Misdec 205


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  • Misdec 205

    1. 1. MANAGEMENT INFORMATION & CONTROL SYSTEM CONCEPT OF MIS : Initial Concept was to process data & present it in the form of reports at regular intervals. Concept was modified with distinction made between Data & Information. Concept is similar to Raw Material (Input) & Finished Product (Output) System Concept of MIS. Another Concept is : Data is one but can be viewed by different people in different ways. Concept of Database & The MIS based on the Database is more effective. 1
    2. 2.  Gradually the concept of End User Computing using Multiple Database emerged this give Decentralisation of MIS System. Analysis of Data relies on many academic discipline. This includes : Operation Research / ManagementAccounting / Human Behaviour / Psychology etc. makingMIS more meaningful . The academic disciplines are used in designing the MIS. The Foundation of MIS is the Principles of Management & its Practice. The concept therefore is a blend of Principles, Theories & Practices of the Management, Information & Systems. 2
    3. 3.  DEFINITION OF MIS : MIS can be defined as a system that3) Provides information to Support Managerial Functions like Planning, Organising, Directing, Controlling etc.4) Collects information in a systematic & routine manner which is in accordance with a well defined set rules.5) Includes Files, Hardware, Software & Operation Research Models & Process, Storing, Retrieving & Transmitting information to users. MIS has more than one definition : • A system which provides information support to the 3 organisation.
    4. 4. • A system based on the Database of the organisationevolved for the purpose of providing information to thepeople of the organisation.• It is a computer based information system. All above definitions converge to one single point : The MIS is a system to Support The Decision Making Function in the Organisation. 4
    5. 5.  ROLE OF MIS IN AN ORGANISATION : Role of MIS can be compared to the Role of Heart in the Body. Ensures appropriate data is collected from the various sources, process & sent to all the needy destinations. The system is expected to fulfill information needs of an individual, group of individual, the various management levels. The MIS satisfies the diversified need : Through variety of systems, such as: - Query Systems - Analysis Systems - Modelling Systems - Decision Support Systems 5
    6. 6.  MIS helps in Strategic Planning, Management Controls, Operational Controls, Transaction Processing etc. MIS helps in Transaction Processing & answers their Queries on the Data pertaining to the Transaction, Status of a particular record & reference on variety of documents. MIS helps Junior Management, by providing Operational Data for Planning, Scheduled & Control & helps further in decision making at the Operational Level. 6
    7. 7.  MIS helps Middle Management in Short Term Planning, Target Setting & Controlling the Business Functions. MIS helps Top Management in Goal Setting, Strategic Planning & Evolving Business Plans & their Implementation. MIS plays the Role of Information Generation, Communication, Problem Identification & Decision Making. Thus MIS plays a vital role in the Management, Administration & Operations in the organisation. 7
    8. 8.  IMPACT OF MIS : MIS impacts organisations functions, performance & productivity. With proper MIS support, the Management of Marketing, Finance, Production & Operation & Personnel becomes more effective. MIS calls for systematisation of Business Operation for effective system design. This leads to streamlining the operation improves administration by bringing in discipline as everybody is required to follow & use systems & procedure. Helps the organisation towards Process Driven & 8 Not Person Dependent.
    9. 9.  Brings in High degree of professionalism in Business operations. A well designed MIS with a focus on the Manager makes an impact on the managerial efficiency & motivates him to resort to such exercises as Experimentation & Modelling. The use of computers enables the Manager to use tools & techniques which are impossible to use manually. Example : Forecasting New trains (Rly Traffic Mgt). MIS works on the basic systems such as Transaction Processing & Database to transfer the drudgery of clerical work to a computerised system. 9
    10. 10.  Wastage of Time in Searching, Processing, Communicating is eliminated. MIS reduces overhead & creates information based culture in the organisation. MIS & COMPUTER : Transforming the concept of MIS to reality is possible only with Computer. Variety of HW Technology enables designing of MIS to specific situation. Example : Organisation with multiple locations use satellite communication over long distance. 10
    11. 11.  Ability of H/W to store Huge Data, Process at High Speed converting to information & Easy Access, Sort & Merge data in a particular manner, Complex, lengthy Analysis – done very effectively. Computer is capable of digital, graphic, word, image processing etc. so it is used to generate information & present in a easily understandable form (Bar Chart, PIE Chart etc.) Computer provides security of information (R/W, Read only, Access Control etc.) so it provides safe handling of sensitive information. 11
    12. 12.  S/W is an Integral Part of MIS & with development of ICT (Information & Communication Technology) has made distance, speed, volume & complex computing an easy task. Application of Management Principles in todayscomplex business world is possible only when MIS isbased on a Computer System Support. MIS & ACADEMICS : MIS draws a lot of support from other academic disciplines. Foundation of MIS is Management Theory. MIS uses Principles of Management Designing the system & gives due regard to organisational behaviour. 12
    13. 13.  While designing the MIS report format & forming communication channel, MIS takes into account behaviour of the manager as an individual & in a group. MIS gives due regard to personal factors such as BIAS, Thinking with a Fixed Frame of Mind, Risk Aversion, Strength & Weakness. MIS is a decision support system & uses other areas of academics such as : - - Operations Research - Queing Theory - ERP - Network Theory etc. used for planning - Controlling Large Project. 13
    14. 14.  Application of PERT/CPM to a project planning & monitoring is possible through computer system easily. While designing the MIS reports, attention is paid to avoid noise, distortion related to information. MIS relies heavily on decision theory & decision methodology. Example : (Payoff Matrix) MIS handles, with Mathematical Modelling Techniques, decision making under risk & uncertainty. In the area of Accounting applications, MIS uses accounting principles & ensures data is correct & valid. 14
    15. 15. Example : It uses principles of double entry in bookkeeping for balancing the accounts – It uses accountingmethodology for generating trial balance, balance sheet &other books of accounts. MIS uses knowledge from Management, Business Management, Mathematics, Accounting,Psychology, Communication Theory, OperationsResearch, Probability Theory, etc. for buildingprocess, methods & DSS systems in designingbusiness applications. 15
    16. 16.  MIS & THE USER : Every person in the organisation is user of MIS & different category of users have different information needs. Each level of user has a specific task or role & corresponding informations need. Example : Need of information of a Clerk, Executive, Manager (Operational, Middle or Top Level). It is observed that at lower level, MIS gives a sense of insecurity. MIS takes away the drudgery of repetitive search, collection, preparing statements & submitting to higher level. 16
    17. 17.  Work vacuum so created is not easily filed up. Thus crating a sense of insecurity & loss of importance of the person. Positive aspect is clerk can make a quick search. At the level of an Officer/Executive of MIS does therole of Data Analysis in a predetermined manager. This means knowledge of business is transferred from an individual to the MIS & made available to all in the organisation. Concept of information is power with individual is Lost. 17
    18. 18.  The Psychological impact is higher, if the person is not able to cope up with change by expanding or enriching his job. The Middle Level Manager or Top Level Suffers the fear of challenge & exposure. The MIS makes his computer more effective. He is afraid of his position, decision & defence will be challenged. However above negative points are seen in fewcases & the positive impact at all levels are theybecome more effective operators. 18
