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
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