Mis presentation and budgeting

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INTRODUCTION TO MIS
Management Information System plays a very important role in an organization. There is
hardly a business magazine that does not contain article about information system.
MIS can be defined as –
“A system which collects, processes, stores and distributes information to help in decision
making for managerial functions.”
(Planning, staffing, directing, controlling, organizing and budgeting)
It may also be defined as Integrated user/ Machine system for providing information to support
the decision making process.
MIS is a computer based system, which presents both external and internal information of
business. This system utilizes computer hardware and software, manual procedure for analysis,
planning, control and decision making.
These system do not take decisions but they assist in providing a necessary information as an
input to the decision making process.
MIS should provide information which is consistent, accurate, timely, economically flexible
and relevant.
MIS can be computerized or manual. MIS provides information in report format on regular
basis to assist managers with decision which occur frequently and can be anticipated.
MANAGEMENT
Management has been defined in a variety of ways, but for our purpose it compromises the
processes or activities that describes what managers do in the operation of their organizat ion;
plan, organize, initiative and control operations.
INFORMATION
Data must be distinguished from information. Data are facts and figures that are not currently
being used in decision process.

Information consist of data that have been retrieved, processed or otherwise used for
informative or inference purposes, arguments, or as a basis for forecasting or decision making.
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SYSTEMS
A system can be described simply as a set of elements joined together for a common objective.
The system concept of MIS is therefore one of the optimizing the output of the organization by
connecting the operating sub-system through the medium of information exchange
PYRAMIDICAL STRUCTURE OF MIS
Lower level:-The bottom layer consists of information required for transaction processing and
inquiry processing.
Operational level: - This layer has the information which is required for day to day
performance of activities and their control.
Middle level: - This layer has the information which is useful for tactical planning and decision
making to implement the policy of top management.
Top level: - This layer has information which is useful for strategies and policy planning.
CHARACTERISTICS OF MIS
The MIS plays a vital role in management, administrations and operations of an organiza t ion
as it helps in information generation, communication, and problem identification in the process
of decision making.
The main features of MIS are:-
I) Management oriented: - The development of MIS starts after deciding the
management needs and keeping in view overall objective of management.
II) Management directed: - A good MIS removes the lack of knowledge, enriches
experience and improves analytical abilities leading to better business judgment.
III) Integrated system: - MIS binds together database of business system and through
information interchange, integrates the organization. It also provides adequate
development resources and removes the human and organizational barriers to progress.
IV) Avoid redundancy: - Since MIS is an integrated system, it avoids unnecessary
inconsistency and redundancy in data gathering and storage.

V) Common data flow:-MIS provides common data flows, which try to utilize minimum
data processing efforts and minimize the number of output document.
VI) Heavy planning element: - Designing and implementation of MIS require detailed and
meticulous planning of activities like acquisition and utilization of resources.
VII) Common database: - MIS acts as a master that holds the functional sub-system
together. It achieves this aim by allowing access to different master files of data to
several functional sub-systems.
VIII) Flexibility: - MIS design should be flexible so as to provide alternate ways of
processing data and system should be easy to operate so that not much of computers
skills are required.
IX) Computerization: - MIS can be computerized because of its nature. This provide
speed, accuracy and consistency in creating and access of files.
X) Relevance: - MIS should deal only with operation and control of relevant informat ion.
XI) Support to top management: - MIS cannot be effective unless they receive the full
support of top management. For this, top management should be educated about cost
and benefits of MIS.
XII) Periodic evaluation: - The last feature of MIS is that the system should be evaluated
at periodic intervals to ensure that MIS is achieving the objective of which this has been
installed.
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COMPONENTS OF MIS
Management information system refers to the data, equipment and computers program that are
used to develop information for managerial use. The MIS consists of following components
which are as follows-
I) People: - People is only living component of MIS which operates and controls the
other components of MIS. They enter, analyze and diagnose data, so that useful
information is produced and provided to top executives for decision making.
II) Data process: - Data process uses different procedures, so that data can be properly
analyzed and effective information is generated. Procedures explain people how to
operate the computer hardware, what program to run, what data to use and what to
do with the results.
III) Data communication: - There are different ways for communication of data. It
may be informed orally or in the form of written report. Written forms are more

