MB0047 Management Information Systems Set 2

7/28/2019 MB0047 Management Information Systems Set 2

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MBA Semester II

Assignment 2 - Marks 60 (6X10=60)

MB0047 - Management Information Systems - 4 credits

Subject Code - MB0047

*** Please fill in all the details in complete and only in CAPITAL letters

Registration Number


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Q1. How hardware & software support in various MIS activities of the organization? Explain thetransaction stages from manual system to automated systems?

Ans 1.

Hardware support for MIS

Generally hardware in the form of personal computers and peripherals like printers, fax

machines, copier, scanners etc are used in organization to support various MIS activities of the

organization.

Advantages of a PC :Advantages a personal computer offers are

a) Speed

A PC can process data at a very high speed. It can process millions of instructions within

fraction of seconds.

b) Storage

A PC can store large quantity of data in a small space. It eliminates the need of storing the

conventional office flat files and box files which requires lots of space. The storage system in a

PC is such that the information can be transferred from place to another place in electronic form.

c) Communication

A PC on the network can offer great support as a communicator in communicating information inthe forms of text and images. Today a PC with internet issued as a powerful tool

of communication for every business activity.

d) Accuracy

A PC is highly reliable in the sense that it could be used to perform calculations continuously for

hours with a great degree of accuracy. It is possible to obtain mathematical results correct up to

a great degree of accuracy.

e) Conferencing

A PC with internet offers facility of video conferencing worldwide. Business people across the

globe travel a lot to meet their business partner, colleagues, and customers etc to discuss

about business activities. By video conferencing in convenience of traveling can be avoided. A


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block diagram of a computer may be represented as Input unit is used to give input to the

processor. Examples of input unit Keyboard, scanner, mouse, bar code reader etc.

A processor refers to unit which processes the input received the way it has been instructed. In

a computer the processor is the CPU Central Processing Unit. It does all mathematical

calculations, logical tasks, storing details in the memory etc. Output unit is used to give output s

from the computer. Examples of output unit Monitor, printer, speakers etc.

Organization of Business in an E enterprise Software Applications in MIS

Internet technology is creating a universal bench or platform for buying and selling of goods,

commodities and services. Essentially Internet and networks enable integration of information,

facilitate communication, and provide access to everybody from anywhere. And software

solutions make them faster and self-reliant as they can analyze data information, interpret and

use rules and guidelines for decision-making. These enabling capabilities of technology have

given rise to four business models that together work in an E enterprise organization. They are:

1. E business

2. E communication

3. E commerce

4. E collaboration

These models work successfully because Internet technology provides the infrastructure for

running the entire business process of any length. It also provides email and other

communication capabilities to plan, track, monitor and control the business operations through

the workers located anywhere. It is capable of linking to disparate systems such as logistics,

data acquisition and radio frequency used systems and so on. Low cost connectivity physical,

virtual and universal standards of Internet technology make it a driving force to change

conventional business model to E business enterprise model.

Internet has enabled organizations to change their business process and practices. It has

dramatically reduced cost of data and information processing, its sending and storing.

Information and information products are available in electronic media, and is a

residenton the network. Once everyone is connected electronically, information can flow

seamlessly from any location to any other location. For example, product information is available

on an organization website which also has a feature of order placement. An

order placed is processed at the backend and status of acceptance, rejection is communicated

instantaneously to the customer. Such order is then placed directly on the order board for

scheduling and execution. These basic capabilities of Internet have given rise to number of

business models.

Input Unit Processor Output Unit


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The Internet and networks provide platform and various capabilities wherebycommunication, coll

aboration, and conversion has become significantly faster,transparent and cheaper. These

technologies help to save time, resource and enable faster decision making. The technology

adds speed and intelligence in the business process improving quality of service to the

customer.

The business process of serving the customer to offer goods, products or services is made up of

the following components

a) Enquiry processing

b) Order preparation

c) Order placement

d) Order confirmation

e) Order planning

f) Order scheduling

g) Order manufacturing

h) Order status monitoring

i) Order dispatching

j) Order billing

k) Order receivable accounting

l) Order payment processing

The entire process in parts or full can be handled through these technologies and software

solutions. It provides important strategic, competitive advantage. Further, the technology is

flexible and capable of handling any business models such as:

a) Retailing, Trading, Auctioning

b) Manufacturing, Distribution & Selling

c) Outsourcing, Subcontracting Servicing, Training, Learning, Consulting

The resultant effect is the reduction in cost of business operations, improved customer loyalty

and retention and better quality offer to the customer. Four major applications mentioned earlier

make this achievement possible. We go into details of each one of them.

