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BUSINESS INFORMATION SYSTEM
(Module I)
Data
Data are raw facts or observation typically about a physical
phenomenon. Any raw facts used for processing is called data.
Information
The processed data are called information. Information will
have logical connection and it is meaningful.
Difference between data and information
Data Information
Raw facts and figures
unprocessed
Processed data
Data is sometimes unrelated
to one another.
Information will have some
logical connection.
It may or may not be
meaningful
It is always meaningful
It cannot directly used for
decision making.
Always used in decision
making process.
Unorganized structure. Organized structure.
No value. Have value.
Characteristics of information
1. Accuracy
2. Completeness
3. Timeliness
4. Relevance
5. Reliability
Types of information
1. Strategic information
This information used by the top level management. It is used
for long term purpose. This information is useful to the broad
objectives and policies of organizations.
2. Tactical information
This information is used by middle level management for
effective utilization of resources of the firm.
3. Operational information
This information is used by lower level management. This type
of information used for short term purpose.
Knowledge
Knowledge plays a vital role in day to day operation of running
an organisation. Knowledge can referred to as acquiring and
remembering a set of facts or the use of information to solve
problems.
Features of knowledge:
1. Knowledge is infinite.
2. Dynamic
3. Continuous and ever expanding.
4. Becomes obsolete.
5. Provisional, subject to criticism.
6. Contradiction, change or modification.
Types of knowledge
1. Explicit knowledge
It is the most basic form of knowledge that can be easily passed
on to others. When data is processed, organized, structured
and interpreted, the result is explicit knowledge.
2. Tactic knowledge
Tactic knowledge is personal knowledge that may or may not
be expressed by an individual.
Information and Communication Technology (ICT)
ICT is defined as the combination of informatics technology
with other related technologies, specifically communication
technology.
Information Technology
It is the study or use of systems for storing, retrieving and
sending information.
Types of communication devices
 Telephone
 Telegraph
 Telex
 E-mail
 Television
 Audio conferencing
 Video conferencing
 Document imaging
 Mobile phones
 Voice mail
Applications of ICT
1. ICT in business
2. ICT in financial services
3. ICT in entertainment
4. ICT in public service
5. ITC in education
Role of ICT in business / Significance of IT in business
 Global reach
 Productivity
 Commercial advantage
 Monitoring
 E-commerce
 Teleconference
 Communication
 Inventory management
 Image scanning
 Customer relationship management
Information System Ethics
It is a branch of ethics that focuses on the relationship between
creation, organisation, dissemination and use of information,
and the ethical standards and moral codes governing human
conduct in society.
Ethical issues in IT
 Misuse of personal information
 Misinformation
 Lack of oversight and acceptance of responsibilities
 Autonomous technology
Management Information System (MIS)
According to Gerome Kanter, “A system that aids management
in making, carrying out and controlling decisions.”
Characteristics/ features of MIS
1. Management oriented
2. Management directed
3. Integrated concept
4. Common data base
5. Avoid redundancy in database
6. Heavy planning
7. Subsystem concept
8. Common data flow
9. Flexibility and ease of use
Basic concepts of MIS
 User-machine system
 Integrated system
 Need for database
 Utilization of models
Basic components of MIS
1. Data gathering
2. Data entry
3. Data transformation
4. Information utilization
Elements of MIS
 Management
 Information
 System
Purpose/Objectives of MIS
1. To manage effectively
2. To reduce cost
3. To produce reports
4. To provide statistics
5. To provide information for decision making
6. To improve efficiency and productivity
7. To improve decision
8. Protection of crucial information
Functions of MIS
 Data capture and collection
 Storage
 Information processing
 Distribution and dissemination of information
MIS and other academic discipline
1. MIS and management accounting
2. MIS and management science
3. MIS and management theory
4. MIS and information technology
Advantages of MIS
 It facilitate planning
 It minimize information overload
 It encourage decentralization
 It brings coordination
 It makes control easier
 It helps in strategic planning
 It increase efficiency of business
 It helps in comparison of business performance
Disadvantages of MIS
 Lack of quality of output
 Not a Substitute for judgement
 No tailor made package
 Lack of flexibility
 Costly affair
 Ignoring non-quantitative factors
 Greater chance for failure
 Frequent changes to top management
 Hording of information
Basic structural concept of MIS
1. Public information system
It is a part of an organization and all the relevant persons have
knowledge about the information system and everyone has
access.
2. Private information system
It is maintained by privately where certain piece of information
are not available to others and there is a discrimination in file
accessing.
3. Formal information system
There is a certain well prescribed rules and procedures to be
followed processing and data dissemination.
4. Informal information system
There is no rules and procedures for data processing and
sharing.
5. Formal public information system
Management information system with its specified rules and
procedures is a part of formal public system
6. Informal public information system
Strict rules and procedures may not be found in this
information system.
7. Formal private information system
Besides these formal and informal system, there are also formal
and informal private system in an organization.
8. Private informal information system
Many individuals may maintain their own private information
system for discharging their duties more effectively.
Multiple approaches to the MIS structure
1. MIS structure based on operating elements.
2. MIS structure based on decision making.
3. MIS structure based on management activity.
4. MIS structure based on organizational functions.
1. MIS structure based on operating elements.
The structure of management information system can be
viewed in terms of its operating elements. The various
elements necessary for the operation of MIS is known as its
operating elements. Operating elements of MIS consists of
a) Physical components.
b) Processing functions.
c) Output for uses.
a) Physical components:
Hardware, Software, Database, procedures and operating
personnel are the important physical component required for
the implementation of MIS in an organisation.
Hardware: All physical components of computer system is
called computer hardware. Important components includes
CPU, input output device, storage unit and communication
devices.
Software: Software provides the interface between users and
information system. It refers to the instruction given to the
hardware to perform various operations. Software can be
divided in to two- system software and applications.
 System software- It comprises of operating system, utility
programs and special purpose programs.
 Application- These are developed to accomplish a specific
task.
Database: It is a centrally controlled collection of organized
data.
Procedures: Procedures are the operating instructions for the
people who use an information system.