appropriate than oral ones as it is permanent and systematic way of organizing
information.
IV) Information: - Data are facts and figures that are not currently being used in
decision process. Data is process by applying different procedures to obtain
information. It may be recorded into computer, storage media or manual files and
is retrieved whenever required.
V) System planning: - We have achieved a very high degree of automation and
combination sub-system in scientific, mechanical and factory manufactur ing
operation. The system concept of MIS is therefore of optimizing the output of the
organization by connecting the operation sub-system, through the medium of
information exchange.
VI) Hardware and Software: - The hardware generally consists of computer
equipment, on the other hand software consists of programs or instructions given to
the computer such as pay roll processing, invoices etc.
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FUNCTIONS OF MIS
A MIS is used to collect data, store and process data and present information to managers.
I) Collect data: - Data can be obtained from source within and outside the
organization. Internal sources such as records, reports and external sources such
as publications, customers and consultancy.
II) Store and process data: - After creation of data, a database must be stored and
processed in a form useful to managers. The data can be loaded into computers
for easy access by user.
III) Present information to users: - After collection of data, storing and processing
of data, the next step is to present the information to managers for their use.
USES/BENEFITS/ROLE OF MIS
I) MIS ensures that appropriate and relevant data is collected from various
sources, processed and is sent further to needy destination.
II) It fulfills the needs of individual, group, management.
III) MIS helps in strategic planning, management control, operational control and
transaction processing system.

IV) MIS plays an important role in information generation, communicat ion,
problem identification and decision making administration.
V) With good MIS support marketing, finance, production and personnel funct ions
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increases efficiency.
VI) MIS creates structured database and therefore saves time.
VII) MIS brings clarity in communication and understanding, thus helps in bringing
degree of professionalism.
INFORMATION
We breathe information, eat information, drink information, wake up with information, sleep
with information etc. So information is as life blood of any organization, without informa t ion
survival of any organization is not possible.
Information means “processing of data or analyses of data in a specific context to get required
information”. It is a basis of decision making. The decision taken on basis of complete and
accurate information is less risky.
The value of perfect information is calculated by finding out the difference between the opt imal
policy with and without perfect information.
Characteristics of an information
i) Accuracy: - Accuracy means that information is free from mistakes and error and
it accurately and clearly reflects the meaning of data from which it is derived. It
conveys the accurate picture to receiver and is free from biasness.
ii) Timeliness: - Information must be delivered at the right time and the right place to
the right person otherwise information would be of little value to the organizat ion,
hence, making information available to the receiver within time is very crucial for
every organization.
iii) Relevance: - Information should be to the point and meaningful to the decision
maker. Relevance of information for different users will be different.
iv) Correct information format: - Information should be given to the user in such a
form that it could be easily understood by user.

v) Completeness:-Information is said to be complete if decision maker can
satisfactory solve the problem at hand using that information. Incomplete
information has no meaning for user.
vi) Subjectivity: - It is the value and usefulness of the information.
vii) Accessibility: - Information should be readily accessible in desired format when
needed. Technological advancement has made data accessibility easy.
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Types of Information System
I) TPS (Transaction Processing System):- Most fundamental computer system
which is concerned with processing of business is called TPS. The objective of TPS
is to improve routine business activities on which functions of organiza t ion
depends. The main work of TPS is to record and process the data resulting from
business transactions. A transaction is an event or entity which affects the
organization. Transaction processing could also be considered as a set of procedures
for handling transactions and it includes activities like calculation, classificat ion,
storage and retrieval, sorting, validation, verification, summarization etc. These
activities occur at operational level in nay organization. TPS produces a variety of
information system for internal and external cause.
II) OAS (Office Automation System):- OAS collects, processes, stores and transmits
data and information in the form of electronic office communication. These
automatic systems rely on text processing, telecommunication and offer
information system technologies. Example- word processing, electronic mail,
desktop publishing, telecommunication and document image processing. It
enhances the abilities of users to communicate with their colleagues within their
work groups and organization and with external contact such as customers and
suppliers.
Advantages-
 They provide more time to managers to concentrate on their basic jobs.
 They improve the quality of work in terms of content, thoroughness, timeliness and
accuracy.
 They speed up specific functions and thereby increases the quantity of clerical output.
 They reduce the time spent on input capture and creation.