Transformation stage manual systems to automated systems

The manual system which was prevalent in the organizations before industrial revolution was

slowly transformed into digital form by means of computer and related electronic instruments. A

transformation had to necessarily go through the following stages

a) Appraisal of the procedures

b) Types of documentsc) Storage systems

d) Formulations and coding

e) Verification and validation

f) Review

g) Documentation


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Q2. Explain the various behavioral factors of management organization? As per Porter, howcan performance of individual corporations be determined?

Ans 2.

Management organizations:

An organization is a structure that uses the resources from the environment likemanpower, raw

materials, capital and returns the output like products and services to the environment. It

constitutes the rules, policies, responsibilities and procedures that are adopted by the

organization.

Behavioral factors

The implementation of computer based information systems in general and MSS in particular is

affected by the way people perceive these systems and by how they behavein accepting them.

User resistance is a major behavioral factor associated with theadoption of new systems. The

following are compiled by Jiang et al. (2000) Reasons that employees resist new systems

a) Change in job content

b) Loss of status

c) Change in interpersonal relationships

d) Loss of power

e) Change in decision making approach

f) Uncertainty or unfamiliarity or misinformation

g) Job security

The major behavioral factors are

a) Decision styles symbolic processing of AI is heuristic DSS and ANN are analytic.

b) Need for explanation ES provides explanation, ANN does not, DSS may provide partial

explanation. Explanation can reduce resistance to change

c) Organizational climate some organizations lead and support innovations and new

technologies whereas other wait and lag behind in making changes


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d) Organizational expectations over expectation can result in disappointments

andtermination of innovation. Over expectation was observed in most early intelligent

systems.

e) Resistance to change can be strong in MSS because the impacts may be significant.

Performance of individual corporations:

Out of many possible interpretations of a strategy an organization adopts in business, it is foundthat a majority is concerned with competition between corporations. Competition means

cultivating unique strengths and capabilities, and defending them against imitation by other

firms. Another alternative sees competition as a process linked to innovation in product, market,

or technology. Strategic information systems theory is concerned with the use of information

technology to support or sharpen an enterprise's competitivestrategy. Competitive strategy is an

enterprise's plan for achieving sustainablecompetitive advantage over, or reducing the edge of,

its adversaries.

The performance of individual corporations is determined by the extent to which they manage

the following(as given by Porter)

a) The bargaining power of suppliersb) The bargaining power of buyer

c) The threat of new entrants

d) The threat of substitute products And

e) Rivalry among existing firms.

There are two basic factors which may be considered to be adopted by organization in their

strategies

a) low cost

b) Product differentiation

Enterprise can succeed relative to their competitors if they possess sustainablecompetitive adva

ntage in either of these two. Another important consideration in positioning is 'competitivescope', or the breadth of the enterprise's target markets

withinits industry, i.e. the range of product varieties it offers, the distribution channels itemploys,

the types of buyers it serves, the geographic areas in which it sells, and the array of related

industries in which it competes. Under Porter's framework, enterprises have four generic

strategies available to them whereby they can attain above average performance. They are

a) Cost leadership

b) Differentiation

c) Cost focus

d) Focused differentiation

According to Porter, competitive advantage grows out of the way an enterprise organizes and

performs discrete activities. The operations of any enterprise can be divided into a series of

activities such as salespeople making sales calls, service technicians performing repairs,

scientists in the laboratory designing products or processes, and treasurers raising capital. By

performing these activities, enterprises create value for their customers.

The ultimate value an enterprise creates is measured by the amount customers are willing to

pay for its product or services. A firm is profitable if this value exceeds the collective cost of

performing all of the required activities. To gain competitive advantage over its rivals, a firm

must either provide comparable value to the customer, but performactivities more efficiently than

its competitors (lower cost), or perform activities in a unique way that creates greater buyer


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value and commands a premium price(differentiation). As per Borden 1964, quoted in Wiseman

1988many differentiation bases can be classified as 4 Ps as given below

1. Product (quality, features, options, style, brand name, packaging, sizes, services,

warranties, returns)

2. Price (list, discounts, allowances, payment period, credit terms)

3. Place (channels, coverage, locations, inventory, transport)

4. Promotion (advertising, personal selling, sales promotion, publicity).

The various attributes listed above can be sharpened the firms product by the support of a

suitable information technology

Q3. Compare various types of development aspect of Information System? Explain the variousstages of SDLC?

