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MODULE 1 OF MIS FOR VTU MBA FIRST SEMESTER
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04/08/23 1
MODULE – 1
ORGANISATION & INFORMATION SYSTEM
Presented by-NAVAZ THOKURLECTURERMBA DEPTP.A.CE- MANGALORE
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SYSTEM:A system is a collection of elements/components that interact with
each other to accomplish the defined goalEg: University system Banking system
University system: The components are: admission, teaching, examination, evaluation
Each of these components interacts to train and graduate the student
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Information System (IS):An information system is a set of interrelated elements that collect (input) data, manipulate (process) data and disseminate (output) information and provide a reaction (feedback) to meet the objective
If an information system is automated using computer as machine, then it is referred as Computer Based Information System (CBIS) and is the blend of Information System and Computer System (Hardware & Software)
Information Technology:
Refers to the technology of storing processing communicating sharing protecting/securing
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Data/information across geographical locations
Makes use of Computer (hardware/software) technology Storage technology Communication technology
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In general, a system has 3 basic elements;
Input Processing Output
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Input
ProcessingClassifyArrange Calculate
Output
Suppliers
ENVIRONMENT
ORGANISATION
Customers
Regulatory Agencies Stockholders Competitors
Feedback
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Changing Environment and its impact on business:
Any change in the environment will introduce some sort of pressure/stress on system to undergo change in the system
If changes are not accommodated in the system, the system starts decaying and terminates finally
The changes are accommodated by:
- changing the goal set of the system (new goals)
- changing the levels in achieving the goals
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Types of changes in environment:
- Economical (Capital, Labor, Price change, Fiscal policy, customers)
- Technological
- Social
- Political
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Business strategic ObjectivesBusiness Processes Software
Hardware
Data Managem
ent
Telecommunicatio
n
Business Firm Information System
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Operational Excellence
New Products, Services & Business Models
Customer & Supply Intimacy
Improved Decision making
Competitive advantage
Survival
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Operational EfficiencyE.g. Wal-Mart, the largest retailer on Earth, exemplifies the power of information system coupled with brilliant practices & supportive mgt to achieve world class operational efficiencyIn 2005, Wal-Mart attained more than $285 billion in sales- nearly one-tenth of the retail sales in the US- because of its Retail Link System, which digitally links its suppliers to Wal-Mart’s 5,289 stores worldwide.
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New Products, Services & Business ModelsA business model describes how a company produces, delivers & sells a product or services to create wealthE.g. Apple transformed an old business model of music distribution in to online, legal distribution model on its own iPod technology platform.
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Customer & Supplier Intimacy E.g. Mandarin hotel in Manhattan & other high end hotels exemplify the us of information systems && technologies to achieve customer intimacy. These hotels use computers to keep track of guest’s preferences such as their preferred room temperature, check-in time, television programs & stores all that data. Individual rooms in the hotel are networked to a central network server computer so that they can be remotely monitored or controlled. When the customer enters at the hotels, the system automatically changes the room conditions based on customer’s profile.
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Improved Decision makingE.g. Verizon Corpn, one of the largest regional Operating companies in the US, uses a web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance for each locality served, & line outages etc. Using these information managers immediately allocate resources to affected areas & restores service .
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Competitive AdvantageDoing things better than your competitors, charging less for superior products & responding to the customers & suppliers in real time will add up to higher sales & higher profitsE.g. Dell Computer- Dell Computer has shown consistent profitability during its life span of 25 years. A large part of Dell’s operational efficiency results from “mass customization” staying close to the customers by using Web-based order entry model that can build & ship a customizes PC to any of its millions of consumers only in few days.
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Survival Introduction of ATMs
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MIS – Definitions
MIS is defined as a system which provides information support for decision-making in the organisation
MIS is defined as the system of man & machine for providing the information to support the operations, the management & the decision-making functions in the organization
MIS is defines as a system based on database of the organisation evolved for
the purposed of providing information to the people in the organisaton.
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In order to have a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:
Handling of voluminous data & transaction
Confirmation of the validity of data
Complex processing of data
Quick search & retrieval
Mass storage
Communication of he information to the user on time
Fulfilling the changing needs of information
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Senior Management
Middle ManagementScientists & knowledge Workers, Managers
Operational management Production & Service Workers
Levels of Organisation &Activities
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Senior Management- makes long-term strategic decisions about products & services as well as ensures financial performance of the firm.
Middle management- carries out the programs & plans of senior management
Knowledge workers such as engineers, managers, architects, design products /services &create new knowledge for the firm
Operational Management- Data workers such as secretaries/clerks, assist paper work at all level of the firm. Production worker produce the product & deliver the service.
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TechnologyComputer hardware is the physical equipment used for input, processing & output
activities in an information system.
Computer software consists of the detailed , programmed instructions that control & coordinate the computer hardware components in an information system.
