Management information systems


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  • Source:Stair,pp520. DPGoel,pp210.
  • Source: Stair,pp520.
  • Jawadekar,pp450-
  • Jawadekar,pp87
  • Source:Jawadekar,pp.86.
  • From DPG & Stair, Thomson Press
  • Management information systems

    1. 1. CHAPTER -1
    2. 2. System • A System may be defined as a set of elements which are joined together to achieve a common objective. • The set of elements for a system are: 1. Input 2. process 3. Output 4. Feedback/ Control 5. Environment Input Process Output Feedback /Control
    3. 3. Information • One of the Most valuable resource required by the management in order to run the organization. •Information is the data that is processed and presented in the form that assists in decision making. Data Processing Information • Concept of data & Information is a relative one. Information for one may be data for Another. e.g. Withdrawal slip in a bank is a information for data entry operator but data for the bank manager.
    4. 4. Information Senior Management Operating Management 1. Unstructured 2. Non-Programmed 3. Futuristic 4. External & Internal 1. Structured 2. Programmed 3. Historical 4. Internal 5. Exact Different layers of Management require different types of information
    5. 5. Importance of Information Systems •Necessary for Decision Making •For Taking Rational, Timely & Accurate Decisions •For Taking decisions in Complex Decision situations •Globalization & Liberalization have added various dimensions that necessitate use of Information Systems •IS is regarded as the fifth important resource besides- Money, Material, Men & Machine. •In short Today’s business organizations can’t survive and grow without properly planned, designed, implemented and maintained Information System.
    6. 6. There are broadly three levels of Management Hierarchy •Top Management( Strategic Planning) •Middle Management( Management control) •Operating Management ( Operational control) Top Management Middle Management Operating Management Strategic Planning •Policies •Plans •Budgets •Objectives Management control •Revenue •Costs •Profits •Schedules •Measurements Operational control •Goods •Services •Performance Management Hierarchy
    7. 7. Types of Information Systems INFORMATION SYSTEMS Operations Support Systems Management Support Systems •Transaction Processing Systems • Process Control System •Enterprise Collaboration System •Management Information Systems •Decision Support Systems •Executive Information Systems
    8. 8. Operations Support Systems The Operations Support Systems are the Information Systems that process the business transactions ,control industrial processes,and update company’s databases. Such Systems don’t produce specific information that can be used by the managers. The output of these Systems act as input for higher level systems. To generate useful information, further processing of output from these systems is required.
    9. 9. Transaction Processing System  Book Keeping  Issuance •Data Gathering •Data Editing •Data Manipulation •Data Storage •Information Documents •Error Reports •Control Reports
    10. 10. Management Information Systems PROVIDES INFORMATION On continuous basis and reports like  Scheduled Reports  Exception Reports  Demand Reports
    12. 12. Executive Information System Executive Information Systems are IS that help senior management take decision in unstructured problem situations. EIS find application in decision areas of:  Monitor company performance  Track activities of competitors  Spot & foresee problems  Identify opportunities  Forecasting EIS depend heavily on external sources of data like stock market, economic databases, news services etc. as well as on internal information. EIS have highly flexible and user friendly input & output interfaces. They have drill-down options.
    13. 13. CHAPTER-2
    14. 14. MIS Defined A Management Information system (MIS) is an organized collection of •People •Procedures •Software •Databases,and • Devices that are used to provide routine information to managers and decision makers. The System gathers data from internal and external sources Of the organization; processes it according to the procedure; And supplies Information to assist Manager in taking effective decisions in a speedy manner.