Ans 3.

Development of Information Systems

a) Development and Implementation of the MIS

Once the plan of MIS is made, the development of the MIS calls for determining the

strategy of development. As discussed earlier, the plan consists of various systems and

subsystems. The development strategy determines where to begin and in what

sequence the development can take place with the sole objective of assuring the

information support. The choice of the system or the subsystem depends on its position

in the total MIS plan, the size of the system, the user's understanding of the systems

and the complexity and its interface with other systems. The designer first develops

systems independently and starts integrating them with other systems, enlarging the

system scope and meeting the varying information needs. Determining the position of

the system in the MIS is easy. The real problem is the degree of structure, and

formalization in the system and procedures which determine the timing and duration of

development of the system. Higher the degree of structuredness and formalization,

greater is the stabilization of the rules, the procedures, decision making and the

understanding of the overall business activity. Here, it is observed that the user's and

the designer's interaction is smooth, and their needs are clearly understood and

respected mutually. The development becomes a method of approach with certainty in

input process and outputs.

b) Prototype Approach

When the system is complex, the development strategy is Prototyping of the System.

Prototyping is a process of progressively ascertaining the information needs, developing

methodology, trying it out on a smaller scale with respect to the data and the complexity,ensuring that it satisfies the needs of the users, and assess the problems of


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development and implementation. This process, therefore, identifies the problem areas,

inadequacies in the prototype visa vis Fulfillment of the information needs. The designer

then takes steps to remove the inadequacies. This may call upon changing the prototype

of the system, questioning the information needs, streamlining the operational systems

and procedures and move user interaction. In the prototyping approach, the designer's

task becomes difficult, when there are multiple users of the same system and the inputs

they use are used by some other users as well. For example, a lot of input data comes

from the purchase department, which is used in accounts and inventory management.

The attitudes of various users and their role as the originators of the data need to be

developed with a high degree of positivism. It requires, of all personnel, to appreciate

that the information is a corporate resource, and all have to contribute as per the

designated role by the designer to fulfill the corporate information needs. When it comes

to information the functional, the departmental, the personal boundaries do not exist.

This calls upon each individual to comply with the design needs and provide without fail

the necessary data inputs whenever required as per the specification discussed and

finalized by the designer. Bringing the multiple users on the same platform and changing

their attitudes toward- information, as a corporate resource, is the managerial task of the

system designer. The qualification, experience, knowledge, of the state of art, and an

understanding of the corporate business, helps considerably, in overcoming the

problem of changing the attitudes of the multiple users and the originators of the data.

c) Life Cycle Approach

There are many systems or subsystems in the MIS which have a life cycle, that is, they

have birth and death. Their emergence may be sudden or may be a part of the business

need, and they are very much structured and rule based. They have 100% clarity of

inputs and their sources, a definite set of outputs in terms of the contents and formats.

These details more or less remain static from the day the system emerges and remains

in that static mode for a long time. Minor modifications or changes do occur but they are

not significant in terms of handling either by the designer or the user of the system. Such

systems, therefore, have a life and they can be developed in a systematic manner, and

can be reviewed after a year or two, for significant modification, if any.

d) Implementation of the Management Information System

The implementation of the system is a management process. It brings aboutorganization

al change it affects people and changes their work style. The process evokes a behavior

response which could be either favorable or unfavorable depending upon the strategy of

system implementation. In the process of implementation, the system designer acts as a

change agent or a catalyst.

For a successful implementation he has to handle the human factors carefully. The user

of the system has a certain fear complex when a certain cultural work change is

occurring. The first and the foremost fear is about the security to the person if the

changeover from the old to new is not a smooth one. Care has to be taken to assure the

user that such fears are baseless and the responsibility, therefore, rests with the

designer. The second fear is about the role played by the person in the organization and

how the change affects him. On many occasions, the new role may reduce his

importance in the organization, the work design may make the new job impersonal, and

a fear complex may get reinforced that the career prospects may be affected. There are


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certain guidelines for the systems designer for successful implementation of the system.

The system designer should not question beyond a limit the information need of the user.

