliers, authorities, employees, shareholders, financial Institutions and others

- Receipts: From customers, authorities, employees, financial institutions and others.

2. Applications

- In FM major application is the Financial Accounting System, which accounts for the financial transactions of the company and produces financial results for the company.

3. Accounting

- The FMS accounts for the following:o Sales o Purchase o Salary / Wageso Inventoryo Expenseso Capital purchaseo Fixed Deposits o Shareholder’s fund o Income taxo Sales Tax

4. Query

- The query system throws light on the debit or credit balance of an account.- For e.g. the query could be on sales with respect to the customer. The query

could be on sales of the product.

5. Decision Analysis

- Cash flow analysis- Sources and uses of funds


- Debtors analysis and aging

6. Control

- Account receivables, outstanding beyond the acceptable norms- Advances to creditors, and non realization of obligations- Valuation of non-moving inventory for disposal- Analysis of non-moving accounts and legal actions

7. Reports

- A major portion of a financial management system is devoted to the statutory compliance and operations update.

8. Statutory compliance

- Tax returns- Registers: Sale Tax, Excise, Tax deducted at source- Declaration of certain results to the financial institutions- Declaration of financial results to the public every six months

9. Information updates

- Monthly trial balance, balance sheet and profit & Loss Account- Stock valuation- Accounts receivables and aging- Accounts payable and aging

10.Operations Update

- Filing of statutory returns and reports- Statutory payments such as advance tax, sales tax, Octopi, Excise Duty etc.- Transactions executed and accounted in the system- Report on finished goods, dispatches and invoicing

11.Decision analysis

- Break even analysis for cost and price decision- ROI analysis for choice of investment- Trend analysis on price of selected commodities- Cash flow, sources and uses of funds

12.Action Update

- Overdue receivables


- Legal action- Termination of business association- Non supply of goods and services but advance paid- Legal action- Revision of terms- Termination of business association- Payments to creditors, where penalties are involved- Poor usage of fixed assets and disposal- Non-moving inventory of, say, more than two years and its disposal

Production Management (PM):-

- The objective of Production Management (PM) function is to provide Manufacturing services to the organ.

- This involves the manufacture of products of a certain specified quality and

within retains costs in a stipulated time fulfilling the promises given to the customer.

1. Input Transaction Documents

- Production programmed- Production schedule- Process planning sheet- Job card- Job Status advice

2. Applications

- The PM is performed through production planning and control, bill of material processing, drawing and process planning, scheduling and monitoring systems as support systems.

3. Accounting

- Quantity of production with respect to a time period- Material requirement and its usage- Rejection quantity at each intermediate stage and the final stage- Breakdown incidence- Labor complement with respect to a period

4. Query

- Status of the job or order in terms of stage and level of completion- Production programmed and jobs schedules- Load status on machine, group of machines


- Status on availability of material

5. Decision analysis

- Make or buy- Make or subcontract- User of alternative material- Use of alternative process- Evolving optimum product mix/job mix- Rescheduling and loading of jobs

6. Control

- Excessive product rejection on account of material and or process- Hold up of key jobs beyond a certain limit- Excessive work in process inventory

7. Information update

- The data on the down time of production facilities- A typical reason for rejection- Output of various jobs versus machines.

8. Operations update

- Statistics such as- Production per day- The rejections by process or job- The machines breakdowns- The jobs completed and handed over for inspection

9. Decision Analysis

- The DSS are extensively used to enable the management to take decisions.- These reports provide information update on the post implementation scenario of

decisions.- The reports inform whether the decision has resulted into expected performance

as designed.

Raw Materials Management (RMM) :-

The objective of Materials Management (RM) is to provide material for production, maintenance and services at economical prices, in a appropriate quantity and quality and with no extra cost of carrying the inventory.


1. Input Transaction Document- Purchase requisition- Purchase order- Receipt of goods- Return of goods to supplier

2. Applications

- Forecasting and planning- Procurement- Purchase ordering- Goods receipt- Inspection

3. Accounting

- Purchase quantity- Issue quantity- Stocks- Goods returns- Rejections

4. Query

- The first major decision in the function is ‘price’ of an item.- The second decision to take is in stocking of items- The third is to controlling the item


CH-13 Book-2Applications in Service Sector

Introduction to Service Sector:

- Unlike the manufacturing sector, the service sector does not have physical goods to be manufactured for the customer.

- The mission in a service industry is of providing the most satisfying service of the customer, while in a manufacturing industry; it could differ from industry to industry and from organization to organization.

Tom peters in “The Service Edge’ states:

- Listen, understand and respond to the customers- Define a superior service and establish a service strategy- Set standards and measure and performance- Select, Train and empower the employees to work for the customers- Recognize and reward the accomplishments.

Service VS Product:

- A product is tangible (real, original), but a service is not.- The product can be offered on payment, while services are offered on demand.- The quality of the product is possible with reference to the determined standards

while the quality control of a service is difficult due to its reference to the customer’s expectations which are difficult to judge and control.

- The product can be demonstrated before the actual sale while the service cannot be demonstrated.

- The product can be produced, sold and consumed in stags while the service has to be produced, sold and consumed simultaneously.

Service concept

- Service is an identifiable, intangible (untouchable) activity or a process designed to fulfill certain expectations of the customer/consumer.

• Character or attributes of Service

• Intangible

- All services are fully intangible i.e. they lack ‘physical existence’


- They can be seen being delivered and being received by the customer but cannot be displayed.

• Inseparability of receiver and provider

- In case of service, receiver and provider must be present.- Service process cannot be executed unless both are present at the site of

service delivery.