    15. 15. What is Management Information System Management Information Information System is composed of three parts 1. Management 2. Information 3. System Management may be defined as ‘The art of getting things done through and with the people in formally organized groups. A Manager gets the things done by performing different functions in a SYSTEMATIC way and these are • Planning • Organizing • Staffing • Directing • Controlling
    16. 16. •The focus of MIS is primarily on Operational efficiency of resources. Marketing, production, Finance, and other functional areas are supported by Management Information systems and linked through a common database. •Thus MIS is not a single system, rather it is an integrated system where subsystems fit into an overall design. •Management Information Systems typically provide standard reports generated from the Transaction Processing Systems. MIS
    17. 17. Nature & Scope of MIS The discipline of MIS is interdisciplinary. It involves different domains like •Accounting •Management •Computers •Organizations •Mathematics & Operations Research •Behavioral Sciences etc. Management Information Systems Accounting Mathematics & Operations Research Computer Science Behavioral Sciences Management
    18. 18. Constituents of MIS MIS constitutes of • Hardware The computer equipment to perform input,processing and output activities. E.g. CPU, monitor,keyboard, Printer, drives, tapes, communication devices, etc. • Software Computer programs that direct the operation of the hardware. Software could be System software Application software • Databases The databases contain all data that is generated and used by application software.
    19. 19. Constituents of MIS (Contd.) • Telecommunications and Networks • People Analysts, Programmers, System managers, Computer Operators • Procedures Procedures include the strategies, policies, methods, and rules for using the MIS.
    20. 20. Types of MIS Information Systems are developed around the functional areas of business like marketing, finance etc. and are also termed as Functional Information Systems. These may be as •Financial Information System •Marketing Information System •Personnel Information System •Production Information System and so on.
    21. 21. Functional Business IS
    22. 22. Financial Information System Financial Information System provides financial information to all financial managers within an organization and a broader set of people who need to make better decisions. Financial MIS performs the following functions: •Makes financial data available on a timely basis to shorten analysis turnaround time. •Provides easy access to data for both financial and non-financial users, often through the use of corporate intranet . •Integrates financial and operational information from multiple sources, including the Internet, into a single MIS. •Enables analysis of financial data along multiple dimensions- time, geography, product, plant , customer etc. •Analyzes historical and current financial activity. •Monitors and controls the use of funds over time. •For adhering to legal requirements
    23. 23. Financial MIS aids managers in: •Capital Budgeting Decisions •Financing decisions •Dividend decisions •Current asset management Financial Information System
    24. 24. Financial Information System ( Contd.) Financial MIS composes of the Inputs 1. Transaction Data: This data includes credit applications, billing, payment vouchers, stock transfers, cheques, journal and ledger entries etc. 2. Financial Intelligence : This data is collected from banks, government, stock markets, etc. which is processed to determine its impact on the company’s economy. 3. Organizational Plan: Another important input to Financial MIS, that portrays the objectives of the company. This needs to be reflected in the output of Financial MIS, which may be in the form of financial plans.
    25. 25. Financial Information System Business Transactions Transaction Processing System Database Of External Data Database From TPS Datawarehouse FINANCIAL MIS •Sorted Data •Forecasts •Management Ratios •Audit & Control •Other Financial Decisions& Plans •Financial DSS/EIS
    26. 26. Some of the Financial MIS are • Tally • BMS • IFPS Financial Information System
    27. 27. Marketing MIS It is the MIS that supports managerial activities in marketing as product development, distribution, pricing decisions, and promotional effectiveness. The Marketing MIS help managers in marketing activities of: • Customer Identification: who, when, where, in what quantity,etc. • Purchase motivation factors: social, economical, psychological factors of customers. • Physical distribution: optimum integration of transportation, warehousing, merchandising. • Communication function: This function includes decisions on advertising, personal selling, sales promotion, publicity, packaging etc. • Transaction functions : Activities that transfer the title of ownership as order handling, invoicing, billing, credit management, policy & guarantee etc. • Post transaction Function: Feedback, after sales service support etc.