 They co-ordinate and integrate office tasks.
 They enable more cost- effective and time- effective communications.
 They increase the productivity of office workers at all levels.
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Disadvantages –
 Cost of automated office hardware is very high.
 OAS can disrupt traditional office work roles and environment.
 OAS may lead to security problems.
III) EIS (Executive Information System):- The decision made by executives are
mostly unstructured for which informational requirements are generally for
processed and summarized data from variety of sources. Initially tip executive
information system relies on non-computer source. Top level executives get
information whenever they require from many sources like letters, memos,
periodicals and report produced manually as well as by computer system. Thus,
with computer based EIS provides top management with immediate and easy access
to selective information, which reduces the information overload on executives and
help to achieve firm’s strategic objective.
IV) ES (Expert System):- Expert system aims at formalizing expertise and makes it
available for repetitive types of business decisions. They use artificial intelligence
tools to generate knowledge out of information. It helps human experts perform
their jobs effectively and is important where expertise is scarce and is therefore
expensive. The expert system has been developed for the purpose of expertise from
those with the knowledge in a convenient and easily accessed manner. Expert
systems are designed to replace the function formed by human experts. Expert
system provide information to managers as expert advice.
An expert system supports the intellectual work of professionals engaged in design,
diagnosis or evaluation of complex situation requiring expert knowledge in a well-defined
area.
Advantages:-
 Planning: - ES can make a valuable contribution to planning. It can use
information from earlier project which can be used to improve subsequent
plans.

 Decision making: - ES can support decision making by storing informa t ion
in its knowledge base from several experts rather than a single expert.
 Monitoring: - ES can be used to monitor the process, activities of
employees and cash management etc.
 Diagnosis: - ES can be used in diagnosing different conditions. Ex- in
diagnosing the reasons for manufacturing equipment, human diseases in
medicine etc.
 Training: - when an ES is being used as a regular nature in the course of
work, users learn the way the system reaches destination.
 Timely response: - ES are available on call at all the time and, can be used
to provide immediate support and to perform task immediatel y.
 Reliability: - they are reliable in the sense that they do not become tired or
bored. They pay attention to all details and do not overlook any relevant
information.
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Disadvantages:-
 Expert system are not problem solver.
 It may take longer time to solve problem than an expertise.
 Expert system take long development time and are expensive.
SYSTEM VIEW OF BUSINESS
We should be able to visualize any business organization as a system. Thus business is a
system which is a set of interrelated components that are working together to achieve
organization’s objective in a controlled manner. In the past, managers had to solve the problem,
independently and in isolation. Suppose organization face the problem of decline in sales and
it is traced that problem is due to poor performance of sales man. But practically there are no.
Of reasons responsible for that such as poor management, poor understanding, poor quality of
product, poor marketing policy etc.
This type of activity could be related to a system. A business must maintain appropriate
relationships with other political, economic and social systems in the environment. This group
includes its stakeholders such as customers, suppliers, stockholders etc. Information system

can help a business to shape its relationships with each of these stakeholders. In the same way,
MIS is also a system which consists of group of people, a set of manual and data processing
equipment which aims to provide information to reduce the uncertainty in decision making.
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SYSTEM APPROACH
The system approach in business was born in decade of 1960’s. It is a systematic process of
problem solving based on scientific methods which defines problems and opportunity in a
system context.
Information describing the problem or opportunity is gathered. Alternative solutions are
identified, evaluated so that, best solution is selected, implemented and then its success is
evaluated.
Purpose of system approach is to utilize scientific analysis in complex organization for-
 Developing and managing operating system i.e. money flow, personnel system.
 Designing information system for decision making.
System approach of MIS is optimizing the output of the organization by connecting to operative
sub system through the medium of information exchange. The basic notation of system
approach in MIS is to provide information on decision making on planning, organizing,
controlling the operations of sub-system of the firm.
The system approach in business for MIS is implemented by “SYNERGY”. The concept of
synergy tells us that the sum of part is greater than the whole i.e. the output of total organiza t ion
can be enhanced if the components part can be integrated.
Thus, in an organization synergy is simultaneous action of separate but inter-related parts that
together produce a total effect greater than sum of individual parts.
SYSTEM APPROACH IN PLANNING
The Most Basic and Important Function of Management Is Planning. We know that Planning
is needed at all levels of management and success of all other management function depend
upon Planning.