1. Not to forget that his role is to offer a service and not to demand terms.

2. Remember that the system design is for the use of the user and it is not the

designer's prerogative to dictate the design features. In short, the designer should

respect the demands of the user.

3. Not to mix up technical needs with the information needs. He should try to develops

suitable design with appropriate technology to meet the information needs. The

designer should not recommend modification of the needs, unless technically

infeasible.

4. Impress upon the user the global nature of the system design which is required to

meet the current and prospective information need.

5. Not to challenge the application of the information in decision making. It is the sole

right of the user to use the information the way he thinks proper.

6. Impress upon the user that the quality of information depends on the quality of input.

7. Impress upon the user that you are one of the users in the organization and that the

information is a corporate resource and he is expected to contribute to the

development of the MIS.

8. Ensure that the user makes commitment to all the requirements of the system design

specifications. Ensure that he appreciates that his commitments contribute largely to

the quality of the information and successful implementation of the system.

9. Ensure that the overall system effort has the management's acceptance.

10. Enlist the user's participation from time to time, so that he is emotionally involved in

the process of development.

11. Realize that through serving the user, he is his best guide on the complex path

of development.

12. Not to expect perfect understanding and knowledge from the user as he may be the

user of a Non computerized system. Hence, the designer should be prepared to

change the system specifications or even the design during the course of

development.

13. Impress upon the user that the change, which is easily possible in manual system, is

not as easy in the computer system as it calls for changes in the programs at cost.

14. Impress upon the user that perfect information is nonexistent His role therefore still

has an importance in the organization.

15. Ensure that the other organization problems are resolved first before the MIS is taken

for development. 16. Conduct periodical user meetings on systems where you get

the opportunity to know the ongoing difficulties of the users.

16. Train the user in computer appreciation and systems analysis as his perception of

the computerized information system will fall short of the designer's expectation.

Implementation of the MIS in an organization is a process where organizational

transformation takes place. This change can occur in a number of ways.

The Lewin's model suggests three steps in this process. The first step is unfreezing the

organization to make the people more receptive and interested in the change. The second step

is choosing a Course of action where the process begins and reaches the desired level of

stability, and the third step is Refreezing, where the change is consolidated andequilibrium is

reinforced. Many a times.

This process is implemented through an external change agent, such as a consultant playing

the role of a catalyst. The significant problem in this task is the resistance to change. The


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resistance can occur due to three reasons, viz., the factors internal to the users of information,

the factors inherent in the design of the system and the factors arising out of the interaction

between the system and its users. The problem of resistance can be handled through education,

persuasion, and participation. This itself can be achieved by improving the human factors, and

providing incentives to the users, and eliminating the organizational problems before

implementing the system.

SDLC

System development cycle stages are sometimes known as system study. Systemconcepts whi

ch are important in developing business information systems expedite problem solving and

improve the quality of decision making.

The system analyst has to do a lot in this connection. They are confronted with the challenging

task of creating new systems and planning major changes in the organization. The system

analyst gives a system development project, meaning and direction. The typical breakdown of

an information systems life cycle includes a feasibility study, requirements, collection and

analysis, design, prototyping, implementation, validation, testing and operation.

Stages of SDLC

a) Feasibility study

It is concerned with determining the cost effectiveness of various alternatives

in the designs of the information system and the priorities among the various system

components.

b) Requirements collection and analysis

It is concerned with understanding the mission of the information systems, that is, theapplication areas of the system within the enterprise and the problems that the system

should solve.

c) Design

It is concerned with the specification of the information systems structure. There are two

types of design: database design and application design. The database design is the

design of the database design and the application design is the design of the application

programs.

d) PrototypingA prototype is a simplified implementation that is produced in order to verify in practice

that the previous phases of the design were well conducted.

e) Implementation

It is concerned with the programming of the final operational version of the information

system. Implementation alternatives are carefully verifies and compared.

f) Validation and testing

It is the process of assuring that each phase of the development process is of acceptable

quality and is an accurate transformation from the previous phase.


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Q4. Compare & Contrast E-enterprise business model with traditional business organizationmodel? Explain how in E-enterprise manager role & responsibilities are changed? Explain howmanager is a knowledge worker in E-enterprise?

Ans 4.