    28. 28. Marketing MIS
    29. 29. Marketing MIS Business Transactions •Internet •CRM Transaction Processing System Database Of External Data Database From TPS Datawarehouse MARKETING MIS Marketing DSS Marketing EIS Marketing ES
    30. 30. Human Resource Management Information System Human Resource MIS are concerned with activities related to employees and potentiaal employees of the organization. The HR functions that are facilitated by HRMIS are as: •Manpower Planning •Staffing •Training & Development •Performance evaluation •Wage & Salary administration •Separation activities
    31. 31. Human Resource Management Information System
    32. 32. Manufacturing Management Information System Manufacturing or Production Information System provides information on production/ operation activities of an organization and thus facilitates the decision-making process of production managers of the organization. Manufacturing MIS facilitate decision making in areas as: •Product Design: CAD, CAE •Plant Location & Layout: •Production Planning & Control:Routing, Scheduling, Loading •Quality Control:
    33. 33. Manufacturing Management Information System
    34. 34. Office Automation System Office automation refers to the application of computer and communication technology to office functions. Office Automation systems improve productivity of managers at various levels of management by providing secretarial assistance and better communication facilities. These systems include facilities for activities as • Typing • Mailing • Scheduling of meetings and conferences • calender keeping • retrieving documents • conferencing • Production of information( messages, memos, reports), and so on
    35. 35. Office Automation Systems provide support facilities in form of: •Word Processing •Electronic mail, •Message Switching, •Data Storage, •Data & Voice Communications. Office Automation System
    36. 36. MIS Characterstics A Management Information System has the following Characterstics: •Systems Approach MIS follows Systems approach i.e. MIS adopts wholistic approach to the study of systems and its performance in the light of the objective of the MIS. It takes comprehensive view or complete look at the subsystems of the organization. •Management Oriented MIS should be designed in Top-down approach. MIS should be derived from the overall business plan. •Need based MIS should cater to specific information needs of managers at different levels I.e. for strategic planning level, management control level, and operations control level.
    37. 37. MIS Characterstics( Contd.) •Exception Based MIS should be on Exception based reporting Principle and deviation should be reported to decision maker at the required level. •Future Oriented MIS should not merely provide past information but should provide information based on the future projections based on which manager may initiate suitable action. •Integrated MIS should blend information from different departments or constitute of different possible subsystems of the organization. •Long Term Planning MIS designers should have future objectives and needs of the company in mind. •Common Data Flow & Central Database
    38. 38. Decision Support Systems Application of DSS: For Inventory Management To identify Customer buying patterns Optimizing discounts/price markdowns. Targeting direct- mail marketing customers Store location Evaluation of Potential drilling sites. Flight Scheduling etc.
    39. 39. Web-Based Decision Support System The DSS based on Web & Internet can support decision making,by providing online access to various databases and information pools along with the software for data analysis. GE Plastics Customer Decision Support Systems: In such DSS customers using web interface to self-serve using the DSS tools of the sponsoring company. Fidelity Investments, etc.
    40. 40. Group Decision Support System GDSS is an interactive computer based system to facilitate the solution of unstructured problems by a set of decision makers working together as a group. While Groupware & video-conference tools provide a platform for communication in group decision, GDSS provides additionally the tools and technologies explicitly for group decision making. Components of GDSS  Hardware  Software  People
    41. 41. Group Decision Support System GDSS software tools include: Electronic questionnaire Electronic brainstorming tools Idea Organizer Prioritizing tools Group dictionaries Stakeholder Identification &Analysis tools Policy Formation tools
    42. 42. System Development For MIS System Development includes the all activities of the development stages of any MIS solution. It includes activities as : • Understanding the Management Problem • Deciding a Plan for a Solution • Coding the Planned Solution • Testing the Coded Program
    43. 43. System Development Stages To develop any system, the project is managed by breaking the total development process into different sub activities or stages. These areas: 1. System Investigation 2. System Analysis 3. System Design 4. System Construction 5. System Implementation 6. System maintenance
    44. 44. System Investigation The organization may be facing any problem and the managers of the organization may not be very clear about the problem. The organization would in such case invite a business/system/ information analyst to help in defining and resolving the business problem in clear form. System Investigation deals with this stage. The Investigation stage constitutes of two sub-stages •Problem Definition •Feasibility
    45. 45. Problem Definition One of the MOST IMPORTANT stages in the System Development Cycle but yet most neglected often. Tasks performed at this stage are Prepare a written statement of the objectives Identify scope of Problem Discover the causes of Problems, etc. For example some of the possible definition of Problems may be as •The existing system has a poor response time •Unable to handle load •Does not provide sufficient information •Problem of security, etc
    46. 46. Feasibility Study Feasibility addresses the viability of the intended MIS would be useful for the organization. It is intended to assess the various alternatives and identify the most feasible and desirable system for development . Feasibility is assessed in terms of the below categories: 1. Organizational Feasibility: The extent up to which the proposed MIS supports the strategic plans of the organization.