Operating Personnel: People are needed for the operation of all
information systems. The personnel in MIS include computer
operators, programmers, system analyst and managers.
b. Processing function
An information system can also be described in terms of
processing function. The important processing functions are
a. Process transactions
b. Maintain master files.
c. Produce reports.
d. Process enquiries.
e. Process interactive support applications.
c. Output for users
Output is considered to be a major factor of an information
system. It can be classified as
a. Transaction documents
Documents produced by transaction processing system are
called transaction documents.
 Action documents- These document initiate an action or
transaction on the part of the recipient. Eg: Purchase order.
 Information documents- These documents relates, confirm
or prove to their recipients that transaction have occurred.
Eg: sales receipts, sales order confirmation.
 Investigational documents- Reports of exceptions, errors or
other conditions may be require investigation.
b. Preplanned reports
These have a regular format and content. These reports are
produced at regular intervals. Eg; Inventory balance and sales
analysis.
c. Preplanned enquiry response.
Enquiries are handled on line which means the enquiry is made
and the response is received immediately via terminal.
d. Ad hoc reports.
These reports are produced at irregular intervals and the
information content and its format has not been preplanned.
e. User machine dialogue.
It is essentially a way in which a user can interact with a model
to arrive at an analysis or solution.
2. MIS structure based on decision making
The ultimate purpose of MIS is to make decision at all levels of
operations based on information flow. The habit of making
decisions is based on the problem solving process.
Decisions making involves the following 4 stages:
 Intelligence phase: This stage consists of identifying and
understanding the problem occurring in an organisation.
 Design phase: In this stage decision makers evaluate all
possible causes of action.
 Choice phase: Under this stage, manager select most
favourable cause of action from different alternatives.
 Implementation: In this stage, decision is putting to effect.
Programmed decision (Structured decision)
It is the one in which decision rules are applied. These decisions
are routine and repetitive. It is also called structured decision.
Characteristics / Features of programmed decisions
1. These decisions are well defined.
2. These decisions are repetitive and routine in nature.
3. Cost of taking decision is low.
4. Decision can be done with the help of computers.
5. Decision can be delegated to lower level employees.
6. Predetermined decisions rules are used.
Non-programmable decision (Unstructured decision)
These types of decisions are occasional and unique in nature.
There are no predefined procedures available to solve the
problem for each occurrence. It is also called unstructured
decisions.
Characteristics / features of non-programmable decisions
1. These are occasional and unique in nature.
2. These are not repetitive.
3. No predefined procedures.
4. These decisions cannot be delegated.
5. Cost of taking decision is high.
3. MIS structure based on management activity
MIS provides useful information to different levels of
management for discharging their functions more effectively
and efficiently.
a. Strategic management: The first decision area of
management is strategic planning level or top level
management. It consists of board of directors and other chief
executives. They make the organizational goal, objectives,
strategies, policies etc.
b. Tactical management: Management control level or middle
level management decisions involve financial or personal
consideration. They develop medium range plans and
defining objectives of their departments.
c. Operational management: Operational management or
lower level management deals with routine activities. They
make short term plans to carry day to day activities more
effectively and efficiently.
4. MIS structure based on organizational functions
MIS is typically an integrated combination of functional
information system that is designed to meet information
requirement of the functional sub divisions of an organisation.
Functional sub systems:
 Production
 Marketing
 Human resource
 Finance and accounting
 Logistics
 Information processing.
Data redundancy
It occurs when the same piece of data is stored in two or more
separate places and it is a common occurrence in businesses.
Open system
Open systems are internal sub units that interact with other
systems, that are outside of the organisation.
Closed system
Closed system are the internal subunits of the organisation that
do not interact with external environment.
Sub system
It is a single, predefined operating environment through which
the system coordinates the workflow and resource use.
Office automation system
It is an information system which is computer based that
collects, processes, stores and transmits electronic messages.
Dissemination of information
It means to distribute it so that it reaches many people or
organisation.
Business Analytics
It is a set of disciplines and technologies for solving business
problems using data analysis, statistical model, and other
quantitative methods.
(Module II)
Types of MIS
1. Transaction processing system (TPS)
2. Decision support system (DSS)
3. Group decision support system
4. Executive information system (EIS)
5. Expert system (ES)
6. Management reporting system (MRS)
Transaction processing system (TPS)
It is the type of information system, that collect store modify
and retrieve daily transaction of an organization.
Features of TPS
 Rapid response
 Reliability
 Inflexibility
 Controlled access
 Distribution of information to other system
 Historical data
 Link with external environment
 Provide information to other functional systems
 Meet the requirement of operational level of firm
Components of TPS
1. Input
2. Storage
3. Output
Key properties of TPS
 Atomicity
 Consistency
 Isolation
 Durability
Transaction process cycle
1. Data entry
2. Transaction processing
3. Files and database processing
4. Document and report generation
5. Inquiry processing
Methods for processing transactions
 Batch processing
Batch processing transactions are collected and accumulated
over a period of time and processed periodically.
 Online processing
Transactions are entered on line, validated and processed
immediately and results are available immedietly.
 Data processing
Data is processed immedietly and provide immediate output to
users.
Decision support system (DSS)
A decision support system can be defined as a system that
provides information for making semi structured and
unstructured decisions.
Characteristics/ capabilities of DSS
1. Facilitates decision making
2. Support decision makers at any level
3. Meant for higher level management
4. Computers as well as judgement
5. Interaction
6. Task oriented
7. Repeated use
8. Identifiable
9. Quick response
10.Technology
Components of DSS
 Database
 Module base
 DSS software
 People resources
Functions of DSS
1. Quick response
2. Monitor and control function
3. User interface
Types of DSS
 Model-driven DSS
This type of DSS utalises model to perform different kinds of
analysis. Here decision are based on models.
 Data-driven DSS
It emphasis on collected data that is then manipulated to fit
decision makers need.
 Communication-driven DSS
In this decisions enabled by communicating and sharing
information between groups and people through web, client
server etc.
 Web based DSS
The term simply describes any DSS that is operated through the
interface of a web browser.
 Personal DSS
It is designed for individual in order to carry out daily work.
 Intelligent DSS
It helps the user to select right model based on the type of
problem being analyzed.
 Desktop DSS
It can stored in small computer system even in personal
computer.
 Knowledge-driven DSS
This type of DSS are personal computer system with special
rules used to solve problems.
 Document-driven DSS
In this type uses documents in a variety of data types. In this
type of DSS large volume of data are analyzed for decision
making.