Data Management technology consists of the software governing the organisation of data on physical storage media
Networking & Telecommunication technology consisting of both physical devices & software, links the various pieces of hardware & transfers the data from one physical location to another.
The world’s largest used network is the Internet.
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Data:
The term ‘data’ represent Facts or figures about an event/object/entity
Eg:USN, Name, Branch, DOB, Sex... etc,Represents data about the entity/object student
Acc#, prev_bal, amt_credited, new BAL... Etc,Represents data about the event of bank transaction
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Information:Information is the data that has been processed into a form that is
meaningful to the recipient in order to take appropriate actions/decisions
E.g.: Summing all the marks and finding the average of marks scored by students to declare the class obtained. Searching all the customers in the bank who have not remitted the last 3 installments towards loan to send reminderTerms data and information are interchangeably used in many context but in reality the two are different
In a vague way, data is like the raw material for processing and information is like the finished product of processingInformation of one processing may become data for another processing
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Attributes of data:
The quality of data/information depends on the attributes associated with it
- Accuracy- Timeliness- Completeness- Reliability- Relevance- Source
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Levels of People:
3 levels of people are involved in any typical organization
- Operational level Management
- Middle level Management
- Top level Management
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Operational management involved in •planning•scheduling•controlling and•decision making for routine operations
Unit manager, supervisorEg: production of number of items to be manufactured/fabricated per unit to meet the production target
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Middle management involved in•short term planning• setting targets•controlling•business functions
Production manager, purchase managerE.g.: A production mangers sets the target for production of number of items for next quarter based on demand from the marketing division and plan to ship the same across business centers.
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Top management involved in•goal setting•strategic planning•evolving business plans•implementation of plans
Managing Director, CEO, CAO, CE, Chairman
Eg: Planning for production of new product
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Firm Profitability & Strategic Position
Supply Chain Management
Enterprise Management
Customer Management
Knowledge Management
DataCollection & Storage
Transformation in to business system
Dissemination
Planning Coordinating Controlling Modeling & Decision Making
THE BUSINESS INFORMATION VALUE CHAIN
Information Processing activities Management Activities
Business Processes
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Programmed decisions:These decisions are characterized by large volume of data and
predefined•rules•procedures•Algorithms
Decisions can automated easily
Handled by operational management
Decisions are structured and frequency for decision is frequent
The result of the decision guarantees optimal solution
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Non-programmed decisions: These decisions do not have pre-established
•rules•procedures•algorithms•data requirements are not known advance
Cannot be automated easily and completely
Environmental, social, technical information is required which keep changing with respect to time, geographical location
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Unstructured decisions due to change in type of parameters and number of parameters keep changing
The outcome of the decision will not guarantee optimal solution but it may be near to optimal solution
E.g: Decision Support systems – interactive information systems that support/help in taking unstructured/ non-programmed decisions
JIT – Just-In-Time production decisions
TQM – Total Quality Management decisions
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Accounting
Finance
Personnel
Public relations
Sales
Market research
Production
Purchasing
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Accounting-
Profit/loss statement, cash flow, inventory control, payroll, cost control, cost allocation& expense classification.
Users Mgt seeks information relevant to its decision making such as data on
investments in new projects, current financial position of the firm & the control of expenses.
Plant managers seek information relevant t material, labour & Overhead costs.
Sales managers needs the information about contribution margin to different states.
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FinanceFinance dept ins in charge of activities related to borrowing, funding &
ascertaining necessary liquidity.
Data related to capital structure, no. of shareholders, & the maturity date of debit & treasury stocks must be available.
Data related to prime interest rates, capital & market conditions must be maintained
Users
Top Mgt
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Public Relations
Bridges the gap between the outside world & the organisation.
Union contract negotiations, scholarship & educational; contributions & service rendered to the community are the typical information aspects maintained by the dept.
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SalesData in the sales dept are used to produce a flow indicative information
pertaining to regional & total sale forecasts, actual ales, performance reports etc.
Users Sales managers use periodic report with breakdown sales by products in
evaluating the contribution margin of each territory.
The Mgt must be given information on significant deviations from predetermined forecasts.
The Accounts dept receives daily documentary evidences & information related to cash & credit sales.
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Market research
MR dept gathers information pertaining to the firm’s market potential, consumer behaviour & competitive circumstances.
Mgt must be furnished with information pertinent to mkt strategy & trends.
E.g. A manufacturer has designed software for the users of a major hardware manufacturer.
The firm’s ability to achieve its sales forecast was hindered when the MR dept failed to predict & account for a major modification that took place in the hardware feature which made the firm's products quite obsolete.
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Production Data relating to utilization of materials, scheduling priority, equipments &
facilities.
Periodic reports are generated & informed to the plant managers
Control of manufacturing cost is the primary objective
Quality Control dept must be furnished with periodic reports containing the no. of units produced & no. of production batches in order to determine the sample sixe for quality production.
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PurchasingPurchasing dept is responsible for receiving a constant flow of RMs
machinery, equipments & office supplies.