    19. 19. Through the MIS, the information can be used as a strategic weapon by the user to counter the threatsin business & make business more competitive, bringabout organisational transformation through integratedapproach. A good MIS makes organisation seamless by removing communication barrier. PROCESS OF MANAGEMENT & MIS AS A TOOL FOR THE MANAGEMENT PROCESS : Process of management starts with setting of Goals, Objectives & Targets. GOALS : Are long term objectives to be achieved by the organisation. 19
    20. 20.  OBJECTIVES : Are relatively short term milestones to be accomplished. TARGETS : Generally refer to physical achievements in the organisations business. Goals, Objective & Targets are so set that they are consistent with each other & help to achieve each other. PROCESS OF MANAGEMENT :1. PLANNING : Basic to all management functions. It is a decision making process determining in advance, What to do, How to do, When to do, Who has to do? 20
    21. 21.  Efficiency of planning is measured by the amount it contributes towards achievement of goals, with less investment or with less resources. (This is managerial effectiveness) “MIS helps the Manager in Planning Process”2. ORGANISING : Important step in the management it relates to the people in the organisation. It deals with qualitative & quantitative role play, relationship etc. Organising Involves:- - Defining various Management Levels & Span of control. - Defining Departments. 21
    22. 22. - Relationship of Line & Staff Function. - Delegation of Authority.3. STAFFING : Deals with creation of HR in the enterprise to achieve goals, objectives & targets set by the management.4. CO-ORDINATING & DIRECTING : After organising the resource, staffing planning, the process of implementing is dynamic. The process meets with a number of difficulties & the Manager is supposed to resolve them. There will be LAG & LEAD in many activities. There could be short fall & over runs. There could be sudden developments, which may disturb the plans & Process of implementation. 22
    23. 23.  Managers role in this situation is to co-ordinate all the activities & provide leadership in the group to keep the Plan Moving. “MIS plays a major role in this Management Process”5. CONTROLLING : The last but the most important step in Management Process. Control system works on the principle of feedback. With advanced ICT, a variety of planning & control tools have been developed. 23
    24. 24.  MIS AS A TOOL FOR MANAGEMENT PROCESS : The various processes of management require lot of data & information. The requirement arises due to the fact that each step of management , variety of decisions are taken to correct the course development. The decisions or actions are prompted by the feedback given by the control system of MIS. The control of overall performance is made possible by way of budget summary & MIS report. The MIS report showing sales, expenditure, ROI etc. Throws light on the direction the organisation is moving. 24
    25. 25.  Exception reports identify weakness in the management system. If effective management system is to be assured it has to be based on PROMPT business information. Management performance improves in the business risks & uncertainties are handled effectively withadequate information. A good MIS provides information to the managers to expand their knowledge base. He must know the adverse trends in business, the shortfalls of failures in the management process. A good MIS highlights the critical success factors & supports key areas of management. 25
    26. 26. Modern fiercely competitive business scenarioneeds handling of business operations with skills & foresight to avert crisis & relies heavily on MIS. ORGANISATION AS A SYSTEM & MIS : A system is an assembly of elements arranged in a logical order to achieve certain objectives. Organisation is viewed as a socio technical system consisting of sub system of people, task, technology, culture & structure. Organisation continuously exchange information with environment & is influenced by the changes. Accordingly organisation has to be built in such a fashion that it adjusts with changes in environment & the goals & objectives are satisfied – OPEN SYSTEM. 26
    27. 27. MIS should be designed viewing the organisation as a system. MIS should give due importance to the human side of the organisation & its culture. Task & technology are physical aspects of the organisation but culture & people are very difficult to assess from MIS design point of view. MIS & ORGANISATION : In a vertical structure with high degree of centralisation, MIS should give control information to the higher management where decision is centred. If the organisation structure is based on a functional basis (Horizontal span of control, where functional head is key decision maker & all functions are equally importance than MIS will have a functional design with information support to functional head. 27
    29. 29. STRATEGIC MANAGEMENT OF BUSINESS & MIS CONCEPT OF CORPORATE PLANNING : Plan is a predetermined course of action to be taken in future. Goals & objectives that a plan is supposed to achieve are the pre-requisites of a plan & setting of goals & objectives are primary task of management. Planning is a dynamic process involving chain of decisions. Essence of planning is to see the opportunities & threatsin future & predetermine course of action to convert opportunity to business gain & meet the threat to avoid29
    30. 30.  Planning can be Long Range or Short Range. Long Range Planning : Is for 5 years or more. Deals with growth, Rate of growth & Image business share etc. Short Range Planning : Is for 1 year at the most. Concerned with attainment of the business result for the year. Goals relate to long term planning. Objectives relate to short term planning. “Corporate Business Planning deals with Corporate Business Goals & Objectives”. 30
    31. 31.  Corporate plan considers the world trends in the business, the industry, the technology, the international markets, the competitors, the corporate strength & weakness etc. & is a complex exercise to steer the company through difficulties, uncertainties etc. ESSENTIALITY OF STRATEGIC PLANNING : Why strategic planning?7. Market Forces8. Technological Change9. Complex Diversity of Business10. Competition11. Environment (Threats, Challenges, Opportunities) 31
    32. 32. • Market Forces : Unpredictable demand & supply / trends in market growth / consumer behaviour & choices / new products & concepts - The Market force effect sales, growth & profitability. - A proper business plan is needed to counter these.2. Technological Changes : New technology worldwide have threatened current business creating new opportunities. Example : Electronics Industry. - Absence of a corporate plan, such new technology change can bring about threats of survival or loss of opportunity. 32
    33. 33. 3. Complex, Diversity of Business : The scope of business is wide & the variety of products, different market segments, manufacturing methods, multiple locations, dependence on external factors such as transport etc. bring complexity in the management of business. Many factors are uncontrollable & unless there is a plan, considering above diversity, management lead to loss of business opportunity.4. Competition : This is a natural phenomenon in business & management should continuously evolve new strategies to deal with competition.5. Environment : This is beyond the control of management forecasting probable environmental changes is a major task of corporate planning. 33
    34. 34. DEVELOPMENT OF BUSINESS STRATEGY LONG RANGE STRATEGY : Like any other business activity, planning also has a process & methodology. Corporate planning is a top management responsibility. * It starts with social responsibility - Spells out business mission & goals, - & Strategies to achieve them.STEP –1 : Communicate to all, the social & economic responsibility of the organisation (Mission Statement) : Direction of the organisation – decides scope & boundary of the business. 34
    35. 35. STEP – 2 : Set goals of the organisation. The goal is more specific & time span of 3-5 years. Describes certain business aspects such as : Largest market share / Leader in industry / Dominent in some product / Service / Reach & distribution etc. Goals become a reference for top management in planning the business activities. STEP – 3 : Set various objectives of the organisation objectives are are defined in terms of business results to be achieved in a short duration of a year or two. Objectives are measurable & can be monitored (Profitability, Sales, Quality Standard, CapacityUtilisation etc.) When achieved, objectives will contribute to 35he accomplishment of goals & subsequent mission.