Benefits of DSS
1. Help in solving time
2. Improve efficiency
3. Boost up interpersonal communication
4. Provide competitive advantage
5. Helps in reducing cost
6. High satisfaction among decision makers
7. Organisation control
Limitations of DSS
1. Computational problems
2. Low speed
3. Limited to individual us
Group decision support system (GDSS)
GDSS is an interactive computer based system to facilitate a
number of decision makers in finding solutions to problems
that are unstructured in nature.
Features of GDSS
 High level of interaction
 Criticism free idea generation
 Availability of information
 Stored information
 Decision on priorities
Components of GDSS
1. Decision makers
2. Database and model base
3. Groupware
Techniques of group decision making
1. Brain storming
It is a method of generating ideas and sharing knowledge to
solve a particular commercial or technical problem.
2. Nominal group techniques
It is a structured method for group brain storming that
encourages contributions from everyone and facilitate quick
agreement on the relative importance of problems.
3. Delphi method
It is a structured communication method, developed as a
systematic, interactive forecasting method relies on a panel of
experts.
Benefits of GDSS
1. Greater participation
2. Open and free atmosphere
3. No criticism
4. Pooling of knowledge
5. Personal development
6. Information to non-participant
Limitations of GDSS
1. Time consuming activity
2. Costly
3. No responsibility
4. Individual domination
Executive information system (EIS)
It is a type of management information system that facilitate
and supports senior executive information and decision making
needs.
Features of EIS
 It is meant for top level management
 Pervasive in nature
 Emphasis on external data
 Information in summary form
Components of EIS
1. Hardware
2. Software
3. Models and graphics
Benefits of EIS
1. Flexibility
2. Reduce information overload
3. Ability to analyze and compare
4. Monitoring performance
5. Improve the performance
Expert system
An expert system is a computer program that is designed to
solve complex problems and to provide decision making ability
like a human expert.
Components of expert system
 Hardware resources
 Software resources
 Knowledge base
 People resource
Advantages of expert system
1. Availability
2. Cheaper
3. Permanence
4. Knowledge based resource
5. Fast response
6. Use in risky environment
Limitations of expert system
1. Not for solving general problems
2. Costly
3. Most suitable to solve problem require knowledge and
subject thinking
Management reporting system (MRS)
It is a part of management information system that provides
business information. This information can be in the form of
report or statements.
Characteristics/ features of MRS
 Developed by professionals
 Large and complex
 No alternative solution
 Limited analytical capabilities
 Focus on past and present reporting
Types of reports
 Scheduled report
It is a report, which is produced at scheduled intervals. The
format is fixed in advance.
 Exception reports
It is a type of report, which is produced only when exceptional
situations.
 Demand/ Adhoc report
It is a type of report, which contain special information and
non-routine information.
Advantages of MRS
 Fast and effective report generation
 Improve performance and productivity
 Improved management decision making
 Competitive advantage
Artificial intelligence
It is the ability of a digital computer or computer controlled
robot to perform tasks commonly associated with intelligence
being.
(Module III)
Database
Data base is collection of data, integrated and organized into a
single comprehensive file system.
Necessity of a database
 Reduced data redundancy
 Reduced programming efforts
 Faster response time
 Data independence
 The ability to change
 Cost reductions
 Information protection
 Multi user support
Limitations of database
 Concurrency problem
 Ownership problem
 More resource required
 Security problem
Database management system (DBMS)
The software which is used to manage data base is called data
base management system. Examples; MySQL. Oracle etc.
Characteristics of DBMS
 Data stored into tables
 Less redundancy
 Consistency
 Multi users and concurrent access
 Multiple views
 Definition and description of data
 Security
 Query language
 Data persistence
Advantages of DBMS
1. Data independence
2. No redundant data
3. Efficient data access
4. Data integrity
5. Data security
6. Data administration
7. Concurrent access and crash recovery
8. Reduced application development time
9. Improved decision making
Disadvantages of DBMS
1. Not suitable for simple application
2. Complexity
3. Qualified personnel
4. Costly
5. Lower efficiency
Components of DBMS
 The database files
 The users
 A host language interface system
 The application programs
 Natural language interface system
 Data dictionary
 Online access and update terminals
 The output system or report generator
Data definition language (DDL)
It is used to define the structure of database. It is classified into
two logical and physical.
Logical structure
The logical structure of database is called schema. It refers to
way the user view the data.
Physical structure
It refers to the way data is physically stored.
Functions of DDL
 Description of schema or sub schema
 Description of data type and name
 Description of the keys
 Provide physical and data independence
Data manipulation language (DML)
It is a language used to manipulate data in the database. It
enable user to manipulate data, add new data, delete data and
modifying data.
Importance/Functions of DML
 To manipulate data such as adding. Deleting, modifying etc.
 Provide support for several high level language.
 Provides relationship between records.
 It permits the users and application of program to process
data on a symbolic logical base.
Database administrator (DBA)
DBA is a person who is responsible for defining, updating and
controlling access the database. It simply refers to a person
who manage the data.
Functions of DBA
1. Communicate with users
2. Granting of authorization of data access
3. Routine maintenance
4. Establishing standard and procedures
5. Ensuring database security and integrity
6. Backup and recovery
Types/ Structure/ Model/ Architecture of DBMS
1. Hierarchical database model
A hierarchical database model is a data model in which the data
are organized into a tree like structure. The data are stored as
records which are connected to one other through link.
Advantages of hierarchical model
 Simplicity
 Data security
 Data integrity
 Efficiency
Disadvantages of hierarchical model
 Implementation complexity
 Database management problem
 Lack of structural independence
2. Network database model
A network data base model is a database model that allows
multiple records to be linked to the same owner files.
Advantages of Network Model
 Conceptual simplicity
 Capability to handle more relationship types
 Easy to access
 Data independence
 Data integrity
Disadvantages of network database model
 System complexity
 Absence of structural independence
3. Relational database model
A relational database model is a model that stores and provides
access to data points that are related to one another.
Advantages of relational model
 Structural independence
 Conceptual simplicity
 Easy to design
 Easy to maintain and use
Disadvantages of relational model
 Hardware overheads
 Easy of design can lead to bad design
4. Object oriented database model
It is a type of database model, it is used to store variety of data
type including graphics, photographic, audio, video and text in
multimedia format.