• Storage

- Service being intangible cannot be stored like goods- For e.g. If no patient comes for two hours then the physician is idle and- consulting service potential cannot be stored and made available next day

• Inconsistency

- Service process being intangible, can vary from one service incident to the other service incident.

- Every service experience is different. The inconsistency occurs due to different service providers performing at different times.

Service Process Cycle & Analysis

- All services are bound by process steps and each step adds value in the services.

- All the steps can be classified in stages based on the role played in the process.- These stages together build a service process cycle. The stages in the cycle are

- Initiation of service- Transition to service- Pre service- Service- Post-service


Service Process Cycle & Analysis

- The people who drive the service are to be supported by tools, Information and system assistance so that the customer interaction is Quick, responsive and pleasant and leave a feeling of comfort and Confidence of service delivery.

- Faster data capture and processing in every interaction- Access to various databases and services- Error free transaction processing and updating- And application processing at each stage of service cycle.

Customer Service Design

- Promotion- Product- Price- Place- Processes- People (Process Drivers)

Service Management System

- The process is best managed through a well – designed system ,termed as Service Management System (SMS)

- Description of each module of SMS, its scope and objective in SMS

• Initiation for Service (Front End)

Scope:

- Answer queries, standard and non standard.- Capture the data in standard format to initiate service action- Ascertain the service requirement. Create a bill of service offer.- Give a service job number. Put the service job in a queue.-

• Transition to Service (Front End)

Scope:

- Check, assess, validate the service requirement- Ascertain commercial and technical viability, and operational feasibility- Check for submission of any document, or goods, which may be mandatory for

services.-


• Pre-Service (Back End)

Scope:

- Inspect all submissions from all points of view- In doubt, clarify and ascertain- Issue service job identity for record, communication, and for reference at a later

date.- Update customer database with this service job identity

• Service (Back End)

Scope:

- Conducting the customer and/or the goods for service after execution.- Execute all necessary transactions, which are part of service process.- Collect transaction results and update the records for reporting- Produce and/or display documents- Collect relevant data for computing cost of service- Close the service process and obtain an acknowledgment of service completion

satisfaction of the customer

• Post-Service (Back End)

Scope:

- Collect feedback on service experience, suggestions if any.- Bill the customer for services availed.- Process payment as per terms of services- up-date customer record, job record, and other information databases- Generate a report for examination to close the service offer.


• Back Office Applications

1. Core Applications

- Manpower and personnel planning- Payroll and the employee related applications- Hospital billing and recovery- An inventory control-procurement, planning and control. The expiry data

management.- Financial accounting, Capital budgeting and expense control- Maintenance of the service facilities.- Resource utilization and analysis.

2. Critical Control Applications

- Patients waiting time and service cycle- Non use of critical resources- Stock outs of the critical drugs, and the time taken to restore supply- The number of patients admitted, treated and cured. Length of the stay, cost and- avenue to the hospital- New trends in the service demands and the service performance in such cases.- Analysis of the delays in terms of duration and causes.- The number of patients turned down or sent to the other hospitals for want of

facilities –analysis and causes.


MIS applications in Service Industry:

1) Airlines- The operative functions of Airlines are to move people and goods from one

Location to the other safely on time.

- The MIS applications in the Airlines industry would be towards supporting all decisions which affect the objective of offering a distinctive service to the customers having different expectations and perceptions.

- The service goals could be:- One complaint per 100000 passengers- 95 percent occupancy to conclude that the schedules are convenient- Throughput time, check in to check out, is less than 10 minutes.

1. Passenger information

- The type, class and purpose of travel- The socio-economic group- The duration of stay at the destination- The food and eating habits- The language and communications needs- The expectations on the service before and after the journey- The traffic flow between the towns, cities and countries.

2. Information on the Aviation industry

- The best service package for a distinctive service would fail in implementation, If the safety, security and availability of planes is doubtful.

- The MIS would help in the perspective planning, and strategy formulations which would support the implementation of the plan framed for offering a distinctive service.


2) Hotels- Hotel is a place where people look for a distinctive service.- The concept of hotel as a place of stay, when you are out station has undergone

a change due to number of reasons- The transition has taken place from convenience to comfort, comfort to

enjoyment, enjoyment to total service

1. Keep track of the customer profile

- Type of the customer- The nature or purpose of visit- The duration of stay- The service demanded- The socio-economic class of the customer- The religion, the language and the culture of the religion

2. Monitoring Occupancy level

- It is necessary to control the occupancy at a high level. The MIS should provide the information on a high or low, and the reasons thereof.

3. Project future needs

- The MIS should provide information on new needs which are emerging in the foreseeable future.

4. Monitor the level of expectations

- The customer expectations on the service level norm differ from class to class and service to service.

5. Monitor the communication needs

- The communication makes interaction with the customer a comfortable exercise. It is necessary to upgrade the knowledge and skills of the employees to fulfill the changing needs of the customer.

6. Customer database

- Most of the good hotels create a customer database for handling a variety of applications.

- Most of the MIS systems in a hotel are managed as front end and back office systems.


3)Hospital- The role of a hospital in today’s world has changed from the medical and clinical

Assistances to health care with a concern for the people who need it.

• Front end applications

1. Patient Database

- To handle the queries on the existing patients and the patients treated and discharged...

2. Medical server database

- Name, addresses, telephones, etc. of all medical staff including Doctors, Nurses, Technicians. Holidays, work times and locations on weekdays for contact.

- Important service centers in the town where support services can be obtained in emergency.

3. Resource planning and control

- An online query facility to answer the number of queries on the availability, scheduling and rescheduling of the resources and the facilities.

4. Medical case history database

- Knowledge database on the case history for the guidance and research- Monitoring the effect of drugs to judge the efficacy in terms of the patient’s

response.- Analyze the health care demand and make planning for the health service

strategy.