Planning means deciding in advance what has to be done, who has to do it, when it has to be
done and how it has to be done. It bridges the gap between where we are and where we want
to go.
This system approach to planning starts with strategic plan as a framework. The strategic plan
is specific but not detailed. The long term goal provides the constraints for setting intermedia te
and short term goals.
Therefore strategic plans ties together the development plan also.
The strategic planning process consists of two steps-
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 Developing the strategy
 Formulating the steps, timing, and cost required to achieve the strategy.
SYSTEM APPROACH IN ORGANIZING
Organizing is important to managers because it helps in effective group action. It also helps in
maintaining the people to work together and accomplish objectives i.e. organizing. It involves
the grouping of tasks necessary to accomplish plans and assign activity to department.
It consists of following components-
 The formal organization system as describes in chart policies and procedures.
 The informal organization
 The individual as a system
 The organizational communication system
 The power system
 The functional system
 The management process system
 The material logistic system
We know that system approach say that, output is greater if all part work with integration. This
is same concept of organizing.
Phases of organizing are-
 Developing a technical organization based on traditional methods of
departmentalization.

 Start with overall company’s objectives and develop a hierarchy of network of system
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required.
 Involve key manager and specialist in order to select group of people so that planned
activities are done in order to achieve objective.
SYSTEM APPROACH IN CONTROLLING
Controlling Is Important Because It Is Needed To Achieve The Desired Results. The Most
Common Process Consists Of Three Steps-
 Setting standards of performance- it involves what level of performance we need.
Hence, standards are criteria against which result can be measured. These criteria can be
quantitative or qualitative.
 Measuring performance- once standards have been established it is necessary to
measure performance against standards. The statement of measurement and of any
difference is usually in form of personal observation type of report in oral or written
form.
 Deviation control- we know that measuring deviation first comparison of standards
with actual performance is made. If deviation is found then correction is made by taking
some course of action to achieve the targeted objectives.
Methods and techniques for correcting deviation can be described in terms of funct ions
of management-a)
Plan- recycle the management process, review the plan, modify the goal or
change standards.
b) Organize- examine the organization in standard and make sure duties are well
understood.
c) Staffing- improve selection of sub-ordinate, improve training, reassign duties.
d) Directing- provide better leadership, motivate the people, explain the job better.

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DATA PROCESSING
Data processing is basically concerned with converting raw data into well-ordered informat ion,
which serves the purpose of result processing. It essentially consist of facts relating to events
and entities. In a business situation, a sale or purchase is an event. While person, place, things
etc. are entities. Data processing consists of data input, data manipulation and outputting results
of data manipulation. For the purpose of data processing data contained in source documents
are fed into computer. Data manipulations consists of such operations as classification, sorting,
calculations and summarizations, while output operations contains management of storage,
retrieval, communications and reproduction of the result.
FLOW CHART
A flow chart is a diagrammatic or pictorial representation of the algorithm. It indicates solution
of a problem. They are constructed by using special geometrical symbols. Each symbol
represents an activity. The activity could be input/output of data, computation/processing of
data, taking a decision, termination of solution etc. the symbols are joined by flow lines to
obtain a complete flow chart.
1. Terminal symbol: - The terminal symbol is used to indicate the point at which a flow
chart begins and ends. It is accepted procedure to insert the word START and STOP
with the terminal symbols.
2. Input/output symbol: - In a program i/p and o/p symbols identify the logica l
positioning of input and output operations. I/O symbol indicates to take input from user
and o/p symbol is used to generate solution to the problem.
3. Processing symbol: - In this, data are automatically processed. We can define
computations and after that data moves to storage area or output area.
4. Decision symbol: - It is also called logical symbol to solve many business problems,
many comparisons of data are made before selecting the best alternative. The two
principal components of decision symbol are-
 A question that defines the logical operation.
 The result of the decision (i.e. yes/no)
5. Connector: - A flow chart becomes very long, the flow lines start crossing many places
that causes confusions. In that case, it is useful to utilize the connector symbol as a
substitute for flow lines. It is indicated by a circle and a letter or digit is placed within
the circle.