Advantages of object oriented model
 Improved performance
 Improved reliability
 Flexibility
 Inheritance
 Capable of handling large variety of data
 Applicability to advanced database applications
Disadvantages of object oriented model
 Lack of theoretical foundation
 Lack of standard
 Lack of experience
 Competition
 Lack of support for security
5. Object relational model
It is a combination of object oriented database model and
relational database model. It is said to be the middleman
between relational and object oriented database.
Advantages of object relational model
 Extensibility
 Encapsulation
Disadvantages of object relational model
 Complexity
 Increased cost
6. Deductive/ Inferential database model
A deductive database is a database system that can make
deductions based on rules and facts stored in the database.
7. Logical database model
A logical database model establishes the structure of data
elements and the relationship among them. It is independent of
the physical database.
Relational database management system (RDBMS)
Relational database management system is a type of database
management system that stores data in a row based table
structure which connects related data elements.
Features of RDBMS
 Provide data to be stored in tables
 Persist data in the form of rows and columns
 Provide multi user accessibility
 Sharing common columns into two or more tables
Terminologies of RDBMS
Relation
It means table. Relational database have several interrelated
tables each table called relation.
Domain
Each column of a relational table is defined on a domain. A
domain is a set of values.
Attributes
Columns of the table are called attributes. It is also called
database field.
Tuple
Row of the table are called tuple.
Cardinality
The number of raws in the relation is called cardinality
Degree
The number of attributes in a relation is called degree.
Keys
It is an attribute which is used to identify data in database
Benefits of RDBMS
 Data entry, updates and deletion will be effective.
 Easy reporting
 Data retrieval
 Database follows a well formulated model
 Changes in database schema are easy to make
Keys in RDBMS
Primary key
A primary key is the column or columns that contain values that
uniquely identify each row in a table.
Foreign key
A foreign key is a column or set of columns in a table whose
values correspond to the values of the primary key in another
table.
Candidate key
A candidate key is a specific type of field in a relational
database that can identify each unique record independently of
any other data.
Alternate key
Alternate key or secondary key is the key that has not been
selected to be the primary key but are candidate keys. It is
considered a candidate key for the primary key.
Super key
A set of attributes that can uniquely identify a tuple is known as
super key.
Data Dictionary
It is a tool for arranging and storing information about the data
maintained in the database.
Data Mining
It is the practice of analysing the large database in order to
generate new information.
Data warehouse
It is a central repository of information that can be analysed to
make more informed decision.
(Module IV)
Enterprise Resource Planning (ERP)
ERP refers to a type of software that organizations use to
manage day to day business activities such as accounting.
Procurement. Project management and supply chain
management.
Material requirement planning (MRP)
MRP is a production planning, scheduling and inventory control
system used to manage manufacturing processes
Features of ERP
 Flexibility
 Modular and open
 Comprehensive
 Extensibility
 Customization capabilities
 Customer relation management
 Resource management
 Simulation of reality
Need for ERP in business
1. Business integration
2. Flexibility
3. Better decision making
4. Use latest technology
5. Standardize and speed up manufacturing process
6. Standardized HR information
7. Reduced manpower cost
8. Reduced inventory and inventory cost
9. Reduce material cost
10. Improve sales and customer service
11. Efficient financial management
Benefits of ERP
 Single software
 Single reporting
 Smooth workflow
 Complete visibility
 E-commerce
 Extension
 Easy tracking
 Different modules
 Flexibility
 Centralized storage
 More secure
 Global management
 Improved customer service
 Reduced set up time
 Higher quality
 Timely debt collection
Disadvantages of ERP system
 Costly
 Time consuming
 Difficult to measure the result
 Problem customization
 Difficult to learn
 Migration of data
 Dependence on vendor
 Difficult to achieve decentralization
 Need greater care in evaluation
ERP software
 SAP
 Oracle application
 People soft
 Baan ERP
 One world
Modules of ERP
 Production planning module
 Purchasing module
 Sales module
 Manufacturing module
 Inventory control module
 Finance and accounting module
 HR module
Steps/ phases in implementing ERP
1. Project planning phase
2. Pre-evaluation screening
3. Package evaluation
4. Gap analysis
5. Business process reengineering
6. Installation and configuration
7. Project team screening
8. System testing
9. Go live and support
10. End user training
11. Post implementation
ERP implementation methodologies
 The big bang
Big bang is the most ambitious and difficult of approach to ERP
implementation. According to this system companies abandon
their old system at once and install a single ERP system across
the entire company.
 Modular implementation
This has been the most commonly used methodology of ERP
implementation. As per this method, one ERP module is
implemented at a time.
 Slam dunk
It is used for smaller companies expect to grow into ERP. This
method of implementation ERP is implemented in one or a few
critical processes which involves a few business unit.
Issues/ challenges in the implementation of ERP
1. Rapid implementation
2. Complexity in operation
3. Overrun budgets
4. Lack of training
5. Lack of proper requirement analysis
6. Lack of support from senior management
7. Compatibility issues
8. Cost burden
9. Inadequate investment in infrastructure
10. Human related issues
11. Poor project management.
Name of ERP Software Companies
1. SAP
2. NetSuite
3. Tallyprime
4. Acumatica
5. Sageintacct
Cloud Computing
It is a practice of using a network of remote servers hosted on
the internet to store, manage and process data rather than a
local server or a personal computer.
(Module V)
Business process re-engineering (BPR)
BPR is the analysis and redesigning of core business processes
to achieve the substantial improvement in its performance,
productivity and quality.
Need and objectives of BPR
 Changing nature of business operations
 Cost and cycle time reduction
 Promotes quality
 Impatient and demanding customers
 Increased efficiency
 Better results and products
Process of BPR
1. Create business vision and define goal
2. Develop the process team
3. Identification of business process
4. Selection of business process
5. Understanding of selected business process
6. Re-design the selected business process
7. Design and build a prototype of the process
8. Implementation of re-designed business process
Advantages of BPR
 Drastic changes
 Quality improvement
 Quick response
 Change in the corporate culture
 Focus on customer
 Greater competitiveness
 Cost reduction
 Abandon conventional approaches to problem solving
Issues and problems of BPR
 Lack of proper knowledge of reengineering
 Lack of training
 Lack of support from employees
 Lack of adequate resources
 Lack of employee awareness
 Unsatisfactory appraisal system
 Delay due to detailed process analysis
 Delay in achieving results
 Improper monitoring
 Inability to measure improvement
Subsystem
A subsystem is a single, predefined operating environment
through which the system co-ordinates the work flow and
resource use.