    47. 47. 2. Economic Feasibility: The costs and returns are evaluated to justify the investment in the system project. The factors evaluated are • Cost of H/W, S/W, N/W, Cost of Full System Investigation, Maintenance, etc • Benefits in form of targeted objectives of MIS. Feasibility Study
    48. 48. Feasibility Study 3. Technical Feasibility: It deals as with issues as whether hardware and software, capable of meeting the needs of the proposed system can be acquired or developed, in required time. It concerns regarding •Does the necessary technology exist? •Does the proposed equipment have the technical capacity to hold the data, provide response to enquiries, regardless of locations •Can the system be expanded •Technical surety of accuracy, reliability, ease of access, data security, etc.
    49. 49. Operational Feasibility Operational Feasibility contains factors like management support and willingness, employees, customers, suppliers willingness to operate, and adopt the proposed system, etc.It includes •Support from Management •Willingness of employees, Customers to adopt new system and business methods •Support from suppliers, vendors, external partners, etc. •Involvement of users in system development •Meeting regulatory/legal requirement, etc.
    50. 50. Methods of System Preliminary Investigation 1. Reviewing Documents 2. Conducting Interviews
    51. 51. System Analysis System Analysis is the detailed study of various operations of the business system/activity, along with its boundaries. The objective is to determine exactly what must be done to solve the problem. System analysis involves detailed study of: •Information needs of the organization and its end users. •Existing Information Systems( their activities, functions, resources, products) •The Expected Information System( expected capabilities)
    52. 52. System Design System Analysis describes WHAT a MIS should do to meet information needs of organization and System Design specifies HOW the System will accomplish these objectives. System design consists of activities as: •Use Interface : Interactions between user and computer systems. •Data Design: Focuses on structure of database •Process Design: Programs and procedures of the MIS
    53. 53. System Construction Once the system specifications are understood, required programs are coded, debugged, and documented. System Testing Testing done on new Systems, using test data. Feedback leads to improved System.
    54. 54. System Implementation Even a well design System will fail if not implemented properly. It involves various activities as: •Acquisition of H/W & S/W •Site preparation •User training •Installation of the System •Standardizing the new System in the organization.
    55. 55. System Maintenance System maintenance involves the monitoring, evaluating and modifying the system to make desirable or necessary improvements and remove residual errors/shortcomings.
    56. 56. System Development Approaches A System Development approach defines and guides how the system development activities are to be organized in the overall system development process. There are four most important system development approaches. 1. Waterfall Model or SDLC 2. Prototyping Approach 3. Rapid Application Development
    57. 57. Waterfall Model This is also referred to as SDLC( Software Development Life Cycle) or Traditional approach . This approach takes step-by -step approach to system development activities. Once one stage is completed , only then next stage is taken up. :
    58. 58. Waterfall Model(Contd.) Systems Investigation Understand Problem Systems Analysis Understand Solution Systems Design Select & Plan Best Solution Systems Implementation Place solution into effect Systems Maintenance & Review Evaluate Results of Solution
    59. 59. Limitations: 1. Each stage is considered as distinct which may not be in reality. 2. This model involves freezing of requirements for hardware. However in large projects the hardware technology may become obsolete. 3. Involves large documentation and time consuming 4. Users cant easily review the intermediate product and evaluate whether it meets their requirements.
    60. 60. Prototype Model In this approach a prototype is developed, instead of developing the complete system. Users are encouraged to try the prototype and provide feedback. Iterations are done until the final system is developed. Prototyping is done in situations where identification of requirements is difficult and requirements may change during the development process.
    61. 61. Investigate & Analyze problem to develop workable solution Develop Prototype Put Prototype in operation Refine and Modify Prototype Complete System System Development Initiated Prototype ModelPrototype Model
    62. 62. Prototype Model(Contd.) Advantages: 1. Users can try the system and provide the constructive feedback during the development process. 2 An operational prototype can be produced in short periods. 3 Prototyping enables early detection of errors and omissions. 4 Higher motivation & positive response from users. Disadvantages: 1. There may be unending refinements desired by users. 2. System documentation is ignored 3. Prototypes are not complete systems and many of the details are not built in the prototype.