6. Flow lines: - flow lines are used to indicate the flow of operation i.e. exact sequence in
which the instructions are to be executed. The normal flow of flow-chart is from top to
bottom and left to right.
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Advantages-
 Flow- chart is good aid for communicating the logic of a system.
 It helps to identify a relationship that exists among problem element.
 It helps us in effective analysis by breaking down into detailed part of a study.
 Flow –chart act as a guide or blue print during the system analysis program preparation
phase.
 The flow chart helps in debugging process i.e. it helps in detecting, locating and
removing mistakes.
Disadvantages-
 When the program logic is complex the flowchart becomes complex.
 If alterations are required, the flow chart may require re-drawing completely.
 No uniform practice is followed for drawing flow-chart.
 Sometimes it becomes difficult to establish the linkage between various conditions and
actions.
CONVERSION OF MANUAL SYSTEM INTO COMPUTERISED SYSTEM
Today is the world of information technology. In business lots of complexity and competition
are there. In order to reduce this, we are using information technology in business. So, we are
converting manual system to computerized system. The steps involved in conversion are:-
1. System description: - It is usually prepared after preliminary investigation and
definition of the problem. The description is essentially a statement of major input,
output, processing operation and files needed.
2. Input document: - After the system description is completed. It is necessary to specify
how the information will be put into the form that is acceptable to the computer.

Volume of information, frequency, accuracy and verification requirement and the
handling of the information are considered in the selection of input format.
3. Output document: - Outputs are subject to much the same considerations as input
document but the output format should be treated with additional care because it
represents the objective and purpose of entire operation. It is the output document with
which the management is almost exclusively concerned and because of its critical
nature care should be taken in its design.
4. File design: - The logic required to control the flow of data through the system is a part
of system design and the flow is in turn dependent upon the design of data files. In this
we consider the type of equipment, storage capacity, input and output media and format.
5. Program logic and computer program: - Although there are numerous means of
thinking through and document programming logic, we will use flow-chart because
they are easy to depict and understand. The program flow-chart is the program logic of
step-by-step representation of how the computer program will accomplish the job. It’s
the blue print of the program.
6. System verification: - After the program has been written and run through the
compilation process. It’s placed memory in binary form and is ready to process the file
on disk and print the required report. The verifications means to check the work is done
according to the specifications or not. If not, what steps are to be taken to meet
specifications?
7. Documentation: - The documentation is a complete written format of whole activit ies.
It is manual. It helps in understanding the system easily. When a person is new to the
system and does not know how to use the system but by reading the documentation he
can easily understand and use the system.
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SOFTWARE
Software is a set of computer program instructions that directs the operation of the hardware
called software. A set of instruction for a specific task is termed a routine. A complete set of
instruction to execute a related set of task is a program.
Software is a language of computer science or technology which deals with the codes or coded
instructions according to which computer is to operate the procedures with the help of the

computer and the programs for various routine applications and utilities are collectively called
“software” and in order to match the word “hardware”.
Computer software is classified into two major types of programs
I. SYSTEM SOFTWARE: - A computer is highly complex machine and the role of the
computer software is to make it run. We know that system software refers to all the
programs which make the computer work easy and are commonly supplied by the
manufacturers or computer vendor along with the hardware. It consists of number of
specialized programs that help the computer to co-ordinate and control all activit ies
relating to computer operations. System software can be grouped into three major
functional categories-
 System Management Programs- it manages the hardware, software and data
resources of the computer system during its extension of the various informa t ion
processing jobs of users. Major system management programs are operating
system, database management system and telecommunicat ion monitors.
 System Support Programs: - programs that support the operations
management and the user of a computer system by providing a variety of system
services. Major support programs are system utilities, performance monitors
and security monitors.
 System Development Programs: - Programs that help user to develop
information system programs and procedures and prepare user programs for
computer processing. Major development programs are language translators,
programming tools and case packages.
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II. APPLICATION SOFTWARE: -
It refers to the program which helps the computer to work effectively for specific applications.
Application software, thus, refers to the program of instructions, tailored to cause the hardware
to function in a desired way for processing an application, unique to the user. Applicat ion
software, therefore is also often called user software.
 General Purpose Program: - General applications programs are programs that
perform common information processing job for end users.