Data dictionary
A data dictionary is a file or set of files that contains a
databases metadata.
Gap analysis
It is the process which companies create a complete model of
where they are now and in which direction they are want to go
in future.
Online processing
Online processing is an automated way to enter and process
data or reports continuously as use as the source of document
are available
Big bang implementation
Big bang ERP implementation is used to describe a go live
scenario where a business switches from its existing system to a
new solution at a single point in time.
Prepared By:
JUBAIR MAJEED
8089778065 (WhatsApp)

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BIS-bit (1).pdf

  • 1. BUSINESS INFORMATION SYSTEM (Module I) Data Data are raw facts or observation typically about a physical phenomenon. Any raw facts used for processing is called data. Information The processed data are called information. Information will have logical connection and it is meaningful. Difference between data and information Data Information Raw facts and figures unprocessed Processed data Data is sometimes unrelated to one another. Information will have some logical connection. It may or may not be meaningful It is always meaningful It cannot directly used for decision making. Always used in decision making process. Unorganized structure. Organized structure. No value. Have value. Characteristics of information 1. Accuracy 2. Completeness 3. Timeliness 4. Relevance 5. Reliability Types of information 1. Strategic information This information used by the top level management. It is used for long term purpose. This information is useful to the broad objectives and policies of organizations. 2. Tactical information This information is used by middle level management for effective utilization of resources of the firm. 3. Operational information This information is used by lower level management. This type of information used for short term purpose. Knowledge Knowledge plays a vital role in day to day operation of running an organisation. Knowledge can referred to as acquiring and remembering a set of facts or the use of information to solve problems. Features of knowledge: 1. Knowledge is infinite. 2. Dynamic 3. Continuous and ever expanding. 4. Becomes obsolete. 5. Provisional, subject to criticism. 6. Contradiction, change or modification. Types of knowledge 1. Explicit knowledge It is the most basic form of knowledge that can be easily passed on to others. When data is processed, organized, structured and interpreted, the result is explicit knowledge. 2. Tactic knowledge Tactic knowledge is personal knowledge that may or may not be expressed by an individual. Information and Communication Technology (ICT) ICT is defined as the combination of informatics technology with other related technologies, specifically communication technology. Information Technology It is the study or use of systems for storing, retrieving and sending information. Types of communication devices  Telephone  Telegraph  Telex  E-mail  Television  Audio conferencing  Video conferencing  Document imaging  Mobile phones  Voice mail Applications of ICT 1. ICT in business 2. ICT in financial services 3. ICT in entertainment 4. ICT in public service 5. ITC in education Role of ICT in business / Significance of IT in business  Global reach  Productivity  Commercial advantage  Monitoring  E-commerce  Teleconference  Communication  Inventory management  Image scanning  Customer relationship management Information System Ethics It is a branch of ethics that focuses on the relationship between creation, organisation, dissemination and use of information, and the ethical standards and moral codes governing human conduct in society. Ethical issues in IT  Misuse of personal information  Misinformation  Lack of oversight and acceptance of responsibilities  Autonomous technology Management Information System (MIS) According to Gerome Kanter, “A system that aids management in making, carrying out and controlling decisions.” Characteristics/ features of MIS 1. Management oriented 2. Management directed 3. Integrated concept 4. Common data base 5. Avoid redundancy in database 6. Heavy planning 7. Subsystem concept 8. Common data flow 9. Flexibility and ease of use Basic concepts of MIS  User-machine system  Integrated system  Need for database  Utilization of models Basic components of MIS 1. Data gathering 2. Data entry 3. Data transformation 4. Information utilization Elements of MIS  Management  Information  System Purpose/Objectives of MIS 1. To manage effectively 2. To reduce cost 3. To produce reports 4. To provide statistics 5. To provide information for decision making 6. To improve efficiency and productivity 7. To improve decision 8. Protection of crucial information Functions of MIS  Data capture and collection  Storage  Information processing  Distribution and dissemination of information MIS and other academic discipline 1. MIS and management accounting 2. MIS and management science 3. MIS and management theory 4. MIS and information technology Advantages of MIS  It facilitate planning  It minimize information overload  It encourage decentralization  It brings coordination  It makes control easier  It helps in strategic planning  It increase efficiency of business  It helps in comparison of business performance Disadvantages of MIS  Lack of quality of output  Not a Substitute for judgement  No tailor made package  Lack of flexibility  Costly affair  Ignoring non-quantitative factors  Greater chance for failure  Frequent changes to top management  Hording of information Basic structural concept of MIS 1. Public information system It is a part of an organization and all the relevant persons have knowledge about the information system and everyone has access. 2. Private information system It is maintained by privately where certain piece of information are not available to others and there is a discrimination in file accessing. 3. Formal information system There is a certain well prescribed rules and procedures to be followed processing and data dissemination. 4. Informal information system There is no rules and procedures for data processing and sharing. 5. Formal public information system Management information system with its specified rules and procedures is a part of formal public system 6. Informal public information system Strict rules and procedures may not be found in this information system. 7. Formal private information system Besides these formal and informal system, there are also formal and informal private system in an organization. 8. Private informal information system Many individuals may maintain their own private information system for discharging their duties more effectively. Multiple approaches to the MIS structure 1. MIS structure based on operating elements. 2. MIS structure based on decision making. 3. MIS structure based on management activity. 4. MIS structure based on organizational functions. 1. MIS structure based on operating elements. The structure of management information system can be viewed in terms of its operating elements. The various elements necessary for the operation of MIS is known as its operating elements. Operating elements of MIS consists of a) Physical components. b) Processing functions. c) Output for uses. a) Physical components: Hardware, Software, Database, procedures and operating personnel are the important physical component required for the implementation of MIS in an organisation. Hardware: All physical components of computer system is called computer hardware. Important components includes CPU, input output device, storage unit and communication devices. Software: Software provides the interface between users and information system. It refers to the instruction given to the hardware to perform various operations. Software can be divided in to two- system software and applications.  System software- It comprises of operating system, utility programs and special purpose programs.  Application- These are developed to accomplish a specific task. Database: It is a centrally controlled collection of organized data. Procedures: Procedures are the operating instructions for the people who use an information system. Operating Personnel: People are needed for the operation of all information systems. The personnel in MIS include computer operators, programmers, system analyst and managers. b. Processing function An information system can also be described in terms of processing function. The important processing functions are a. Process transactions b. Maintain master files. c. Produce reports. d. Process enquiries. e. Process interactive support applications. c. Output for users Output is considered to be a major factor of an information system. It can be classified as a. Transaction documents Documents produced by transaction processing system are called transaction documents.  Action documents- These document initiate an action or transaction on the part of the recipient. Eg: Purchase order.  Information documents- These documents relates, confirm or prove to their recipients that transaction have occurred. Eg: sales receipts, sales order confirmation.  Investigational documents- Reports of exceptions, errors or other conditions may be require investigation.