    63. 63. Rapid Application Development Rapid Application Dvelopment( RAD) employs tools, techniques and methodologies to speeded the application development processs. For example Powerbuilder by Sybase, and other tools by IBM, Oracle, etc. are used for RAD. RAD reduces paper-based documentation, automatically generates program source code, and facilitates user participation in the design and development activities. Using RAD entire systems are developed in less than 6 months. RAD is also known as Extreme Programming, Agile Development, Joint Application Development.
    64. 64. Rapid Application Development(Contd.) Advantages: 1. This approach completes the application in lesser time. 2. Documentation produced a s a by-product of project tasks. 3. RAD involves team work and lots of interaction between users and stakeholders with the system developers. Disadvantages: 1.This approach puts high pressure on system developers and other project participants. 2. This approach requires system analysts and users to be skilled in RAD system development tools & techniques. 3. RAD requires very high involvement & time of stakeholders and users affecting their routine functions.
    66. 66. Knowledge-Creating Companies • Consistently creating new business knowledge, disseminating it widely throughout the company, and quickly building the new knowledge into their products and services.
    67. 67. Knowledge Management System Knowledge is the ability of person to understand the situation and act effectively. •Competition & Market forces demand that organizations today can be competitive if they manage the knowledge and continuously upgrade as per changing requirements. •Knowledge Management is the process of capturing, maintaining and updating continuously the company’s expertise both internal as well as external where-ever it resides- in computers, in peoples heads, on paper or thru external sources- and distributing efficiently wherever it can help produce the biggest payoff.
    68. 68. Types of Knowledge • Explicit Knowledge – data, documents, things written down or stored on computers • Tacit Knowledge – the “how-tos” of knowledge, which reside in workers
    69. 69. Knowledge Management System Knowledge Management Systems involve the tasks of •definition, •acquisition, •construction, •storage, •delivery and •application of the knowledge so as to maintain and improve the competitiveness of the organization..
    70. 70. Levels of Knowledge Management
    71. 71. KMS Architecture KMS architecture deals with three main functions as : •Knowledge Identification •Knowledge Generation •Knowledge Delivery KMS Knowledge Identification Knowledge Generation Knowledge Delivery •Definition & Categorization •Surveying & Locating •Build Knowledge Structure •Processing for Acquisition •Manupulating & Modelling Creation of KDB •Access Control •Application Methods •Storage & Security
    72. 72. KMS Tools The tools for KMS are as: Database management tools -For data management and seeking knowledge thru SQL queries Data Warehousing, Data mart, Data Mining tools Process Modeling and Management tools -For recording standard processes for knowledge use Search Engine tools Document Management tools-like Lotus Notes Web based tools- Internet& Intranet
    73. 73. Strategic Information Systems
    74. 74. Strategy and Strategic Moves • Strategy: plan to gain advantage over enemy • Business strategy is plan to outperform competitors – Done by creating new opportunities, not only beating rivals • Strategic Advantage: Using strategy to maximize company strengths
    75. 75. Why Study Strategic IT? • Technology is no longer an afterthought in forming business strategy, but the actual cause and driver. • IT can change the way businesses compete.
    76. 76. Strategic View of Information Systems • Information systems are vital competitive networks. • Information systems are a means of organizational renewal. • IS are a necessary investment in technologies that help a company adopt strategies and business processes that enable it to reengineer or reinvent itself in order to survive and succeed in today’s dynamic business environment.
    77. 77. What is IT? A bunch of networks and computers OR Hardware plus the software that mediates and manages human knowledge or information
    78. 78. Does IT Matter? How important is IT to GE? – Business imperative – Lifeblood for productivity – 20% return on technology investments and GE invests $2.5 to $3 billion a year
    79. 79. Does IT Matter? Paul Strassman, former CIO of General Foods, Xerox, Pentagon, and NASA Information technology today is a knowledge-capital issue. Look at the business powers – most of all Wal-Mart, but also companies like Pfizer or FedEx. They’re all waging information warfare.
    80. 80. Strategic Information Systems Definition: Any kind of information system that uses information technology to help an organization gain a competitive advantage, reduce a competitive disadvantage, or meet other strategic enterprise objectives.