    36. 36. STEP – 4 : Set Targets : for more detailed working &reference for operations. The success in achieving the goals & objectives is directlydependant on the management business strategies. Business is like a war where two or more competitors areset against each other to win & are constantly in search of astrategy to win. “It enabled MIS is a strategic business weapon forgrowth & survival”. Strategy means : The manner in which the resources(Man, Material, Money) & the know how will be put to useover a period to achieve goals. “The game is to evolve strategies & counter strategies & counter strategies to win”. 36
    37. 37.  STRATEGY FORMULATION : Strategy formulation is an unstructured exercise ofcomplex nature riddled with uncertainties. TYPES OF STRATEGIES : A strategy means a specific decision(s) regardingdeployment of resources to achieve the missions orgoals of the organisation. Strategy can be classified into four broad classes : - 1. Overall company strategy : Very long term & deals with overall strength on organisation. 2. Growth Strategy : May be for existing business or diversification. 3. Product Strategy : Choice of a product which can expand as a family of products. 37
    38. 38. 4. Market Strategy : Deal with distribution / Services / Market Research / Pricing / Advertising / Packing or Choice of Market Itself. - There are no way of predicating selection of correct strategy – only results can prove. TOOLS OF PLANNING : Are tools of decision making with reference to planning. These tolls systems approach, sensitivity analysis & modelling. MIS & BUSINESS PLANNING : 1. Decide goals & objectives. 2. Determine correct status of business & projects. 3. Provide correct focus for management action attention. 38
    39. 39. 4. Evolve, Decide the Mix of Strategies.5. Evaluate Performance & Give Feedback.6. Provide Cost / Benefit Evaluation.7. Generate Standards / Norms / Ratio’s / Yardstick for Measurement & Control. SHORT RANGE PLANNING : Short Range Planning deals with targets & objectives of the organization & provides implementation plan. Plans are made for one year in terms of TARGETS to be achieved within a BUDGET. A manufacturing co. will make targets for production, sales, capacity etc. 39
    40. 40.  Budget gives details of resources required to achieve target. Budgets are prepared first in terms of PHYSICAL UNITS & then converted into financial units. Companies prepare budgets for sales, production, revenue expenses, capital expense, raw material, advertisement etc. 40
    42. 42. BASIC OF MIS DECISION MAKING CONCEPTS: It is a fixed intention to bringing to a conclusive result, A judgement ! Decision making is a complex process in the higher management level due to the interrelationship among decision makers, a job responsibility, question of feasibility, code of morals, ethics etc. Rational decision is one which effectively ensures achievement of goals for which the decision was taken. 42
    43. 43.  DECISION MAKING PROCES INTELLIGENCE (1) Recognition that problem must be solved / opportunity to be exploited – Gather Data DESIGN (2) Understand the problem / generate solutions CHOICE (3) Choice made & ImplementedHERBERT SIMON MODEL• INTELLIGENCE : Raw Data collected processed & examined.• DESIGN : Inventing, Developing & Analysing the different decision alternatives.• CHOICE : Select one alternative as a decision, based on selection criteria. 43
    44. 44.  In the design phase, mgr. Develops a model of the problem situation & generates & tests different decisions. In the choice phase, mgr. Evolves a selection criteria such as max. profit, least cost etc. The criteria is applied to various alternatives& the one which satisfies most is selected. In these three steps, if the MGR. Fails to reach a decision. The process is repeated. MIS achieves this efficiently WITHOUT REPEATED use of Simon Model Ex : A manufacturing plant with underutilized capacity & products not contributing to profit – Identified Prob Find product mix for manufacturing plant to fully utilize WITHIN the raw material & market constraints & profit maximize. 44
    45. 45. -This is a problem of optimization & use Linear Programming (LP) model.-Model evolves various solutions / decision alternatives.-Choice is made based on first feasibility & then on basis on maximum profit. DECISION MAKING SYSTEMS - If the decision is to be taken in a KNOWN ENVIRONMENT, it is a CLOSED DECISION making system. Ex: A manufacturing product mix problem. - If the MGR. Operates in an UNKOWN environment, it is a OPEN DECISION system. Ex : Deciding pricing of new product / plant location etc. - MIS tries to CONVERT OPEN SYSTEM to CLOSED system by providing information. 45
    46. 46. INFORMATIONINFORMATION CONCEPT:- Information differs from data. Information has a value in decision making – while data does not have. Information Characteristics:-• Improves representation of an entity.• Updates knowledge level (Ex: Sales Data)• Reduces uncertainty• Aids in decision making. Ex: Sales Data progressively become information when processed with other data such as target. 46
    47. 47. Conceptual model of communication:- Transmitter Receiver Source Channel Destination Encoder De-coder(Data / (MIS) (Reports) (Interprete) (MGMT.)Information) Noise Distortion Poor Quality of Creates Information Confusion (ABOVE MODEL OF COMMUNICATION USED IN MIS) 47
    48. 48.  Information Presentation:- Improve communication through summarization. Improve by message routing copies of circular. Curb misuse of information by exercising control on the content & distribution. Information BIAS: Should not be biased while classifying & filtering / Communicating information. BIAS enters because people try to block sensitive information. To overcome this, a formal organization structure & top management decides information type / received. 48
    49. 49.  Way information is presented, may create BIAS. Ex: If information is presented in alphabetic order & it is lengthy. INFORMATION : A QUALITY PRODUCT Information is a product of data processing. Quality of information can be measured on four dimensions: (1) Utility (2) Satisfaction (3) BIAS (4) Error.1. UTILITY: Has four facets : (1) Form (2) Time (3) Access (4) Possession.2. SATISFACTION OF USER: Is a common key of measuring utility.3. ERROR: Error creeps in due to  Incorrect data & collection method. 49
    50. 50.  Incorrect data processing.  Loss or Incomplete data.  Poor data validation or control.  Deliberate falsification. Processing or data to information should be allowed only after thorough validation.4. BIAS: If the information is processed out of biased data, it will have BIAS. PARAMETERS OF QUALITY OF INFORMATION8. Impartiality : No BIAS 509. Validity
    51. 51. 3. Reliability4. Consistency : Data should have consistent5. Age : If the information is old, it is not useful today. CLASSIFICATION OF INFORMATION: Action vs. No. of action information:- Ex: “No stock” report calls for purchase action.2. Recurring vs. non Recurring information:- Ex: Monthly sales report vs. market study information. Internal vs. External information:- Ex:-Information generated through internal resources vs. information generated through govt. report. Planning information: Ex: Needs norms/ standards / specs. 51
    52. 52. • Control Information:- Ex:Reports giving status of activity with feed back mechanism.• Knowledge information:- Ex: Collection of information through library reports / research studies to build up a knowledge base for decision making. Information can also be classified BASED ON USAGE:-  Organization information:- Used by all in organization.  Database information :- When multiple use & apply.  Operational / Functional information:- When the information is used for operations. 52
    53. 53. EXTERNAL LOW Top SOURCE OF Management STRUCTURED INFO INFORMATION Middle Management Operational Management HIGHINTERNAL 53
    54. 54. METHODS OF DATA & INFORMATIONCOLLECTION:- Choice of methods have an impact on quality of information. Methods of data collection & processing is part of MIS. Methods of Data & Information Collection • Observation: = This methods are chosen for data & information collection & specific problem. = Remaining are routine methods particularly irrespective of a problem. Ex:Visit customer to assess complaint. • Experiment: Ex:Assess market response to new packaging. (Thru test marketing) 54
    55. 55. • Survey: Ex: Market survey, opinion poll.• Subjective Estimation:Ex: Data pertaining to future like life style in 21st Century/ Future of alternative energy source.• Transaction Processing: Ex:Ledgers, Payroll, sales report etc.• Purchased from outside: Ex:Database on specific subject, research study etc.• Publication: Ex: Corporate publication, industry publication, NCAER report.• Government Agencies: Ex: RBI, tax publications etc. 55
    56. 56.  Human Being as Information Processor :  An experienced Manager is a skillful information processor & able to decide.  While processing, manager also uses knowledge from his memory.  Filtering is a process whereby manager selectively accepts input. BRAIN Use of Stored Knowledge & Experience APPLICATION OUT PUT INPUT FILTERING MENTAL SELECTION DECISION FROM & PROCESSING MANI ACTIONEYES, EARS BLOCKING PULATION REGISTRATION GENERALISED MODEL OF INFORMATION PROCESSOR 56