  • 2. b. Preplanned reports These have a regular format and content. These reports are produced at regular intervals. Eg; Inventory balance and sales analysis. c. Preplanned enquiry response. Enquiries are handled on line which means the enquiry is made and the response is received immediately via terminal. d. Ad hoc reports. These reports are produced at irregular intervals and the information content and its format has not been preplanned. e. User machine dialogue. It is essentially a way in which a user can interact with a model to arrive at an analysis or solution. 2. MIS structure based on decision making The ultimate purpose of MIS is to make decision at all levels of operations based on information flow. The habit of making decisions is based on the problem solving process. Decisions making involves the following 4 stages:  Intelligence phase: This stage consists of identifying and understanding the problem occurring in an organisation.  Design phase: In this stage decision makers evaluate all possible causes of action.  Choice phase: Under this stage, manager select most favourable cause of action from different alternatives.  Implementation: In this stage, decision is putting to effect. Programmed decision (Structured decision) It is the one in which decision rules are applied. These decisions are routine and repetitive. It is also called structured decision. Characteristics / Features of programmed decisions 1. These decisions are well defined. 2. These decisions are repetitive and routine in nature. 3. Cost of taking decision is low. 4. Decision can be done with the help of computers. 5. Decision can be delegated to lower level employees. 6. Predetermined decisions rules are used. Non-programmable decision (Unstructured decision) These types of decisions are occasional and unique in nature. There are no predefined procedures available to solve the problem for each occurrence. It is also called unstructured decisions. Characteristics / features of non-programmable decisions 1. These are occasional and unique in nature. 2. These are not repetitive. 3. No predefined procedures. 4. These decisions cannot be delegated. 5. Cost of taking decision is high. 3. MIS structure based on management activity MIS provides useful information to different levels of management for discharging their functions more effectively and efficiently. a. Strategic management: The first decision area of management is strategic planning level or top level management. It consists of board of directors and other chief executives. They make the organizational goal, objectives, strategies, policies etc. b. Tactical management: Management control level or middle level management decisions involve financial or personal consideration. They develop medium range plans and defining objectives of their departments. c. Operational management: Operational management or lower level management deals with routine activities. They make short term plans to carry day to day activities more effectively and efficiently. 4. MIS structure based on organizational functions MIS is typically an integrated combination of functional information system that is designed to meet information requirement of the functional sub divisions of an organisation. Functional sub systems:  Production  Marketing  Human resource  Finance and accounting  Logistics  Information processing. Data redundancy It occurs when the same piece of data is stored in two or more separate places and it is a common occurrence in businesses. Open system Open systems are internal sub units that interact with other systems, that are outside of the organisation. Closed system Closed system are the internal subunits of the organisation that do not interact with external environment. Sub system It is a single, predefined operating environment through which the system coordinates the workflow and resource use. Office automation system It is an information system which is computer based that collects, processes, stores and transmits electronic messages. Dissemination of information It means to distribute it so that it reaches many people or organisation. Business Analytics It is a set of disciplines and technologies for solving business problems using data analysis, statistical model, and other quantitative methods. (Module II) Types of MIS 1. Transaction processing system (TPS) 2. Decision support system (DSS) 3. Group decision support system 4. Executive information system (EIS) 5. Expert system (ES) 6. Management reporting system (MRS) Transaction processing system (TPS) It is the type of information system, that collect store modify and retrieve daily transaction of an organization. Features of TPS  Rapid response  Reliability  Inflexibility  Controlled access  Distribution of information to other system  Historical data  Link with external environment  Provide information to other functional systems  Meet the requirement of operational level of firm Components of TPS 1. Input 2. Storage 3. Output Key properties of TPS  Atomicity  Consistency  Isolation  Durability Transaction process cycle 1. Data entry 2. Transaction processing 3. Files and database processing 4. Document and report generation 5. Inquiry processing Methods for processing transactions  Batch processing Batch processing transactions are collected and accumulated over a period of time and processed periodically.  Online processing Transactions are entered on line, validated and processed immediately and results are available immedietly.  Data processing Data is processed immedietly and provide immediate output to users. Decision support system (DSS) A decision support system can be defined as a system that provides information for making semi structured and unstructured decisions. Characteristics/ capabilities of DSS 1. Facilitates decision making 2. Support decision makers at any level 3. Meant for higher level management 4. Computers as well as judgement 5. Interaction 6. Task oriented 7. Repeated use 8. Identifiable 9. Quick response 10.Technology Components of DSS  Database  Module base  DSS software  People resources Functions of DSS 1. Quick response 2. Monitor and control function 3. User interface Types of DSS  Model-driven DSS This type of DSS utalises model to perform different kinds of analysis. Here decision are based on models.  Data-driven DSS It emphasis on collected data that is then manipulated to fit decision makers need.  Communication-driven DSS In this decisions enabled by communicating and sharing information between groups and people through web, client server etc.  Web based DSS The term simply describes any DSS that is operated through the interface of a web browser.  Personal DSS It is designed for individual in order to carry out daily work.  Intelligent DSS It helps the user to select right model based on the type of problem being analyzed.  Desktop DSS It can stored in small computer system even in personal computer.  Knowledge-driven DSS This type of DSS are personal computer system with special rules used to solve problems.  Document-driven DSS In this type uses documents in a variety of data types. In this type of DSS large volume of data are analyzed for decision making. Benefits of DSS 1. Help in solving time 2. Improve efficiency 3. Boost up interpersonal communication 4. Provide competitive advantage 5. Helps in reducing cost 6. High satisfaction among decision makers 7. Organisation control Limitations of DSS 1. Computational problems 2. Low speed 3. Limited to individual us Group decision support system (GDSS) GDSS is an interactive computer based system to facilitate a number of decision makers in finding solutions to problems that are unstructured in nature. Features of GDSS  High level of interaction  Criticism free idea generation  Availability of information  Stored information  Decision on priorities Components of GDSS 1. Decision makers 2. Database and model base 3. Groupware Techniques of group decision making 1. Brain storming It is a method of generating ideas and sharing knowledge to solve a particular commercial or technical problem. 2. Nominal group techniques It is a structured method for group brain storming that encourages contributions from everyone and facilitate quick agreement on the relative importance of problems. 3. Delphi method It is a structured communication method, developed as a systematic, interactive forecasting method relies on a panel of experts. Benefits of GDSS 1. Greater participation 2. Open and free atmosphere 3. No criticism 4. Pooling of knowledge 5. Personal development 6. Information to non-participant Limitations of GDSS 1. Time consuming activity 2. Costly 3. No responsibility 4. Individual domination Executive information system (EIS) It is a type of management information system that facilitate and supports senior executive information and decision making needs. Features of EIS  It is meant for top level management  Pervasive in nature  Emphasis on external data  Information in summary form