    81. 81. Porter’s Competitive Forces Model To survive and succeed, a business must develop and implement strategies to effectively counter the: • Rivalry of competitors within its industry • Threat of new entrants into an industry and its markets • Threat posed by substitute products which might capture market share • Bargaining power of customers • Bargaining power of suppliers
    82. 82. Competitive Forces and Strategies
    83. 83. Initiative #1: Reduce Costs • Customers want to pay little for service • Reduce costs to lower price • Automation greatly reduces costs • Web can automate customer service
    84. 84. Initiative #2: Raise Barriers to Market Entrants • Less competition is better for company • Raise barriers to entrants to lower competition • Techniques include obtaining copyrights and patents on inventions, techniques, and services • Building unmatchable information systems blocks entrants
    85. 85. Initiative #3: Establish High Switching Costs • Switching costs: incurred when customer stops buying from company and starts buying from another company – Explicit: charge customer for switching – Implicit: indirect costs over period of time • High switching costs locks in customers
    86. 86. Initiative #4: Create New Products or Services • Having unique product or service gives competitive advantage • First mover: organization that is first to offer a new product or service – Superior brand name, better technology, more experience • Critical mass: body of clients that is large enough to attract other clients
    87. 87. Initiative #4: Create New Products or Services (continued) EBay created a new service that established it as an industry leader
    88. 88. Initiative #5: Differentiate Products or Services • Product differentiation: persuading customers that product is better than competitors’ – Achieved through advertising – Exemplified by brand name success – Promotes brand name – Develop new IT features to differentiate product and service EX: Google did not offer an original service, but the service has grown superior to other Web search services
    89. 89. Initiative #6: Enhance Products or Services • Enhance existing products or services to increase value to consumer • Many products and services have been enhanced by the Web EX: Dell continues to enhance its service to maintain the competitive advantage of its online order site
    90. 90. Initiative #7: Establish Alliances • Alliance: two companies combining services – Makes product more attractive – Reduces costs – Provides one-stop shopping • Affiliate program: linking to other companies and rewarding the linker for click-throughs
    91. 91. Initiative #8: Lock in Suppliers or Buyers • Accomplished by achieving bargaining power • Bargaining power: leverage to influence buyers and suppliers – Achieved by being major competitor or eliminating competitors – Uses purchase volume as leverage • Lock in clients by creating high standards
    92. 92. Interneterprise Information Systems Definition: • Information systems implemented on an extranet among a company and its suppliers, customers, subcontractors, and competitors with whom it has formed alliances. • E.g. CISCO
    93. 93. A business that: • can anticipate customers’ future needs. • responds to customer concerns. • provides top-quality customer service. Customer-focused Organization
    94. 94. MIS in Customer Focused Business
    95. 95. MIS RISKS The Security Issues that emerge from MISs are as: 1. Secrecy 2. Privacy 3. Confidentiality 4. Destruction 5. Theft of Information 6. Computer Wastages
    96. 96. The Reasons that affect the security threats to MIS are as: •Destruction •Deletion •Bugs Infection •Theft •Corruption
    97. 97. Sources of MIS Threats Threats to MIS can be caused by different sources and these are Failure of System: Hardware Software Network Telecommunication
    98. 98. Human Actions: Illegal access Theft User Errors Program changes Natural Calamities Fire Earthquakes Floods & rains Sources of MIS Threats
    99. 99. Security Controls Security Controls that can be used by the organizations to counter the security threats.These may be the combination of below: •Access Controls Systems •Hardware & Software Controls •Fault Tolerant Computer Systems ( Mirroring/ Clustering) •Monitoring the Usage/Security Monitors •Biometrics •Anti Virus Protection tools •Firewalls •Cryptography •Disaster management Plan •Employees’ Conduct & Performance Audit
    100. 100. MIS Security Plan MIS Security Management system is designed to meet security threats and involves: •Identification of threat sources & possibilities of its occurrence. •Protecting the Information and MIS from unauthorized access •Ensure the privacy of individual & personal information •Check the misuse of information and MIS •Provide methods and systems to recover from damage and to put the MIS on normal track
    101. 101. How Much Security Is Enough Security? Two costs to consider –Cost of potential damage –Cost of implementing preventative measure