    57. 57.  Filtering process blocks the unwanted or inconsistent Data which does not match the requirement. An inexperienced Manager may Omit Data, Distort Data. The information processor establishes filter based on experience. MIS & THE INFORMATION CONCEPT: Goal of MIS : should be a provide information which has a surprise value & reduces uncertainty. Build knowledge base in the organisation by processing various Data from different source. Design of MIS should take care of DATA PROB Knowing that it may contain BIAS & ERROR., with help of validation, checking, controlling procedure in the manual & computerised system. 57
    58. 58.  While designing MIS, due regard should be given to the Communication Theory of transmission. Special care is needed to handle noise & distortion Principles of summarisation & classification should be carefully applied giving regard to management levels. Care should be taken in the process that no information is suppressed or over emphasised. MIS should provide specific attention to quality parameters. MIS should make a distinction between different kind of information. (Action vs No-Action etc.) MIS needs to give due regard to the information used for planning, controlling etc. MIS should recognize some aspects of Human Capabilities since decision makers are human. 58
    59. 59.  MIS design should meet the needs of the total organisation - For design consideration, it is divided into top, middle, supervisory & operational. MIS design should ensure input data quality by controlling data for validation, reliability, consistency etc. Recognising information may be misused, if falls in wrong hands, MIS design should have feature of filtering, blocking, suppression, delayed delivered etc. 59
    60. 60. Use of MIS Value of Information Top Goal Setting Policy Making Very High, Meeting High Chief Accur Risk & Uncertainty Situation Executi Strategic Planning ate Un- ve & Futuri structu Board stic red Exception, Middle Decision Making Precise, Adhoc, Division, Problems Solving Analytical Unformatted, Monitoring & Achieving Decision High, Meeting Risky Department , Regular But Business Planning & Oriented, Related Situation Product Modified Managers Schedule to Past, Current Frequent, Future Display & Print Supervisory Jr. Problem Processed & Low, Meeting Given at Fixed Managers, Supervisors, Solving & Summarized and Near Certainty Interval Display & Officers Meeting Classified for the Current Situation Print Targets Period To Know Lowest the Status Facts Operational Assistants, Detailed Relating To Large Volume Print Clerks Current PeriodLevels of Management Nature of Information Reporting Media andOrganisational Pyramid Information Concept Structure 60
    61. 61. SYSTEMS (Systems & Procedure Systems Manual) (DBMS/DSS/SAD are part of MIS handled by S/Weapon) System Concepts: System is a set of elements arranged in an orderly manner to accomplish an objectiveEx: Systems Elements Objective6. Computer - I/O, Processor - Process Data & O/S, DBMS etc. Provide Information2. Business - People, Plant, - Produce Goods & Organisation Machinery, Services to Achieve Material, Money etc. Business Objective A system is arranged with some logic governed by rules, regulations, policies. INPUT PROCESS OUTPUT (Three Basic Parts of System) 61
    62. 62.  A system may have single input & multiple output or may have several inputs & outputs. Ex: A business system has several inputs & multiple objectives such as sales, profit growth service etc. All systems operate in an environment. The environment may influence the design of system. When a system is designed for achieving some objectives, IT automatically sets boundaries for itself. If new objectives are introduced, it may not function. Ex: A computer system designed for commercial data processing cannot achieve designing graphics, drafting, since system elements & boundaries do not permit. Ex: A business enterprise with profit objective cannot function of a objectives becomes social respect job providing) 62
    63. 63. ENVIRONMENT PROCESS PROCESS OUTPUT FILTER Systems are designed for specific objective/output, so the designer puts a filter around the system to control the influence on the system. Ex: A MFG. System with objective to produce desired quality so QC system vs filter. 63
    64. 64.  SYSTEM CONTROL: Most important part of a system. Systems are designed for achieving specific objective & this achievement is ensured through system control, which becomes integral part of system design. ‘SENSOR’ measures ‘OUTPUT’ or achievement ‘STANDARD’, through ‘COMPARISON UNIT’. ‘FEEDBACK’ is result of ‘COMPARISON’ of ‘OUTPUT’ with ‘STANDARD’ If ‘FEEDBACK’ is positive, system continues processing. If ‘OUTPUT’ is not OK with STANDARD, then feedback is provided to stop system. 64
    65. 65. INPUT PROCESS INPUT (Control) SENOR CORRECTIVE (Feedback) COMPARISON UNIT UNIT CONTROL SYSTEM MODEL STANDARD ‘CONTROL’ is the process of measuring OUTPUT, COMPARING with STANDARD, sending signal to CORRECTIVE unit which takes action. A system designed for specific objective without any control will perform disorderly. 65
    66. 66.  MIS & SYSTEM CONTROL CONCEPT: Corrective unit in the MIS is the Manager or decision maker. Through a process of decision making, the Manager ‘CONTROLS’ the business system so that desired result is achieved. A business system will have corresponding management information system to help manager run the business system with necessary information feedback thereby enabling controlling (taking decisions for the organisation to resolve any out of line situation towards achieving the goal) the business operation to achieve the desired objective (output). 66
    67. 67. System Management Information Business System Components System Inputs Raw materials, plant and Transactions of purchase, production machinery, manufacturing, and sales, receipts and payments. selling arrangement, accounting Process Purchasing, manufacturing, Transaction processing and data selling, accounting. processing Outputs Quantity of production sales, Computation of production in numbers, stock, income and profit. sales in value, stocks in weight, income and profit in rupees. Sensor Profit Income less assigned cost. Comparison Expectation of profit vs actual Algebraic comparison module to compare Unit profit. income vs budgeted income, profit vs budgeted profit (standard). Standard Profit. Budgeted profits of various products. Feedback Balance Sheet. Exception reports after analysis showing products earning profit below the budget. Corrective unit Managing Director. Marketing Manager.Decision to correct Business decisions. Pricing, advertising and promotingthe situation decisions. Goals and Business goals and objectives. Provide that information which supports 67 objectives in achieving the MIS goals and objectives.90
    68. 68.  TYPES OF SYSTEM : A system is defined & determined by its boundaries & objectives. When many smaller systems together make a larger system, the smaller systems are subsystems. SUBSYSTEM SUBSYSTEM SUBSYSTEM 1 2 3MANUFACTURING QUALITY CONTROL MARKETING SUBSYSTEM IN SERIAL ORDER 68
    69. 69.  A large system is always complex & difficult to understand. So for understanding it, the system is split into smaller subsystems. HIERARCHIAL STRUCTURE : Can be viewed for most systems. Breaking the system in a hierarchical manner provides way to structured system analysis & gives clear understanding of the contribution of each subsystem in terms of data flow & decisions & it interface with other subsystems. (EX: Bill passing system) Part of system analysis & design. CATEGORY OF SYSTEMS : DTERMINISTIC SYSTEM : When inputs, process & output are known with certainty. EX : The accounting system. 69
    70. 70.  PROBABILISTC SYSTEM : When system output can be predicted in probabilistic terms. EX: Demand forecasting system. CLOSED SYSTEM : When system functions in isolation does not exchange with environment. EX : All kinds of accounting system, stock, attendance system etc. OPEN SYSTEM : If the system exchange with environment & influenced by IT. EX : Marketing, Communication, Forecasting System “Business organisations are open systems” “All open systems must have self organising ability & adjust to environmental changes”. Generally deterministic systems are closed systems & 70 probabilistic systems are open.
    71. 71.  Deterministic & closed systems are easy to computerise as they are based on facts & behaviour can be predicted with certainty. EX : Accounting, Invoicing Systems. Probabilistic & open systems are complex & calls for considerable checks & controls that system performance can be controlled. EX : Pricing systems are probabilistic open. They are so designed that external environment like Govt. policy on Tax, Excise supply position changes are taken care. HANDLING SYSTEM COMPLEXITY : Information systems are relatively complex as compared to physical system. To enable MIS DESIGNER to understand design, develop & implement, the complexity is handled by viewing the 71 system as assembly of subsystems.