E.g.: - Word processing, spreadsheet, data base management programs, integrated
packages and graph programs are popular with micro-computer uses for education,
business, scientific and many other purposes.
 Application Specific Program- Thousands of application software packages are
available to support specific application of end users, major categories of such
application specific program are as follow-
 Business application program: - it is related to the business function or industry’s
requirements, examples of such business function and this corresponding application
are accounting, marketing, finance, manufacturing, operation management.
 Scientific application program: - Programs that perform information processing task
for natural, physical, social and behavioral science and for mathematics, enginee r ing
and all areas involved in scientific research, experiment and development.
 Other application programs: - There are so many application area of computer such
as computer application in education, entertainment, music, art, law enforceme nt,
medicines and so on.
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MODEM
Modem are most common types of communication processor. They convert the digital signals
into analog signals or transmission terminals at one end of the communication link into analog
frequencies, which can be transmitted over ordinary telephone lines. A modem at another end
of the communication converts the transmitted data back into digital form at receiving terminal.
This process is known as modulation and demodulation and the word “MODEM” is a
combined abbreviation of those two words. It comes in several forms, including small stand-alone
unit, plug in circuit boards and microelectronic modem chip.
Modem is necessary because ordinary telephone lines were primarily designed to handle
continuous analog signal. We know that data transmission from computers are in digital form,
devices are necessary to convert digital signals into appropriate analog transmis s ion
frequencies and vise-versa.
TELECOMMUNICATON
Telecommunication is sending of information in any form (i.e. voice data, text and images)
from one place to another using electronic or light emitting media.

There are different types of communication network. However, from one end user point of
view there are three basic types-
 Wide Area Network: - WAN is a very large network, which are used to transmit or
receive information inter-countries, inter-continents etc. data is transmitted through
satellite. It is a kind of internet. They are connected through public or private network.
 Metropolitan Area Network: - Network that covers a large city or metropolitan area
can also be included in this category. Such large networks are becoming a necessity for
carrying out the day to day activities of many business and government organiza t ion
and their end users. They are used by manufacturing firms, banks, retailers, distributors,
transportation companies, government agencies and many other organizations to
transmit and receive information across cities.
 Local Area Network: - It connects information processing devices within a limited
physical area, such as an office building, manufacturing plant or other workstations.
They have become a major type of telecommunication network, since micro computers
were introduced into offices, departments and other work groups. LAN uses a variety
of telecommunication media and communication processors to interconnect computer
terminals, personal computer work station other computer system and other types of
computer peripherals devices.
A telecommunication network consists of five categories of components-o
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Terminals
o Telecommunication Processors
o Telecommunication channels and Media
o Computers
o Telecommunication Control Software
WIRED TELECOMMUNICATION
We know that, telecommunication is sending of information in any form (i.e. text, voice, data,
images etc.) from one place to another using electronic or light or through physical wired.
The wired telecommunication is a type of communication in which informat ion is sending or
receiving from one place to another through physical medium. This medium may be coaxial
cable, twisted wires, fiber optics etc.

The disadvantages of wired telecommunication devices is that, it can’t be moved anywhere as
mobile phones and for long distances longer length cable is required.
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WIRELESS TELECOMMUNICATION
For the mobile users, twisted pairs, coaxial cable and fiber optics are of no use. They need to
get their bits of data for their laptop, notebooks, palmtop or wrist watch computer without being
bothered to the terrestrial communication infrastructure, for these users, wireless
communication is the answer.
It appears that future holds only two types of communication fiber and wireless. All fixed
computers, telephones, faxes and so on will be by fiber and all mobile ones will be using
wireless. The advantage is that, it is converting large distance and also communication is
possible in plane, train, bus and car or even walking.
DECISION SUPPORT SYSTEM (DSS)
The DSS is an interactive computer based system, which decision makers to utilize data and
models to solve unstructured problems. The DSS is designed to facilitate the solutions of
problem of structured than that of MIS and TPS which are less structured. The nature of
decision taken by DSS is of non-routine and less structured. The DSS is a collection of data
and data processing tools used to creatively manipulate data to answers unknown and often
unexpected questions.
DSS aims at supporting the decision maker by providing the information with the aid of
quantitative techniques.
Components of DSS-
 Hardware Resources- Executives work stations, are connected by telecommunica t ion
network, to other computers and devices in the organization, and provided the primary
hardware resources for a DSS.
 Software Resources- DSS software packages are called DSS generators. They contain
modules for database, model and dialogue management. A database manageme nt
module provides for creation, interrogation and maintenance of DSS.
 Data Resources- a DSS database contains data and information extracted from the
databases of organization, external databases and a managers personnel databases.