Purchase dept collect the information about various sources of supplies, favourable bids, terms of delivery & quantity discounts.
Users The accounts payable division needs documentary evidence supporting
various supplier claims
Warehouse-keepers must be furnished with copies of purchase acquisition forms relating to inflow of raw materials & supplies.
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Government
Auditor
Shareholders & Prospective Investors
Customer
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Government- It requires various reports in periodic intervals about income, tax matters & other regulations.
AuditorAn external auditor is responsible for determining the validity of the firm’s
financial statements.
He seeks multipurpose information about A/Cs receivable, A/Cs payable, petty cash vouchers, depreciation schedules & inventory evaluation sheets etc with supporting evidence.
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Shareholders & Prospective Investors They are interested in information relating to the interim & annual earnings,
earmarking of retained earnings, & projections of future expansion.
Investors want to be informed about material decisions affecting the firm, asset valuation etc
Customer
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Functional Business Processes
FUNCTIONAL AREA BUSINESS PROCESSES
Manufacturing Assembling the productChecking the qualityProducing bills of materials
Sales & Marketing Identifying customersMaking customers aware of the productSelling the product
Finance & Accounting Paying creditorsCreating financial statementsManaging cash accounts
Human Resources Hiring employeesEvaluating employees' job performanceRemuneration & enrolling employees in benefit plans
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Sales
Accounting
Manufacturing
Generate order
Submit Order
Check credit Approve Credit Generate
invoice
Assemble product
Ship Product
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THE ORDER FULFILLMENT PROCESS
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TYPES OF INFORMATION SYSTEMS
Sales & marketing Systems
Manufacturing & Production Systems
Finance & Accounting Systems
Human Resources System
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Sales & Marketing Systems
Sales & Mktg System helps the senior Mgt to monitor trends affecting new products & sales opportunities, support planning for new products & services, & monitor the performance of competitors.
S&M System aids the middle mgt by supporting mktg research & by analyzing advertising & promotional campaigns, pricing decisions, & sales performances
S&M System assist operational management & employees in locating & contacting prospective customers, tracking sales, processing orders & providing customer service support.
SYSTEM DESCRIPTION GROUPS SERVED
Order processing Enter, Process & track order Operational Mgt & employees
Pricing Analysis Determining prices for products & services
Middle management
Sales Trend forecasting Prepare five-year sales forecasts Senior Management
EXAMPLES OF S&M INFORMATION SYSTEMS
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Manufacturing & Production Systems
It deals with the planning, development, & maintenance of production facilities, the establishment of production goals, procurement, storage, & availability of production materials, & the scheduling of equipments, facilities, materials & labour required to fashion finished product.
EXAMPLES OF M&P INFORMATION SYSTEMS
SYSTEM DESCRIPTION GROUPS SERVED
Machine Control Control the actions of machines & equipments
Operational Mgt
Production Planning Decides when & how many products should be produced
Middle management
Facilities Location Decides when to locate new production facilities
Senior Management
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Finance & Accounting Systems
The Finance dept is responsible for managing the firm’s financial assets such as cash, stocks, bonds, & other investments to maximize the returns on these financial assets.
The finance function is also in charge of managing the capitalization of the firm
To determine whether the firm is getting the best returns on its investments, the finance function must obtain a considerable amount of information form external sources
The Accounting Dept is responsible for maintaining & managing the firm’s financial records- receipts, disbursements, depreciation etc.
SYSTEM DESCRIPTION GROUPS SERVED
Accounts receivables Tracks money owed the firm Operational Mgt
Budgeting Prepare short-term budgets Middle management
Profit Planning Plans long-term profit Senior Management
EXAMPLES OF F&A INFORMATION SYSTEMS
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Human Resources systemThe HR function is responsible for attracting, developing & maintain the firm’s workforce. HRIS supports activities such as identifying potential employees, maintaining complete record of existing employees, & creating programs to develop employee’s talents & skills.
HRIS helps senior mgt to identify the human resource requirements (skills, educational levels, types of positions, etc) for meeting the firm’s long term business plans
Middle mgt uses HRIS to monitor & analyze the recruitment, allocation & compensation of employees. Operational Mgt uses HRIs to track the recruitment & placement of firm’s employees.
SYSTEM DESCRIPTION GROUPS SERVED
Training & development Tracks employee training, skills, & performance appraisals
Operational Mgt
Compensation analysis Monitors the range & distribution f employees wages, salaries &benefits
Middle management
HR Planning Plans the long-term labour force needs of the organisation
Senior Management
EXAMPLES OF HR INFORMATION SYSTEMS
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CONCLUSION
“ SURVIVAL OF THE FITTEST”
Gone are the days of managing the business without implementation of an effective information system in the organisation.
To retain a competitive position in the modern competitive, where things change with blink of an eye, it is very much essential for every organisation to implement an effective information system in the organization
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