Managing the E enterprise

Due to Internet capabilities and web technology, traditional business organizationdefinition hasundergone a change where scope of the enterprise now includes other company locations,

business partners, customers and vendors. It has no geographic boundaries as it can extend its

operations where Internet works. All this is possible due to Internet and web moving traditional

paper driven organization to information driven Internet enabled E business enterprise.

E business enterprise is open twenty four hours, and being independent, managers, vendors

Customers transact business anytime from anywhere. Internet capabilities have given E

business enterprise a cutting edge capability advantage to increase the business value. It has

opened new channels of business as buying and selling can be done on Internet. It enables to

reach new markets across the world anywhere due to communication capabilities. It has

empowered customers and vendors / suppliers through secured access to information to act,wherever necessary. The cost of business operations has come down significantly due to the

elimination of paper driven processes, faster communication and effective collaborative working.

The effect of these radical changes is the reduction in administrative and management

overheads, reduction in inventory, faster delivery of goods and services to the customers.

In E business enterprise traditional people organization based on 'Command Control' principle is

absent. It is replaced by people organization that is empowered byinformation and knowledge to

perform their role. They are supported by information systems, application packages, and

decision support systems. It is no longer functional, product, and project or matrix organization

of people but E organization where people work in network environment as a team or workgroup in virtual mode. E business enterprise is more process driven Technology enabled and


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uses its own information and knowledge to perform. It is lean in number, flat in structure, broad

in scope and a learning organization.

In E business enterprise, most of the things are electronic, use digital technologies and work on

databases, knowledge bases, directories and document repositories. The business processes

are conducted through enterprise software like ERP, SCM, and CRM supported by data

warehouse, decision support, and knowledge management systems. Today most of the

business organizations are using Internet technology, network, and wireless technology for

improving the business performance measured in terms of cost, efficiency, competitiveness and

profitability. They are using E business.

Ecommerce

Solutions to reach faraway locations to deliver product and services. The enterprisesolutions like

ERP, SCM, and CRM run on Internet (Internet / Extranet) & Wide Area Network (WAN). The

business processes across the organization and outside run on E technology platform using

digital technology. Hence today's business firm is also called E enterprise or Digital firm. The

paradigm shift to E enterprise Has brought four transformations, namely:a) Domestic business to global business.

b) Industrial manufacturing economy to knowledge based service economy

c) Enterprise Resource Management to Enterprise Network Management

d) Manual document driven business process to paperless ,automated, electronically

transacted business process.

These transformations have made conventional organization design obsolete. The basis of

conventional organization design is command & control which is now collaborates & control.

This Change has affected the organization structure, scope of operations reporting mechanisms

work practices, workflows, and business processes at large.

Comparison between Conventional Design and E Organization

In E enterprise, business is conducted electronically. Buyers and sellers through Internet drive

the market and Internet based web systems. Buying and selling is possible on Internet. Books,

CDs, computer, white goods and many such goods are bought and sold on Internet. The new

channel of business is well known as Ecommerce. On the same lines, banking, insurance,

healthcare are being managed through Internet E banking, E billing, E audit, & use of Credit

cards, Smart card, ATM, E money are the examples of the Ecommerce application. The digital

firm, which uses Internet and web technology and uses E business And Ecommerce solutions,

is a realityand is going to increase in number. MIS for E business is different compared to

conventional MIS design of an organization. The role of MIS in E business organization is todeal with changes in global market and enterprises. MIS produces more knowledge based

products.

Knowledge management system is formally recognized as a part of MIS. It is effectively used for

strategic planning for survival and growth, increase in profit and productivity and so on. To

achieve the said benefits of E business organization, it is necessary to redesign the organization

to realize the benefits of digital firm. The organization structure should be lean and flat. Get rid of

rigid established infrastructure such as branch office or zonal office. Allow people to work from

anywhere. Automate processes after reengineering the process to cut down process cycle

time. Make use of groupware technology on Internet platform for faster response processing.Another challenge is to convert domestic process design to work for international process,


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where integration of multinational information systems using different communication

standards, country specific accounting practices, and laws of security are to be adhered strictly.

Internet andnetworking technology has thrown another challenge to enlarge the scope of

Organization where customers and vendors become part of the organization. This technology

offers a solution to communicate, coordinate, and collaborate with customers, vendors and

business partners. This is just not a technical change in business operations but a cultural

change in the mindset of managers and workers to look beyond the conventional organization.

It means changing the organization behavior to take competitive advantage of the E business

technology.