 Model Resources- The model base includes a library of mathematical models and
analytical techniques stored in a variety of program modules and files.
 People Resources- DSS can be used by managers or their staff specialist to explore
decision alternatives. However the development of large or complex decision support
system and DSS software packages is typically assigned to information system
specialists.
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APPLICATIONS OF DSS
DSS are used for a variety of applications in both business and government. When DSS are
developed to solve large and complex problem that are continually faced by an organiza t ion
they are called institutional DSS.
 An Airline DSS- An analytical information management system is a decision support
system used in airlines industry, it was developed by AMERICAN AIRLINES bit is
used by other airlines, aircraft manufacturers and airlines financial analysis consultants
and associations. It supports a variety of airlines decisions by studying factors such as
aircraft utilization, seating capacity and utilization traffic and profitability result.
 A Marketing DSS- BRAND AID is used for marketing planning, especially in the
packaged goods industries. It helps brand managers to make pricing, sales efforts,
promotion, advertising and budgeting decisions for products, product lines and brand
of products
 Government DSS- GADS (GEODATA ANALYSIS AND DISPLAY SYSTEM) was
developed by IBM. It constructs and display maps and other graphics display that
supports decisions affecting the geographic distribution people and other resources.
 A Banking DSS- MAPP (Managerial Analysis for profit Planning) is a DSS developed
by CITI-BANK. It was designed to support decisions involved in the financial planning,
budgeting costing and pricing of bank products.
CHARACTERISTICS OF DSS
 Ability to support the solution of complex problems.
 Fast response to unexpected situations.
 DSS is particularly designed for an individual or group of decision makers.
 A DSS is best conceptualized as a process instead of product.
 Cost saving

20
 Improving managerial effectiveness.
 Improve the effectiveness of decisions.
 Flexible and adaptable to change in the external environment.
BUDGETING
A plan and implementation are crucial for the success of any marketing activity. For a
marketing strategy to be successful, the company should set goals, create a strategy and come
up with tactics and prepare a budget. “When coming up with a budget it is important to consider
the size and allocation of total promotion expenses when formulating the promotion strategy.
Unless this is done, the integration of the components is likely to be fragmented” (Cravens &
Piercy, 2003)
Budgets are plans. They are spending plans, activity plans, sales plans, marketing plans, all
linked to the disciplines of careful projection and resource allocation.
Companies use different amount of money when implementing their strategy. Coming up with
a budget is a very crucial marketing tactic since it will help a company use the resources it has
to achieve its objectives.
Benefits of creating and using a marketing budget
- It presents a clear picture of the financial implications of the plan
- Assists in the coordination of marketing activities within the organization.
- Helps a company be able to be accountable and achieve the company’s objectives.
- A budget helps an organization to be on track and enable the marketer be able to make
modifications in the budget if something goes wrong or right.
- Helps a company be able to control its expenses and project their revenues.
Factors to consider when coming up with a marketing budget
Some companies are spending too much money in their marketing strategies which can have a
financial impact on the company if they overspent. They lose accountability of how the money
was allocated and it becomes frustrating if the company does not meet its objectives.