    72. 72.  The subsystems are put in hierarchial order to provide a structural view to the designer. EX : Materials management system. Have following subsystems. (A) Procurement System (B) Purchase order follow-up System (C) Receipts accounting system (D) Material requirement planning system (E) Material issue requisition system (F) Bill payment system (G) Inventory control. Subsystems a re interconnected & each system inter connection acts as a channel for input output communication. 72
    73. 73. A C D F * B E G SUBSYSTEMS WITH INTER CONNECTIONS * F = Bill Payment SystemCollate Bill Collate Bill to Goods Compute Amt Prepare Cheque &To P/O Receipt Voucher Payable Payment Voucher Finance Acct.Bill Scrutiny Bill Booking Bill Scrutiny Audit Compute Taxes 73 with P/O Gross
    74. 74.  SYSTEM EFFICIENCY & EFFECTIVENESS : EFFICIENCY : Indicates the manner in which inputs are used by system i.e. right way. If the output/input ratio is adverse, it is inefficient. EFFECTIVENESS : Means producing the right output in terms of quantity & quality. When the system is ineffective, the system is out of control & need major correction. POST IMPLEMENTATION PROBLE IN A SYSTEM The MIS designer designs & develops & implements the information system within organisation. When systems are allowed to run for some time, they tend to become disorganised resulting in system inefficiency. The process of decay & its cause is called ‘ENTROPY’. 74
    75. 75.  The designer introduces a negative entropy (i.e action to arrest decay) & the system is brought back to normal state. This process is called system maintenance. Steps for providing negative entropy:- 1. Periodical review of system 2. User meeting to assess satisfaction / utility 3. Subjecting system to audit check through test data. EX: Of system maintenance System Indication of Entropy Negative Entropy1. Human Body - Loss of Weight / Headache -Medical checkup / DIET / Medicine2. DATA Processing - ERROR/OMISSION - Review & introduce in Data Entry Streaming Procedure3. Information - Decline in the Utility & - Reset Goals of Info. Processing Satisfaction, Changed System Modify/ADD Information need Revised System 75
    76. 76.  MIS & SYSTEM CONCEPT: MIS is a combination of data processing & information system in an orderly manner to support management. In achieving business objective. MIS boundary cross limits of organisation & draws data from external environment. MIS follows system model & works on the principle of feedback & control. MIS provides information of exceptional nature related to business. MIS initially concentrates on quality of input : Impartiality / validity / reliability / consistency & age. MIS provides a system for data processing & data analysis – uses operational research etc. 76
    77. 77.  MIS is a combination of deterministic & closed system & probabilistic & open system. Complexity of MIS is handled by simplifying the subsystem, decoupling etc. To arrest decaying of the system in post implementation stage, it is necessary to provide negative entropy to the system. A good MIS is founded on the indepth system analysis of the business & management process. Elements of MIS are computer hardware, communication channel, software, s/w tools, the development plan, well defined measure objective of MIS consistent to business objective. 77
    79. 79. SYSTEM ANALYSIS & DESIGN TYPES OF INFORMATION SYSTEMS : DATA Processing Systems : Focus is on computing existing Data. Transaction Processing Systems : Processing of transactions using stored data & business rules. Focus is non transaction execution. Functional Systems : Production, Sales, Finance function where several transaction & stored Data is used. Focus is on operation. Integrated System : More than one system is processed together to produce an updated status & business result. Focus is on process management across organisation. 79
    80. 80. 5. Enterprise Management System : It is a set of systems functioning in respective areas providing service inputs to other systems in the organisation. Focus is on decision support for strategic management to achieve enterprise goal & mission. The Need for System Analysis : For computerising an information system it is necessary to analyse the system from different angles. Analysis is the basic necessity for an efficient system design. Need for analysis arises from following : System Objective : It is necessary to define system objectives – (Purpose, business requirement etc.). System Boundaries : It is necessary to establish system boundaries which would define the scope & coverage of 80
    81. 81. 3. System Importance : Necessary to understand the importance of the system in the organisation it will help the designer to know the utility & decide design features of the system.• Nature of System : Analysis will help designer to know if it is open / close / determine / probabilistic.• Role of System as an interface : System may act as an interface to other systems. It is necessary to understand role of the system as an interface to safeguard interest of other system.• Participation of User : Strategic purpose of the system is to seek the acceptance of the people to a new development. System analysis process provides a sense of participation to the people & helps acceptance. 81
    82. 82. 7. Understanding Resource Needs : In terms of Hardware / Software & investment requirement for management to decide (BASEDON ROI).8. Assessment of Feasibility : Analysis of system helps to establish feasibility in terms of technical, economic & operations. Approach & Steps in System Analysis & Design : STEPS : -• Need for Information : Define Nature of information who needs – identify users & applications.• Define the System : Decide nature of system & its scope – helps determine benefits & complexity.• Feasibility : Technical success / economics viability – study investment (H/W, S/W).• Detailing Requirement : Identify strategic, functional & 82 operational information need.
    83. 83. 5. Conceptual System Design : Determine the inputs, process & outputs & design a conceptual model.6. Detailing the System Design : Draw the document flow charts & data flow diagrams, data & system hierarchy diagrams, mapping of data / information vs users7. Structuring the System Design : Break the system into hierarchial structure.8. Conceptual Model of Computer System : Define step by step usage of files, process & interface. Define the data structure & validation procedure.9. Break the System in Programme Modules : Make a physical conversion of the system into programme structure in a logical manner – modules will be data entry, validation, processing & storing. 83
    84. 84. 10. Develop Test Data to Check System Ability : Test the modules in terms of system integrity, input vs output.11. Install the System : Install on the H/W – Test, Run before users start using.12. Implementation : Train users / run paraliel / prepare user manual.13. Review & Maintenance : Review the system through audit trail & test data / confirm objectives MET / carry modification if necessary – helps to maintain system quality. System Analysis of Existing System : When objectives are finalised, the first step towards development is to analyse existing system. It helps to achieve * Understanding existing system & objectives. 84
    85. 85. * Are the information needs fully justified. If so, is the cost of system design compares ok with cost of increased value of information. * Evaluating the system for computersiation. Procedure for Analysing existing system : * Carryout analysis at a place where the system is functioning. * Note key persons who contribute to system operation. * Spend time with operating persons & observe the system to understand finer details Understand Scope of the system & its objective identify problems faced in the system. Collect all documents raised by the system & note who raises the DOC. & manner of distribution these DOC. Carries data from one point to other. 85
    86. 86.  Collect Outputs such as statements reports etc. Make list of rules, policies, guidelines etc. Note check points & controls used in system which ensures data flow is complete, processing is correct & analysis precise. Study the flow of data in the system. Make a system study note & discuss with head of deptt on your system understanding & view to ensure it is same with HOD’s Ascertain if he has any otherobjectives from the system. Examine feasibility of new objectives implementation. Draw a revised flow chart to indicate how the system runs the major steps of processing chart should indicate all modifications suggested & accepted. Discuss the flow chart with operating persons & explain the modified system. 86
    87. 87.  Make a list of outputs (Statement reports) containing information & have HOD’s approval. Analyse requirement of information from utility point of view. More information – higher the generation cost decide the utility based on value of information. Compare cost of old & new system & benefits offered. Obtain approval of the new system from the users & top management. Write a system manual for use of the people in the department & for reference to the other users of system. 87
    88. 88.  Prototyping is a critical step where user understands the system in initial stage & helps try out ideas. “Life cycle procedure is a tool for the system designer. Its meticulous following is a safe method to accomplishsystem objectives”. SYSTEM DEVELOPMENT MODEL For designing a good system, developers traditionally used the “WATERFALL MODEL”. Like Waterfall (Flows from top to bottom) the system development process moves from top to bottom in steps. Like water does not rise from a lower level to a higher level, it is presumed that once the step in a model is over, it is not required to go back. 88
    89. 89. MISSION & GOALS INFORMATION NEEDS SEPCIFICATION ANALYSIS SYSTEM DESIGN PROCESS DESIGN TESTING IMPLEMENTATION WATERFALL MODEL MAINTENANCE This model is OK where the system requirement specifications do not change frequently & minor changes can be taken care through small design changes. This model applies well to basic rule based data & information system. Example : Accounting, Materials, Production Planning, HR etc. 89
    90. 90.  SPIRAL MODEL : For system development Some systems are more dynamic & require changes in system requirement specification (SRS) frequently. These modifications are called versions of the basic model. A popular model developed by Boehm is a Spiral Model. A spiral model is useful for developing large systems where specifications cannot be finalised in one stroke completely & correctly. Some changes surface while using the system after testing. The new versions provide additional functionality, features & facilities to the user of the system i.e performance, response, security etc. The user wants a system to be user friendly reliable & effective – while the developer wants the system easy to modify, easy to understand portable & compatible with 90 other system.