The last but not the least important is the challenge to organize and implementinformation archit

ecture and information technology platforms, considering multiplelocations and multiple

information needs arising due to global operations of the business into a comprehensive MIS

Q5. What do you understand by service level Agreements (SLAs)? Why are they needed?What is the role of CIO in drafting these? Explain the various security hazards faced by an IS?

Ans 5.

A service level agreement(frequently abbreviated as SLA) is a part of a service contract where

the level of service is formally defined. In practice, the term SLA is sometimes used to refer to

the contracted delivery time (of the service) or performance. As an example, internet

service providers will commonly include service level agreements within the terms of their

contracts with customers to define the level(s) of service beings old in plain language terms

(typically the (SLA) will in this case have a technical definition in terms of MTTF, MTTR, various

data rates, etc.

A service level agreement (SLA) is a negotiated agreement between two parties where one is

the customer and the other is the service provider. This can be a legally binding formal or

informal "contract" (see internal department relationships). Contracts between the service

provider and other third parties are often (incorrectly) called SLAs as the level of service has

been set by the (principal) customer, there can be no "agreement" between third parties

(these agreements are simply a "contract"). Operating LevelAgreements or OLA(s), however,

may be used by internal groups to support SLA(s).

The SLA records a common understanding about services, priorities, responsibilities,

guarantees, and warranties. Each area of service scope should have the "level of service

"defined. The SLA may specify the levels of availability, serviceability, performance, operation,

or other attributes of the service, such as billing. The "level of service" can also be specified as

"target" and "minimum," which allows customers to be informed what to expect (the minimum),

whilst providing a measurable (average) target value that shows the level of organization

performance. In some contracts, penalties may be agreed upon in the case of non-compliance

of the SLA (but see "internal" customers below). It is important to note that the "agreement"


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relates to the services the customer receives, and not how the service provider delivers that

service.

SLAs have been used since late 1980s by fixed line telecom operators as part of their contracts

with their corporate customers. This practice has spread such that now it is common for a

customer to engage a service provider by including a service-level agreement in a wide range

of service contracts in practically all industries and markets. Internal departments (such as IT,

HR, and Real Estate) in larger organization have adopted the idea of using service-level

agreements with their "internal" customers users in other departments within the same

organization. One benefit of this can be to enable the quality of service to be benchmarked with

that agreed to across multiple locations or between different business units. This internal

benchmarking can also be used to market test and provide a value comparison between an in-

house department and an external service provider

Service-level agreements are, by their nature, "output" based the result of the service as

received by the customer is the subject of the "agreement." The (expert) service provider can

demonstrate their value by organizing themselves with ingenuity, capability ,and knowledge

to deliver the service required, perhaps in an innovative way.Organizations can also specify the

way the service is to be delivered, through aspecification (a service-level specification) and

using subordinate "objectives" other than those related to the level of service. This type of

agreement is known as an "input" SLA.This latter type of requirement is becoming obsolete

as organizations become more demanding and shift the delivery methodology risk on to the

service provider.

Role of CIO in drafting SLAS

One of the major responsibilities of the CIO is to establish the credibility of the systems

organization. The systems department should not only focus on providing better service to the

various lines of business but also help businesses operate better. If the CIO wants to be taken

serious sly, he needs to do what other executives do and have his own business metrics and

performance measurements, so that he can effectively measure his internal business

performance. Other business departments have them, but CIOs generally do not because IT

has always been viewed as a cost center. Measurements in IT tend to be vague and lacking in

context. For example, 'I had 14 projects last year, and I did them well.' But there is no real

business measurement there. How many projects should the manager have had? Did he really

have the capacity to handle 14 projects? A CIO should explore running their area more like a

service operation rather than a cost center, and develop metrics that track the performance

of the information systems staff, as well as the equipment comprising the applications,

infrastructure, and networks under the CIO's control. The first step, they say, is to implement

service level agreements (SLAs) with business units. It sets the expectation on the technical

areas of the CIO's operations. At a minimum, they should set up what is expected and what

levels of service the equipment will provide.