    102. 102. Software Procurement Software can be acquired in different ways. These are 1. Make the Software 2. Buy the Off-the –Shelf software 3. Combination of the above 4. Outsourcing 5. ASP ( Application Service Providers)
    103. 103. Buy the Software The company buys the software developed by vendors in that application area. These are also referred to as off- the -shelf software products. Reasons/ Advantages for this type of procurement: • Lower cost of development • Faster acquisition • Tested product • Known Costs • Doest not require IT development skills • Upgradations available from vendors
    104. 104. Steps in Procurement thru Buy Option: 1. Review Needs, Requirements, and Costs 2. Negotiate & Acquire the Software 3. Modify or Customize Software 4. Acquire software interfaces 5. Test the Software 6. Monitor and Maintain the Software
    105. 105. Disadvantages of Buy Option: 1. Dependence on Vendor 2. High cost of maintenance 3. Fit with the Company’s Requirements 4. Employee learning & Motivation
    106. 106. Make the Software In this option company performs all the activities of system analysis to system development and maintenance. Reasons / Advantages: 1. Software meets the specific requirements. 2. Customized Changes in the software possible 3. Software acts as core competence 4. Potential for commercialization of the developed software product 5. Higher learning environment in the company
    107. 107. Business Process IT Technology Customer Purchases Deal Structure Fixed Cost Product 40s-50s 60s-70s 80s-90s 00s 15-20 10-12 5-8 10-20 8-10 3-5 Application IT Solution Business Outcomes Variable costs IT Outsourcing BPOContinuous 1 - 3 IT & Business Process Life
    108. 108. IS Outsourcing IDC Defines IS Outsourcing as a long term contractual arrangement in which the service provider takes ownership of and responsibility for managing all or part of a client’s IS operations or department based on a service level agreement IS OUTSOURCING DEFINED
    109. 109. Information System Outsourcing services • System integration • Facility management • Contract programming • Software support • Network maintenance • Minicomputer/Mainframe/ Workstation/PC maintenance
    110. 110. • Total outsourcing • Total insourcing •Selective Sourcing/Smart TYPES OF SOURCING
    111. 111. WHAT TO OUTSOURCE Non-Core, Non Critical •Security •Cafeteria •Laundry Likelihood to OutsourceHigh Core Business •Managing marketing Image/Trademark •Canning for patents •Find/Sell new products •Manufacture products •IS Likelihood to Outsource : LOW Non-core, Yet Critical • Accounting •Supply chain Management •HR Administration •Claims Administration •IS Likelihood to Outsource:Medium -High
    112. 112. DRIVERS FOR OUTSOURCING Outsourcing IT leads to low running costs Outsourcing IT has low setup cost. Outsourcing IT has low set-up time Shortage of skilled manpower Expertise of outsourcer Organisation needs to focus on core function rather that IT activities Low Down time Improved output/performance of Inf. System Better service to users High cost of maintaining and updating IT employees Availability of network bandwidth and technology
    113. 113. Application Service Providers An ASP provides contract-based service to supply and host software and computing applications, data storage, reporting tools, upgrades, and technical support to its clients using a web platform via the Internet or an extranet. Applications are generally leased on need basis with flexible monthly fixed rates ranging anywhere from $ 10 to $ 10,000 per month and variable according to usage.
    114. 114. Advantages: •Faster adoption of the software •No hassles in system development & Maintenance •Companies can focus on their core functions Disadvantages: •Dependence on ASP vendors. •High Costs •Customized application may not be possible •Changes in software difficult
    115. 115. System Implementation Implementation is the process of installing a newly developed MIS at the organization’s site. This may involve either installing new system in case there is no earlier system OR installing modified system.. Implementing the MIS means putting the new system into operation.
    116. 116. The various stages in MIS Implementation are as: 1. Planning the Implementation 2. Acquisition of Facilities and Space Planning 3. Acquisition of Hardware & Software 4. User Training & Hiring 5. Data Preparation 6. Installation 7. Testing 8. Changeover 9. User Acceptance System Implementation Stages
    117. 117. Implementation Planning It is the blue –print of the MIS Implementation and is the detailed plan of implementing the MIS in the organization. The pre-implementation activities as: •Identifying MIS team and managing the project team, •Scheduling the implementation activities, •Control mechanism, etc Gantt Charts and Network diagrams are used to monitor/schedule the implementation activities.