    91. 91. SPIRAL MODELProcessed System D. Analysis Info. Need V1 V2 V3 Mission & Goals Testing Implementation Maintenance 91
    92. 92.  DEVELOPMENT OF MIS : Development of long range plans of the MIS: Any kind of business activity calls for long range plans for success. Same is true for MIS. In MIS, information is treated as a major resource like capital time & capacity. If this resource is to be managed well, it calls for management to plan & control it for appropriate use in the organisation. Unfortunately most organisation do not recognise information as a resource. It is treated as one of many necessities to conduct business. 92
    93. 93.  Many organisation have spent money on computers for data processing, filing returns / reports to Govt. used mainly for accounting & business transaction. As a result information processing function of computer never got importance. With advancement in computer technology (Communication / Storage / Intelligence etc.) computers an be used as a tool for information processing. We now a days need, a computer system flexible enough to deal with changing need of information. It should be designed as an open system continuously inter acting with business environment. The Plan of MIS is concurrent with the business plan of organisation. Management needs are transformed to information needs 93 for the designer to evolve a plan.
    94. 94.  CONTENTS OF THE MIS PLAN : A long range MIS plan provides direction for the development of the system & provides a basis for achieving the specific targets or tasks against a time frame. MIS plan is linked with business plan. The goals & objectives of MIS should be so stated that they can be measured. Typical statements are like :- - Provide online information on Stocks, Markets Accounts. - Query processing should not exceed more than 3 sec. - Focus of the system will be on the end user computing & access facilities. 94
    95. 95.  Business Plan vs MIS Plan : Business Goals & MIS Objectives in Line with Objective Business Objective Business Plan & Strategy Information Strategy Playing A Supportive Role Strategy Planning & Architecture of MIS to Decisions Support Decisions Management Plan for System Development Execution & Control Schedule, Matching Plan of Execution Operation Plan for H/W & S/W plan for for the Execution procurement and implementation 95
    96. 96.  STRATEGY FOR PLAN ACHIEVEMENT : Development Strategy An Online, Bath, Real Time System Development Approach to Development Strategy - Operational vs Functional - Accounting vs Analysis - Distributed vs Centralising - One Database vs Multiple Resource for System Inhouse vs Outsource Development - Customised Development vs Use of Package Man Power Composition Analyst, Programmer, Skills and Know How 96
    97. 97.  DETERMINING INFORMATION REQUIREMENT : Difficulties to determine correct & complete information due to: 1. Capability constraint of human being as information processor. 2. Nature & variety of information. 3. Reluctance of decision maker to spell out the information for behavioural reasons. 4. Ability of the decision maker to specify the information. Sole purpose of the MIS is to produce such information which will reduce uncertainty moment unknown becomes known, the decision makers job becomes simple. Inspite of above difficulties, methods have been evolved, 97 based on degree
    98. 98.  METHODS OF DETERMINING INFORMATION REQUIREMENTS : 1. Asking or Interviewing 2. Determining from existing system. 3. Analysing the critical success factors. 4. Experimentation & modelling.3. Asking or Interviewing : In this method, designer of MIS puts Q’s or converses with user of information & determine information need. Asking Q’s is an art & it should be used properly to seek information. The experts or experienced users are asked to give their best answers & this approach is called DELPHI Method. An experienced designer is able to analyse the answer for correct information need. 98
    99. 99. 2. Determine From Existing System : Systems from other companies can give additional information requirement. Text books, handbooks, has funds of knowledge for information requirement. EX: Accounting Information Requirement / Payroll / Accounts Payable / Inventory Control / Finance Accounting etc. Managers at middle & operating level mostly use the existing system as reference for determining information requirement. Where rules & regulations are laid down (by Govt. / Company Law Board for Share Market). 99
    100. 100. 3. Analysing the Critical Factors : Information requirement identified by critical success factor of an organisation. EX: Information requirement for management of technology in a high tech business. Information requirement for a service organisation where management of service becomes a critical factor. So the information requirement of such organisation largely depend on these critical factors. The analysis of these factors will determine the information need. 100
    101. 101. 4. Experimentation & Modelling : User resort to this method where there is total uncertainty experimentation would decide the methodology for handing complex situation. If the method is finalized, the information needs are determined. Sometime models are used to determine initial information need. The information requirement undergo qualitative change as the users get the benefit of learning. 101
    102. 102.  DEVELOPMENT & IMPLEMENTATION OF MIS : Having made the plan of MIS, the development call for determining the development strategy. Development strategy determines where to begin & in what sequence. PROTOTYPE APPROACH : When the system is complex, the development strategy is prototyping of the system. Prototyping is a process of progressively finding information need, developing methodology, trying out on a smaller scale with respect to data & complexity – Ensuring that it satisfies the user need & assess the problems of development & implementation. 102
    103. 103.  This process identifies the problem areas & inadequacies in the prototype & may call upon changing the prototype, requisitioning the information need & more user interaction. Designer task becomes difficult if multiple users of the same system & inputs they sue, are used by some other users as well. EX: A lot of input data comes from purchase deptt. which is used in accounts & inventory management. Attitude of various users & their role as the originators of the data needs high degree of positivism. 103
    104. 104.  LIFE CYCLE APPROACH : There are many systems or subsystems in MIS which have a life cycle – They are very much structured & rule based – they have 100% clarity of inputs & their sources, a definite set of output & these remain static for long time. Minor modifications occur but not significant in terms of handling either by the designer or user. Such systems can be developed in a systematic manner & reviewed after a year or two, for significant modification if Any. EX: Payroll, Share Accounting, Order Processing, Basic Accounting etc. Apart from core system, some decision support system can be developed through life cycle approach. 104
    107. 107.  COMPARISON OF PROTOTYPING & LIFE CYCLE APPROACH PROTOTYPING APPROACH LIFE CYCLE APPROACH1. Open System with High Degree of 1. Closed system with little or no Uncertainty about information need. uncertainty system has no change significantly for long time.2. Necessary to try out the ideas, 2. No need to try out the application Application & efficiency of the of the information as it is already Information as a decision support. proven.3. Necessary to control the cost of 3. Scope of the design & the design & development before the application is fully determined with Scope of the system & its application clarity and experimentation not is fully determined. Experimentation necessary. is necessary.4. User of the system wants to tryout 4. The user is confident & confirms the the system before the commits the Specifications & the information Specification & information needs. Requirement. 5. The system & application is universal5. The system & application is highly & governed by the principles & custom oriented. practices. 107
    108. 108.  IMPLEMENTING THE MIS : Implementation of the system is a management process. It brings about organisational change. It effects people & their work style. – The process evokes a behavioural response which could be either favourable or unfavourable depending on strategy of the system implementation. In the process of implementation, the designer acts as a change agent or catalyst for a successful implementation, he has to handle the human factors carefully. User has a fear of (1) Cultural Change. (2) Change in his role 108
    109. 109.  Guidelines for successful implementation of MIS :3. No question beyond the information need of user.4. Role is offering service : Not demanding.5. System Design is for User : Respect demand of user.6. Not to Mix Technical need with information need.7. Impress upon user the global nature of information system design which is required to meet current & future need.8. Impress upon user that quality of information depends on quality of input.9. Impress upon user that information is a corporate resource & he is expected to contribute to the development of MIS.10.Ensure user makes commitment to all the requirements of the system design specification. 109