The underlying SLAs should be some sort of a chargeback system with business units,

particularly when it comes to apportioning staff time. If information systems are now providing a

service, the staff needs to understand where the service is being used to be properly

remunerated or to demonstrate where the value is. The second part of the IT operations

equation is computer equipment, and CIOs must have a firm handle on how that equipment is

being used. There are softwares to help with the people picture, and there are other products

that can monitor hardware performance, such as network and server uptime. One of the major


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roles of the CIO is to make the organization information systems savvy and increase the

technological maturity of the information systems organization. A major part of the CIO's job is to

make the users aware of the opportunities arising as a result of technical innovations, how this

canhelp them perform better, and familiarizing them with computers and information systems

applications. The information systems management also has the job of helping the end users

adapt to the changes caused by information systems, and to encourage their use. Finally, CIOs

need to institute life cycle management with their applications and computer equipment. Most IT

organizations do not have any idea of the life cycle of an application how long they want it to

last, and when it needs to be refurbished, replaced or disposed of. Lacking this knowledge, it is

easy for applications to linger long after they should be gone, and for companies to spend far

too much money on maintaining ailing applications.

Security Hazards faced by an Information system:

Security of the information system can be broken because of the following reasons:

i) Malfunctions:

In this type of security hazard, all the components of a system areinvolved. People, software

and hardware errors course the biggest problem. More dangerous are the problems which are

created by human beings due to the omission, neglect and incompetence.

ii) Fraud and unauthorized access:

This hazard is due to dishonesty, cheating or deceit. This can be done through

a) Infiltration and industrial espionage

b) Tapping data from communication lines

c) Unauthorized browsing through lines by online terminals, etc.

iii) Power and communication failure:

In some locations they are the most frequent hazards than any other else because availability

of both of them depends upon the location. Sometimes communication channel are busy or

noisy. There are power cuts and sometimes high voltage serge destroys a sensitive component

of the computer.

iv) Fire hazard:

it can happen because of electrical short circuits, flammable liquids etc.

v) Sabotage and riots:

Sometimes the employees destroy the computer centre in case of strike, lockout or there may

be chances of riots in the area. Like happen in maruti manesar plant

vi) Natural Disasters

Natural disasters are not controllable. They are not frequent hazards but if they happen they

destroy the things or ruin them. Examples are earthquake, floods, tornadoes and lightening.

vii) General hazards:

This category covers many more hazards which are not covered anywhere and difficult to define

and come spontaneously.


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Q 6. Case Study: Information system in a restaurant.

Ans 6

Case Summary:

A waiter takes an order at a table, and then enters it online via one of the six terminals located in

the restaurant dining room. The order is routed to a printer in the appropriate preparation area:

the cold item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it

is a drink. A customers meal check-listing (bill) the items ordered and the respective prices are

automatically generated. This ordering system eliminates the old three-carbon-copy guest check

system as well as any problems caused by a waiters handwriting. When the kitchen runs out of

a food item, the cooks send out an out of stock message, which will be displayed on the dining

room terminals when waiters try to order that item. This gives the waiters faster feedback,

enabling them to give better service to the customers. Other system features aid management

in the planning and control of their restaurant business. The system provides up-to-the-minute

information on the food items ordered and breaks out percentages showing sales of each item

versus total sales. This helps management plan menus according to customers tastes. The

system also compares the weekly sales totals versus food costs, allowing planning for tighter

cost controls. In addition, whenever an order is voided, the reasons for the void are keyed in.

This may help later in management decisions, especially if the voids consistently related to food

or service. Acceptance of the system by the users is exceptionally high since the waiters and

waitresses were involved in the selection and design process. All potential users were asked

to give their impressions and ideas about the various systems available before one was chosen.

Questions to be analyzed:

1. In the light of the system, describe the decisions to be made in the area of strategic

planning, managerial control and operational control? What information would you

require to make such decisions?


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2. What would make the system a more complete MIS rather than just doing transaction

processing?

3. Explain the probable effects that making the system more formal would have on the

customers and the management.

Solution:

A management information system (MIS) is an organized combination of people, hardware,communication networks and data sources that collects, transforms anddistributes information

in an organization. An MIS helps decision making by providing timely, relevant and accurate

information to managers. The physical components of an MIS include hardware, software,

database, personnel and procedures.

Management information is an important input for efficient performance of various managerial

functions at different organization levels. The information system facilitates decision

making. Management functions include planning, controlling and decision making. Decision

making is the core of management and aims at selecting the best alternative to achieve an

objective. The decisions may be strategic, tactical or technical. Strategic decisions are

characterized by uncertainty. They are future oriented and relate directly to planning activity.Tactical decisions cover both planning and controlling. Technical decisions pertain to

implementation of specific tasks through appropriate technology. Sales region analysis, cost

analysis, annual budgeting, and relocation analysis are examples of decision-support systems

and management information systems.