  • 3. Components of EIS 1. Hardware 2. Software 3. Models and graphics Benefits of EIS 1. Flexibility 2. Reduce information overload 3. Ability to analyze and compare 4. Monitoring performance 5. Improve the performance Expert system An expert system is a computer program that is designed to solve complex problems and to provide decision making ability like a human expert. Components of expert system  Hardware resources  Software resources  Knowledge base  People resource Advantages of expert system 1. Availability 2. Cheaper 3. Permanence 4. Knowledge based resource 5. Fast response 6. Use in risky environment Limitations of expert system 1. Not for solving general problems 2. Costly 3. Most suitable to solve problem require knowledge and subject thinking Management reporting system (MRS) It is a part of management information system that provides business information. This information can be in the form of report or statements. Characteristics/ features of MRS  Developed by professionals  Large and complex  No alternative solution  Limited analytical capabilities  Focus on past and present reporting Types of reports  Scheduled report It is a report, which is produced at scheduled intervals. The format is fixed in advance.  Exception reports It is a type of report, which is produced only when exceptional situations.  Demand/ Adhoc report It is a type of report, which contain special information and non-routine information. Advantages of MRS  Fast and effective report generation  Improve performance and productivity  Improved management decision making  Competitive advantage Artificial intelligence It is the ability of a digital computer or computer controlled robot to perform tasks commonly associated with intelligence being. (Module III) Database Data base is collection of data, integrated and organized into a single comprehensive file system. Necessity of a database  Reduced data redundancy  Reduced programming efforts  Faster response time  Data independence  The ability to change  Cost reductions  Information protection  Multi user support Limitations of database  Concurrency problem  Ownership problem  More resource required  Security problem Database management system (DBMS) The software which is used to manage data base is called data base management system. Examples; MySQL. Oracle etc. Characteristics of DBMS  Data stored into tables  Less redundancy  Consistency  Multi users and concurrent access  Multiple views  Definition and description of data  Security  Query language  Data persistence Advantages of DBMS 1. Data independence 2. No redundant data 3. Efficient data access 4. Data integrity 5. Data security 6. Data administration 7. Concurrent access and crash recovery 8. Reduced application development time 9. Improved decision making Disadvantages of DBMS 1. Not suitable for simple application 2. Complexity 3. Qualified personnel 4. Costly 5. Lower efficiency Components of DBMS  The database files  The users  A host language interface system  The application programs  Natural language interface system  Data dictionary  Online access and update terminals  The output system or report generator Data definition language (DDL) It is used to define the structure of database. It is classified into two logical and physical. Logical structure The logical structure of database is called schema. It refers to way the user view the data. Physical structure It refers to the way data is physically stored. Functions of DDL  Description of schema or sub schema  Description of data type and name  Description of the keys  Provide physical and data independence Data manipulation language (DML) It is a language used to manipulate data in the database. It enable user to manipulate data, add new data, delete data and modifying data. Importance/Functions of DML  To manipulate data such as adding. Deleting, modifying etc.  Provide support for several high level language.  Provides relationship between records.  It permits the users and application of program to process data on a symbolic logical base. Database administrator (DBA) DBA is a person who is responsible for defining, updating and controlling access the database. It simply refers to a person who manage the data. Functions of DBA 1. Communicate with users 2. Granting of authorization of data access 3. Routine maintenance 4. Establishing standard and procedures 5. Ensuring database security and integrity 6. Backup and recovery Types/ Structure/ Model/ Architecture of DBMS 1. Hierarchical database model A hierarchical database model is a data model in which the data are organized into a tree like structure. The data are stored as records which are connected to one other through link. Advantages of hierarchical model  Simplicity  Data security  Data integrity  Efficiency Disadvantages of hierarchical model  Implementation complexity  Database management problem  Lack of structural independence 2. Network database model A network data base model is a database model that allows multiple records to be linked to the same owner files. Advantages of Network Model  Conceptual simplicity  Capability to handle more relationship types  Easy to access  Data independence  Data integrity Disadvantages of network database model  System complexity  Absence of structural independence 3. Relational database model A relational database model is a model that stores and provides access to data points that are related to one another. Advantages of relational model  Structural independence  Conceptual simplicity  Easy to design  Easy to maintain and use Disadvantages of relational model  Hardware overheads  Easy of design can lead to bad design 4. Object oriented database model It is a type of database model, it is used to store variety of data type including graphics, photographic, audio, video and text in multimedia format. Advantages of object oriented model  Improved performance  Improved reliability  Flexibility  Inheritance  Capable of handling large variety of data  Applicability to advanced database applications Disadvantages of object oriented model  Lack of theoretical foundation  Lack of standard  Lack of experience  Competition  Lack of support for security 5. Object relational model It is a combination of object oriented database model and relational database model. It is said to be the middleman between relational and object oriented database. Advantages of object relational model  Extensibility  Encapsulation Disadvantages of object relational model  Complexity  Increased cost 6. Deductive/ Inferential database model A deductive database is a database system that can make deductions based on rules and facts stored in the database. 7. Logical database model A logical database model establishes the structure of data elements and the relationship among them. It is independent of the physical database. Relational database management system (RDBMS) Relational database management system is a type of database management system that stores data in a row based table structure which connects related data elements. Features of RDBMS  Provide data to be stored in tables  Persist data in the form of rows and columns  Provide multi user accessibility  Sharing common columns into two or more tables Terminologies of RDBMS Relation It means table. Relational database have several interrelated tables each table called relation. Domain Each column of a relational table is defined on a domain. A domain is a set of values. Attributes Columns of the table are called attributes. It is also called database field. Tuple Row of the table are called tuple. Cardinality The number of raws in the relation is called cardinality Degree The number of attributes in a relation is called degree. Keys It is an attribute which is used to identify data in database Benefits of RDBMS  Data entry, updates and deletion will be effective.