    110. 110. 9. Ensure the overall management effort has management acceptance.10. Ensure user participation from time to time.11. Realise that user is the best guide for path of development.12. Do not expect perfect understanding & knowledge from the user as he may be user of non-computerised system.13. Impress upon user that change which is easily possible in manual system is not that simple in computerised system since program change required.14. Impress upon user that perfect information is non. Existent so he still has a important role.15. Ensure that organisational problems are resolved before system is taken for development. 110
    111. 111. 16. Conduct periodical user meetings on systems to understand difficulty faced by users.17. Train the user on computer appreciation “Implementation of MIS is a transformation”. Apply Lewin’s Model:7. Unfreeze the organisation for people to be receptive.8. Choose a course of action where process begins & reaches designed level. 111
    112. 112.  Factors Contributing to Failure of MIS : Many a times MIS is a failure. The common causes:-4. MIS is conceived as data processing & not information processing.5. MIS does not provide that information which is needed by managers.6. Underestimating complexity of business system & not recognising IT in MIS design.7. Adequate attention not given to quality control of inputs, the process & output leading to insufficient checks & controls in MIS.8. MIS is developed W/o streamlining the transaction processing systems in organisation.9. Lack of training & appreciation that user of information & generator of data are different. 112
    113. 113. 7. Lack of user friendliness & not meeting requirement of critical needs of user.8. A belief that computerised MIS can solve all the management problems of planning & control.9. Lack of administrative discipline in following the standardised systems & procedures, wrong codings, deviating, from system specification.“MIS does not give perfect information to all users in theorganisation Any attempt towards such a goal will beunsuccessful because every user has a human BIAS, certainassumptions, ingenuity etc. which is not known to thedesigner”. 113
    114. 114. APPLICATION OF MANAGEMENT INFORMATION SYSTEM Business application of MIS in functional areas ofmanufacturing sector: 1. Personnel Management 2. Financial Management 3. Production Management 4. Material Management 5. Marketing Management Business application services sector : 1. Hotels 2. Hospitals 3. Banking 4. Insurance 5. Utilities 114
    115. 115.  The approach to application development is on the basis of Database MIS model of an application considers transaction processing as a basis. Online transaction processing system develops data (OLTP) for DBMS & application development is based on such database. (Model of Information Processing System) A typical information system begins with OLTPsystem, uses RDBMS for creating database, 4GL forapplication development & SQL for querying & reportgeneration. The information system is designed on the principle of open system design, with flexibility & userfriendliness in mind. 115
    116. 116. A typical information system primarily serves theneeds at functional levels such as :- Personnel, Finance, Marketing, Production Materials, & Corporate Business Management. PERSONNEL MANAGEMENT: Objective:- Provide suitable manpower in number & with certain ability, skills, & knowledge as required by the organisation. Human resource information system (HRIS) is a system that support planning, control coordination, administration & management of human resource of the organisation. 116
    118. 118. Goal is to control personnel cost through improving manpower productivity. HRD though training & upgrading skills. Motivation though leadership & Job enrichment. Grievance Handling. Structuring the organisation. Input Transaction Documents : 1. Personnel Application Form 2. Appointment Letter 3. Attendance & Leave Record 4. Bio-data Self & Family 5. Appraisal Form 6. Production / Productivity Data on Job 7. Wage / Salary agreement 8. Record of complaint, Grievance, Accidents 118
    119. 119. 9. Industry data on wage / salary structure.10. Industry data on manpower, skills, qualification.11. Data on source of manpower : University / Institutions / Companies.12. Data on manpower utilisation trend in view of mechanisation, automation, computerisation. Applications Development Areas :- Accounting :- Following entities are considered. 1. Attendance 8. Bio-data 2. Manpower 9. Family Data 3. Leave 4. Salary Deductions 5. Accidents 6. Production Data 119 7. Skills
    120. 120. B. Query :- Personnel management has to query on:- 1. Who is who 2. No. of Persons with Persons with particular skill 3. Manpower Strength & profile of a division 4. Absenteeism / leave / late attendance 5. Salary / wage of employee 6. Personnel records queries are processed with employee number, skill code, department code etc.C. Analysis :- 1. Analysis of attendance & leave 2. Trend in leave record 3. Analysis of salary / wage structure 4. Analysis of over timeD. Control :- Projection of manpower need & recruitment plan / training programme preparation. 120
    121. 121. E. Reports :- Mainly used by personnel deptt. & top management / divisional heads. Statutory Repots :- By personnel function 1. Attendance Record 2. Strength of employee – By category: Permanent, Trainees, Apprentices. 3. PF / ESI 4. Accident Reports 5. Income Tax Form 6. Strength of Employee etc. Knowledge Update:- • Daily Attendance Report • Employee Strength • Joining & Transfer of Employees • Personnel cost by deptt., Job, Product • Periodic, Statement showing pers. cost, by salary / wages, overtime. 121
    122. 122. Operation Update:-1. Daily Attendance to plan workload2. O/T vs work completed3. Projected absenteeism & distribution of work load. Decision Analysis:-1. Analysis of attendance by season / festival & scheduling of jobs accordingly.2. O/T analysis by deptt. / employee & to decide strength of personnel.3. Analysis of accidents & decide safe measures Action Report:-1. Recruitment & additional manpower or subcontract2. Reduction/transfer/reorganising staff for cost control.3. Preparation of training & development programme. 122
    123. 123.  Most of these reports are used by operating managers. Information need at top management comes when issues of controlling wage bill, new wage agreement etc. come up. APPLICATION OF MIS Financial Management : Objective :- Primary objective is meeting the financial needs of the business by way of providing working capital & long term loans to run the business with the goal of containing cost of capital minimum. Meeting Statutory compliance by declaring audited financial results, return filing & tax to Govt. & meet obligations of share holders. 123
    124. 124.  In meeting these objective, financial management uses tools: Break even analysis, cost analysis, cash flow projections, ration analysis, capital budgeting & ROI Analysis, Financial Modelling, Management Accounting, Expense Analysis / Auditing & Control. Input Transaction Documents :- Payments:- To suppliers, employees, share holders, financial institutions. Receipts:- From customers,authorities financial institutions etc. Transactions are payments & receipts & they are documented through journal vouchers, receipts, debit notes, credit notes, transfer document. 124
    125. 125.  Applications :- Major application is the Financial Accounting system which accounts for the financial transactions of the company & produce financial results. The users are finance managers, cost controllers, auditors, top management etc. Accounting System : The system accounts for all money transactions related to sales, production, purchase, travel, share holding etc.1. Sales 8. Share Holders Fund 15. Budget2. Purchase 9. Income Tax 16. Fixed Assets3. Salary / Wages 10. Sales Tax4. Inventory 11. Excise Duty5. Expenses 12. Customs6. Capital Purchase 13. OCTROT7. Fixed Deposit 14. Consumption 125
    126. 126.  Query :- Query system gives debit or credit balance of an account. It shows details of transactions resulting in that balance. Queries are normally put to ascertain the business results by subsidiaries. EX: Query could be on sales w.r.t customer. Query could be on sales of the product. Decision Analysis :- Financial Management calls for a number of decisions, based on analysis of financial status of the company. The decisions are :- Borrowing of short term working capital, sources of finance analysis of debtor & creditor, capital budgeting, investment alternatives. 126
    127. 127. Applications which support above decisions:-2. Cash Flow Analysis3. Source & Use of Fund4. Debtors Analysis5. Creditors Analysis6. Budget Analysis7. Ratio Analysis8. Capital Budgeting & Ranking of Investment Alternative Control:- Controls are exercised based on exceptions (Budget / Plan vs Actual)11.Accounts Receivable12.Advance to Creditors13.Valuation of Inventory for Disposal14.Cost Over Run 12715.Shortage of Fund in Excess of Plan