There are 3 areas in the organization. They are strategic, managerial and operational control.

Strategic decisions are characterized by uncertainty. The decisions to be made in the area of

strategic planning are future oriented and relate directly to planning activity. Here basically

planning for future that is budgets, target markets, policies, objectives etc. is done. This isbasically a top level where up-to-the minute information on the food items ordered and breaks

out percentages showing sales of each item versus total sales is provided. The top level where

strategic planning is done compares the weekly sales totals versus food costs, allowing planning

for tighter cost controls. Executive support systems function at the strategic level, support

unstructured decision making, and use advanced graphics and communications. Examples of

executive support systems include sales trend forecasting, budget forecasting, operating plan

development, budget forecasting, profit planning, and manpower planning.

The decisions to be made in the area of managerial control are largely dependent upon the

information available to the decision makers. It is basically a middle level where planningof menus is done and whenever an order is voided, the reasons for the void are keyed in which

later helps in management decisions, especially if the voids are related to food or service. The

managerial control that is middle level also gets customer feedback and is responsible for

customer satisfaction.

The decisions to be made in the area of operational control pertain to implementation of specific

tasks through appropriate technology. This is basically a lower level where the waiter takes the

order and enters it online via one of the six terminals located in the restaurant dining room and

the order is routed to a printer in the appropriate preparation area. The items ordered list and

the respective prices are automatically generated. The cooks send out of stock message whenthe kitchen runs out of a food item, which is basically displayed on the dining room terminals


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when waiter tries to order that item. This basically gives the waiters faster feedback, enabling

them to give better service to the customers. Transaction processing systems function at the

operational level of the organization. Examples of transaction processing systems include order

tracking, order processing, machine control, plant scheduling, compensation, and securities

trading.

The information required to make such decision must be such that it highlights the trouble spots

and shows the interconnections with the other functions. It must summarize all information

relating to the span of control of the manager. The information required to make these decisions

can be strategic, tactical or operational information.

Advantages of an online computer system:

1. Eliminates carbon copies

2. Waiters handwriting issues

3. Out-of-stock message

4. Faster feedback helps waiters to service thecustomers

Advantages to management:

1. Sales figures and percentages item-wise

2. Helps in planning the menu.

3. Cost accounting details

If the management provides sufficient incentive for efficiency and results to their customers, it

would make the system a more complete MIS and so the MIS should support this culture by

providing such information which will aid the promotion of efficiency in the management services

and operational system. It is also necessary study the keys to successful Executive Information

System (EIS) development and operation. Decision support systems would also make the

system a complete MIS as it constitutes a class of computer-based information systems

including knowledge-based systems that support decision-making activities. DSSs serve the

management level of the organization and help to take decisions, which may be rapidly

changing and not easily specified in advance.

Improving personal efficiency, expediting problem solving (speed up the progress of problems

solving in an organization),facilitating interpersonal communication, promoting learning and

training, increasing organizational control, generating newevidence in support of a decision,

creating a competitive advantage over competition, encouraging exploration and discovery on

the part of the decision maker, revealing new approaches to thinking about the problem space

and helping automate the managerial processes would make the system a complete MIS rather

than just doing transaction processing.

The management system should be an open system and MIS should be so designed that it

highlights the critical business, operational, technological and environmentalchanges to the

concerned level in the management, so that the action can be taken to correct the situation.

To make the system a success, knowledge will have to beformalized so that machines

worldwide have a shared and common understanding of the information provided. The systems

developed will have to be able to handle enormous amounts of information very fast. An

organization operates in an ever-increasing competitive, global environment.Operating in a

global environment requires an organization to focus on the efficient execution of its processes,

customer service, and speed to market. To accomplish these goals, the organization must

exchange valuable information across different functions , levels, and business units. By making


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the system more formal, the organization can more efficiently exchange information among its

functional areas, business units, suppliers, and customers. As the transactions are taking place

every day, the system stores all the data which can be used later on when the hotel is in need of

some financial help from financial institutes or banks. As the inventory is always entered into the

system, any frauds can be easily taken care of and if anythinggoes missing then it can be

detectedthrough the system.

Documents

MB0047 Management Information Systems Set 2