  • 4.  Easy reporting  Data retrieval  Database follows a well formulated model  Changes in database schema are easy to make Keys in RDBMS Primary key A primary key is the column or columns that contain values that uniquely identify each row in a table. Foreign key A foreign key is a column or set of columns in a table whose values correspond to the values of the primary key in another table. Candidate key A candidate key is a specific type of field in a relational database that can identify each unique record independently of any other data. Alternate key Alternate key or secondary key is the key that has not been selected to be the primary key but are candidate keys. It is considered a candidate key for the primary key. Super key A set of attributes that can uniquely identify a tuple is known as super key. Data Dictionary It is a tool for arranging and storing information about the data maintained in the database. Data Mining It is the practice of analysing the large database in order to generate new information. Data warehouse It is a central repository of information that can be analysed to make more informed decision. (Module IV) Enterprise Resource Planning (ERP) ERP refers to a type of software that organizations use to manage day to day business activities such as accounting. Procurement. Project management and supply chain management. Material requirement planning (MRP) MRP is a production planning, scheduling and inventory control system used to manage manufacturing processes Features of ERP  Flexibility  Modular and open  Comprehensive  Extensibility  Customization capabilities  Customer relation management  Resource management  Simulation of reality Need for ERP in business 1. Business integration 2. Flexibility 3. Better decision making 4. Use latest technology 5. Standardize and speed up manufacturing process 6. Standardized HR information 7. Reduced manpower cost 8. Reduced inventory and inventory cost 9. Reduce material cost 10. Improve sales and customer service 11. Efficient financial management Benefits of ERP  Single software  Single reporting  Smooth workflow  Complete visibility  E-commerce  Extension  Easy tracking  Different modules  Flexibility  Centralized storage  More secure  Global management  Improved customer service  Reduced set up time  Higher quality  Timely debt collection Disadvantages of ERP system  Costly  Time consuming  Difficult to measure the result  Problem customization  Difficult to learn  Migration of data  Dependence on vendor  Difficult to achieve decentralization  Need greater care in evaluation ERP software  SAP  Oracle application  People soft  Baan ERP  One world Modules of ERP  Production planning module  Purchasing module  Sales module  Manufacturing module  Inventory control module  Finance and accounting module  HR module Steps/ phases in implementing ERP 1. Project planning phase 2. Pre-evaluation screening 3. Package evaluation 4. Gap analysis 5. Business process reengineering 6. Installation and configuration 7. Project team screening 8. System testing 9. Go live and support 10. End user training 11. Post implementation ERP implementation methodologies  The big bang Big bang is the most ambitious and difficult of approach to ERP implementation. According to this system companies abandon their old system at once and install a single ERP system across the entire company.  Modular implementation This has been the most commonly used methodology of ERP implementation. As per this method, one ERP module is implemented at a time.  Slam dunk It is used for smaller companies expect to grow into ERP. This method of implementation ERP is implemented in one or a few critical processes which involves a few business unit. Issues/ challenges in the implementation of ERP 1. Rapid implementation 2. Complexity in operation 3. Overrun budgets 4. Lack of training 5. Lack of proper requirement analysis 6. Lack of support from senior management 7. Compatibility issues 8. Cost burden 9. Inadequate investment in infrastructure 10. Human related issues 11. Poor project management. Name of ERP Software Companies 1. SAP 2. NetSuite 3. Tallyprime 4. Acumatica 5. Sageintacct Cloud Computing It is a practice of using a network of remote servers hosted on the internet to store, manage and process data rather than a local server or a personal computer. (Module V) Business process re-engineering (BPR) BPR is the analysis and redesigning of core business processes to achieve the substantial improvement in its performance, productivity and quality. Need and objectives of BPR  Changing nature of business operations  Cost and cycle time reduction  Promotes quality  Impatient and demanding customers  Increased efficiency  Better results and products Process of BPR 1. Create business vision and define goal 2. Develop the process team 3. Identification of business process 4. Selection of business process 5. Understanding of selected business process 6. Re-design the selected business process 7. Design and build a prototype of the process 8. Implementation of re-designed business process Advantages of BPR  Drastic changes  Quality improvement  Quick response  Change in the corporate culture  Focus on customer  Greater competitiveness  Cost reduction  Abandon conventional approaches to problem solving Issues and problems of BPR  Lack of proper knowledge of reengineering  Lack of training  Lack of support from employees  Lack of adequate resources  Lack of employee awareness  Unsatisfactory appraisal system  Delay due to detailed process analysis  Delay in achieving results  Improper monitoring  Inability to measure improvement Subsystem A subsystem is a single, predefined operating environment through which the system co-ordinates the work flow and resource use. Data dictionary A data dictionary is a file or set of files that contains a databases metadata. Gap analysis It is the process which companies create a complete model of where they are now and in which direction they are want to go in future. Online processing Online processing is an automated way to enter and process data or reports continuously as use as the source of document are available Big bang implementation Big bang ERP implementation is used to describe a go live scenario where a business switches from its existing system to a new solution at a single point in time. Prepared By: JUBAIR MAJEED 8089778065 (WhatsApp)