    128. 128.  Reports :- Major reports are statutory compliance & operations update. 1. Tax Returns 2. Registers : Sales Tax, Excise, TDS 3. Declaration of Financial Results to Public 4. Annual Results to Board. Knowledge Update :- 1. Monthly Trail Balance 2. Balance Sheet 3. Profit & Loss A/C 4. Stock Valuation 5. Cash Position 6. Expenses on Major Accounts 7. Sales / Purchase by 128
    129. 129.  Operation Update :- 1. Filing of Statutory Returns 2. Statutory Payments : Advance Tax, Sales Tax / OCTROI 3. Report on Finished Goods / Despatch / Invoicing 4. Report on Material Receipt & Payment 5. Rent / Insurances Decision Analysis :- 1. Break even analysis for cost & price decision 2. ROI analysis 3. Analysis of current & fixed assets 4. Analysis of current liabilities 5. Analysis of overdue receivables 129
    130. 130.  Action Update :- Exception Reports for Implementation:3. Overdue Receivable – Legal Action / Termination of Contract4. Non-supply of goods & services – Legal Action / Revise Terms / Termination5. Poor Usage of Fixed Assets & Disposal6. Non-Moving Inventory Say: Y 2 Years.7. Evolving New Systems & Procedure to Control Expenses 130
    131. 131.  Production Management : Objective :- To provide manufacturing services to the organisation & involves manufacturing to certain specified quality & cost within stipulated time. Input Transaction Documents :-7. Production schedule 9. Material requisition8. Process planning sheet 10. Customer order9. Job card10.Job status advice11.Quality assurance rating form12.Finished goods advice13.Breakdown advice14.Material requirement 131
    132. 132.  Standards & norms are used for production rate, available capacity etc. Application :- Production Management is performed through production planning & control, bill of material processing, drawings & process planning, scheduling & monitoring systems. Accounting :- Production Management accounts for no. of entities such as:11.Quantity of Production over a time period12.Managerial Requirement & Usage13.Rejection Quantity14.Breakdowns 7. Machine Utilisation15.Labour Utilisation 8. Labour Hours16.Use of Power/Fuel/Consumables 132
    133. 133.  Query :- Relates to seeking status of job or information on machines, workers etc.  Status of Job Order  Production Program  Load on Machines  Status of Material  Information on Machines/Tools/Process etc. Decision Analysis:- Production Management function makes number of decisions. 1. Make or Buy or Subcontract 2. Alternative Material / Process 3. Product / Job MIX etc. Control :- Control through exceptional reports: 1. Excessive Rejection 4. Continued Break Down 2. Job Hold Up 5. Deviation From Standard 133 3. Excessive Inventory 6. Backlog
    134. 134. APPLICATION IN MANUFACTURING SECTOR: Marketing Management :- Satisfy customer scope of function : Identify need of needs customer, evolve product concept, designing & positioning the product & sell at appropriate price. Activities Involve:- 1. Market Research 2. Consumer Survey 3. Advertising, Sales Promotion 4. Stocking of Product, Development Dealer / Distributor network. Function has a very strong interface with production & Finance Deptt. Relies heavily on supply of Goods, Enough inventory. 134
    135. 135.  Input Transaction Documents:- Most Common2. Customer Order3. Order Acceptance4. Delivery Notes5. Invoice / Credit Note / Debit Notes. However, Marketing function needs lot of data which R not transaction based. EX: Market survey, Research, Production Journal Etc. Application :- Accounting:- Highly process oriented accounting application in marketing function. 11. Inventory10.Product Sale 6. Distributor 12. Receivable11.Product Family 7. Customer 13. Market Segment12.Sales Value 8. Excise Duty 14. Export Mkt.13.Sales Tax 9. Zone 15. Returns 13514.Dealer 10. Area 16. Complaints etc.
    136. 136. Query :- Queries in marketing management are on Customer, Product, Price, Stock, Sale, Statistics (Past) on Sale etc. Query can be on sales performance, comparison of customer groups, product group zones & areas, sales in relation to target, customer complaints, name & address of dealers / customers etc.Decision Analysis:- Decisions on pricing, allocation of stocks to orders, discounts commission etc. & most of these are rule based supported by DSS. Complex Decisions Are:- Price increase or decrease, deciding on a new product packaging, distribution, product positioning these decisions are of strategic nature. 136
    137. 137. Applications are developed to support thesedecisions :- Break even models, risk analysis mode,distribution model, network mode, product launch modeletc.from the basis for taking decisions. Consumer Industry have applications for information on customer preference, behaviour, response to Adv. campaign etc. Data is collected routinely to buildup independent data base on consumer profiles, product rating, buying decisions etc. Control :- In marketing management factors requiring control are sales vs target, marketing cost vs budgeted cost, actual sales vs competitors sales. Applications are developed to report the comparison. 137
    138. 138.  Reports :- In marketing management knowledge update reports are: 1. Product Sales Ledger 2. Sales Summary & Analysis 3. Market Analysis 4. Competition Analysis etc. These reports are based on summary of various entities such as orders, value, sales, stocks etc. Operations Update :- These reports inform the details of the marketing operations. A typical report will indicate daily orders received. Others are:- 1. Order Book 4. Invoice 2. Despatch Report 5. Customer Complaints etc. 3. Inventory 138
    139. 139.  Decision Analysis :- These reports convey if the desired / expected results are realised or not analysis of sales is necessary to confirm whether choice of alternative is correct or not. Action Update :- These reports will lead to such decision as price reduction withdrawal of product from market, changing the product position, allocating more budget for expenses. Example: of action update reports:- 1. Sales vs Target 2. Expense vs Sales 3. Stock vs Budgeted Stock Level 4. Complaints vs Number of Comp. Attended etc. 139
    140. 140.  Materials Management :- Input Transaction Documents:- 1. Purchase Requisition 2. Purchase Orders 3. Receipts of Goods 4. Return of Goods to Supplier 5. Issue for Production 6. Return from Production 7. Certification for Payment (Advice) Applications :- 1. Forecasting & Planning 6. Issuing Material 2. Procurement 7. Processing the Returns 3. Purchase Ordering 8. Bill Passing & Control 4. Goods Receipt 5. Inspection 140
    141. 141.  Accounting :- 1. Purchase Quantity 2. Issue Quantity 3. Stocks 4. Goods Returns 5. Rejections Query :- For Price, Supplier, Stock etc. Decision Analysis :- Majority of decisions centre around cost of material in a manufacturing operation. Decisions are related to price, stocking of items, reorder level, fixed order quantity etc. Control :- On capital blocked in inventory, stock out situation, reliability, dependability of supplier, cost of purchase. 141
    142. 142.  APPLICATIONS IN SERVICE SECTOR Unlike manufacturing, the service sector does not have physical good’s to be manufactured. MIS normally found in manufacturing will not be suitable for services industry. Mission in services industry is to provide most satisfying service to customer. Hotel Industry :- Service is the focus for Hotel Industry. MIS addresses the issue of assessing customer expectations. Information kept in customer data base are:- 1. Type of customer 4. Service Demanded 2. Purpose of visit 5. Country etc. 3. Duration of Stay - These information will help anticipate service expectations. Keeping Track of Customer Profile. 142
    143. 143. - Monitoring Occupancy Level - Project Future Needs - Monitor Level of Expectation - Monitor Communication Need - Customer Database. Hospital :- Health Care Industry. Front End Application :-4. Patient Data Base:- Handle query on the existing & patients treated earlier queries may be from visitor, doctor etc.6. Medical Server Database:- (1). Name, Address, Tel. No. of all medical staff, Holidays, Work Times. (2). Important Service Centres (Labs, Blood Bank, Special Clinics) 143
    144. 144. 3. Resource Planning & Control :- Online query facility on scheduling of resources & facilities. 4. Medical case history database. Back Office Applications:- 1. Core applications:- Manpower & personnel planning, Payroll & employee related processing, Financial Accounting, Resource Utilisation & Analysis, Inventory Control. 2. Clinical Control:- Stock out of drugs, patients waiting time & service cycle etc. Banking :- Is a place where financial service is offered. Customers choose a bank mainly on factors like: 1. Ease of Doing Business 2. Quality of Staff & Service 3. Range of Services 144
    145. 145. MIS design considers following:-2. Customer Database:- Customer, category, range of service, working HRS - Service depends on3. Service to Account Holders:- Non-moving A/C, A/C Having Balance Below Minimum, Default on Loan Payment.4. Service for Business Promotion:- MIS collects data for future business strategy for banker to go out for customer.5. Human Resource Upgrade:- MIS identifies needs for training of staff & customer orientation. Insurance :- (or Risk Management) Insurance covers, Risk of the Customer, Risk may cover ‘Life’, ‘Liability’, ‘Accident’, ‘Breakdown’ etc. & loss / Theft. 145