When coming up with a budget and allocating marketing money spent, the following are
criteria that must be considered first hand;
- Company objectives; the objectives should be smart, measurable, attainable, realist ic
and time bound. The person allocating the money must consider the promotional tools
that will be used to help the company achieve the objectives.
- Regulations and legislation; political and legal factors affect the way a company will
carry out its marketing activities especially if the company is expanding internationa l.
In-house policies will also affect the allocation of money.
- Company’s financial reports; these lay a foundation on the resources the company has
and how it has been fairing. This will help in determining the amount of money to be
set aside for the marketing implementation. The importance of the budget is to spend
less than what the company has and the profits made.
- A company should put into consideration the resources it has. It should use what is
available and avoid spending too much objectives and the available time scale.
- The promotion components in the marketing strategy and their effectiveness in meeting
the marketing objectives together with their contribution.
- Put the budget in paper and modify the budget if need be.
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Budgeting approaches
Coming up with an optimal budget is difficult because there are factors that come in place.
However, coming up with a budget emphasizes in improving promotion effectiveness
compared to past results.
Several budget techniques are used when coming up with a budget;
1. Objective and task
It’s the common used budget technique. Here, the management sets objectives and determines
the tasks needed to achieve the objectives and add up the cost. The management must evaluate
how the objectives are to be achieved and choose the most cost effective promotion
components.
2. Percent of64 sales
The budget is usually calculated as a percent of sales and the percentage figure is usually based
on past expenditure patterns. However, this method fails to recognize that promotion efforts

and results are related. For instance a budget of 15% sales may be too much or not enough to
achieve forecasted sales. Using this method can lead to too much spending on promotion when
sales are high and too little when sales are low.
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3. Competitive parity
This method is guided by how much your competitor spent. The short coming of this method
is the differences in marketing strategies between competing firms which may require differe nt
promotion strategies e.g. Safaricom and Airtel. Their budget is likely to differ because of the
target audience, promotion objectives and different promotion components.
4. All you can afford
Some companies have budget limits and top management can specify on how much to spent
on promotion. For instance a company’s objective may be to increase the budget to 110% of
last year’s actual promotion expenditures. The task priorities are set and budget allocated to
the high priority tasks because of the budget limitation due to financial constraints within the
organization.
5. Historical
Methods of budgeting – bottoms up (compiles a budget from the lowest to the highest level in
the department
Example of a Budget:
BUDGET OF WEZESHA RECRUITMENT FIRM
Budget Cost
Quantity
Cost in
Kenya Shs.
Total
in
Kenya
Shs.
Material cost
a. Renting space 1 30,000 30,000
 Goodwill 300,000 300,000

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 Chairs
10
1000 10000
 Tables
2
5,000 10000
 Stationary(pens)
10
25 250
 Cabinet 1 96000 96000
 Curtains 2 500 1000
 Files 10 20 200
 Computer 2 35,400 70800
b. Publicity materials
 T-shirts 50 450 22,500
 Caps 50 100 5000
 Banners 2 4,800 9600
 Wrist bands 50 50 2500
 Posters 4 50 200
 Brochures , Leaflets, Flyers 100 70 7000
c. Concert equipment(sound,
lighting)
1 70,000 70,000
2.Operation costs
a. Concert 1 100,000 100,000
b. News release 1 150,000 150,000
c. Launch 1 300,000 30000
d. Cocktail party 2 10000 200000
3.Human cost

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a. Hiring professional
 Dr. Akama ( Solace PR Firm) 30mins 25000 25000
 Kanze Dena(Media, Citizen
TV , News
anchor )
30mins 25000 25000
 Caro Mandi (Print Media;
True Love Editor)
30mins 25000 25000
 Solomon Fadhili (Flowe r
Advertising)
30mins 25000 25000
b. Entertainers
 Dj Tactics 6TIMES 10000 pe r
event
60000
 DK Kwenye Beat 1 30000 30000
 Gloria Muliro 1 30000 30000
 Size 8 1 30000 30000
 Sauti Sol 1 30000 30000
TOTAL 1,725,050

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REFFERENCES
Chaffey, D. & Wood, S. (2005), Business Information Management; Pearson Education.
Wattles, E & Frederick, J. (2009), Managing Organization’s Information Systems; Holloway
Press.
Cravens, W. D., & Piercy, F. N. (2003). Strategic Marketing. New York: McGraw Hill.
www.booksites.net/ManagementInformationSystems
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