    118. 118. Acquisition of Facilities and Space Acquisition of facilities as computer room, office, etc. Space planning and Layout of following required as: • Computer centres, • Printers, • Network Cabling • People and their movement, • No. & Type of exits, • Storage areas, • Airconditioning, • Safety equipments & Measures, etc
    119. 119. Acquisition of Hardware & Software Hardware & Software procurement is a detailed and exhaustive exercise and involves • Requirement Analysis, • Procurement mode (Inhouse OR off-the-shelf OR thru ASP) • Inviting vendor quotations ( Tender process in public / large contracts) • Comparison of Different offerings( Technical & Financial aspects) • Negotiations • Delivery & Installation • Post installation review
    120. 120. User Training & Hiring User training is very important for the success of MIS implementation. Training of varying nature is to be given to different levels of employees: data entry operators/clerks, supervisors, managers / senior management in the use of MIS. Technical training is given to IT employees for maintenance etc. People with skills not in the organization may be hired, These may be from management as well as technical background in the new set up.
    121. 121. Data Preparation Data Preparation refers to the activity of converting data that have been earlier in the manual processes into computer form according to the designed structure of MIS. Normally outsourced or made by temporary staff. Once old data turned into MIS system, new data is handled by the new computerized MIS system.
    122. 122. Installation Installation is the process of physically placing the computer equipment on the site, install & configure the software so as to make it operational. IS manager is generally responsible for the installation, though some of the installation activities are performed by vendors.
    123. 123. Testing Testing is performed at system construction stage. However testing is performed at implementation with actual data.Testing is performed on individual components of the MIS as well as whole system. •Equipment •Forms •Programs •Work procedures •Out puts & Reports
    124. 124. Testing is done from the perspectives of: •Accuracy •Range of inputs •Frequency of inputs •Operating conditions •reliability Testing
    125. 125. Changeover to New MIS Chageover is the event of switching to new MIS from the current system. If there is no existing old system, then there is straight-over implementation in one go. However if there is existing system, there are four approaches for changeover: 1.Direct Conversion 2. Phase-in-approach 3. Pilot start-up 4. Parallel start-up
    126. 126. User Acceptance The stage at which, user takes the final ownership from the vendor and subsequently vendor is not responsible for the problems in the MIS. This is done in the form of user- acceptance document.
    127. 127. System Maintenance System Maintenance refers to the stage that involves checking, changing, and enhancing the system to make it more useful in achieving user and organizational goals.
    128. 128. System Maintenance Reasons for Maintenance: •Changes in business processes •New requests from stakeholders,customers, users, and managers •Bugs or errors in the program •Technical and hardware problems •Corporate mergers and acquisitions •Government regulations •Changes in the operating system or hardware on which the application runs.
    129. 129. Types of Maintenance 1. Corrective Maintenance This type of maintenance involves removal of errors in the program that may have creped into the system because of faulty design or wrong assumption. In this processing or performance failures are repaired. 2. Adaptive Maintenance In Adaptive maintenance, program functions are changed to enable the information system to satisfy the information needs of the users. For example •Changes in organization’s procedures, objectives, goals, policies •Change in information needs of managers •Change in system controls and security needs.
    130. 130. 3. Perfective Maintenance This maintenance involves adding new programs or modifying the existing programs to enhance the performance of the information system. Reasons for Perfective maintenance may be : •Changes in economic and competitive conditions; •New technology
    131. 131. System maintenance can be understood under four ategories depending upon the change in the systems. . Slipstream Upgrade . Patch . Release . Version Classification of Maintenance
    132. 132. 1. Slipstream Upgrade A minor upgrade – typically a code adjustment or minor bug fix, which may not be announced. 2. Patch A minor change to correct a problem or make a small enhancement. It is usually an addition to an existing program.
    133. 133. 3. Release A Release is a significant change in the program which may involve change in design and documentation. 4. Version A Version involves major changes, usually encompassing new features.
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