Mis 1

Copyright © Amity University1

PAN African eNetwork Project

Master of Finance and Control

Management Information System

Semester - II

Prof.- Nishant K Rai

Copyright © Amity University

Agenda

• General Discussion

• Instructor’s Profile

• Syllabus Review

• Lecture I


Syllabus Review

• Module I• Role of data and information, Organization structures, Business Process, Systems

Approach and introduction to• Information Systems.• Module II• Resources and components of Information System, integration and automation of

business functions and developing business models. Classification of Information System

• Module III• Architecture, development and maintenance of Information Systems, Centralized and

Decentralized Information Systems, Factors of success and failure, value and risk of IS.

• Module IV• Decision Making Process, Decision Support Systems, Models and approaches to

DSS• Module V• Introduction to Total Quality Management and Enterprise Resource Planning. ERP:

role, advantages, reasons of success and failure,• Module VI• Financial Management Information Systems in Developing Countries by International

Monetary Fund


References

• Self Study Material• Text & References: • Text: • MIS: Managing the digital firm, Kenneth C.Landon, Jane P. Landon,

Pearson Education. • References: • Management Information Systems, Effy OZ, Thomson Leaning/ Vikas

Publications • Management Information Systems, James A. O’Brein, Tata McGraw-Hill • Management Information System, W.S Jawadekar, Tata Mc Graw Hill

Publication. • Management Information System, David Kroenke, Tata Mc Graw Hill

Publication. • MIS: Management Perspective, D.P. Goyal, Macmillan Business Books. • MIS and Corporate Communications, Raj K. Wadwha, Jimmy Dawar, P.

Bhaskara Rao, Kanishka


Lecture I

• Module I• Role of data and information, Organization

structures, Business Process, Systems Approach and introduction toInformation Systems.

• Module II• Resources and components of Information

System, integration and automation of business functions and developing business models. Classification of Information System


Module I

• Data

• Information

• Meaning of data, information and knowledge


Information Systems

• Why Do People Need Information?

– Individuals - Entertainment and enlightenment

– Businesses - Decision making, problem solving and control


Data, Information, and Systems

• Data vs. Information

– Data• A “given,” or fact; a number, a statement, or a picture

• Represents something in the real world

• The raw materials in the production of information

– Information• Data that have meaning within a context

• Data in relationships

• Data after manipulation


Data, Information,and Systems

• Data Manipulation

– Example: customer survey• Reading through data collected from a customer

survey with questions in various categories would be time-consuming and not very helpful.

• When manipulated, the surveys may provide useful information.



• Generating Information– Computer-based ISs take data as raw material,

process it, and produce information as output.

Figure 1.1 Input-process-output


Figure 1.2 Characteristics of useful information


• Information in Context



• What Is a System?– System: A set of components that work together to achieve a

common goal

– Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal

– Closed system: Stand-alone system that has no contact with other systems

– Open system: System that interfaces with other systems



Figure 1.3 Several subsystems make up this corporate accounting system.



• Information and Managers

– Systems thinking• Creates a framework for problem solving and

decision making.• Keeps managers focused on overall goals and

operations of business.



Figure 1.5 Qualities of humans and computers that contribute to synergy



• The Benefits of Human-Computer Synergy

– Synergy• When combined resources produce output that exceeds the

sum of the outputs of the same resources employed separately

– Allows human thought to be translated into efficient processing of large amounts of data



Figure 1.6 Components of an information system



• The Four Stages of Data Processing

– Input: Data is collected and entered into computer.

– Data processing: Data is manipulated into information using mathematical, statistical, and other tools.

– Output: Information is displayed or presented.

– Storage: Data and information are maintained for later use.


Why Study IS?

• Information Systems Careers– Systems analyst, specialist in enterprise resource planning

(ERP), database administrator, telecommunications specialist, consulting, etc.

• Knowledge Workers– Managers and non-managers– Employers seek computer-literate professionals who know how

to use information technology.

• Computer Literacy Replacing Traditional Literacy– Key to full participation in western society


Ethical and Societal IssuesThe Not-So-Bright Side

• Consumer Privacy– Organizations collect (and sometimes sell) huge

amounts of data on individuals.

• Employee Privacy– IT supports remote monitoring of employees, violating

privacy and creating stress.


Ethical and Societal IssuesThe Not-So-Bright Side

• Freedom of Speech– IT increases opportunities for pornography, hate speech,

intellectual property crime, an d other intrusions; prevention may abridge free speech.

• IT Professionalism– No mandatory or enforced code of ethics for IT professionals--

unlike other professions.

• Social Inequality– Less than 20% of the world’s population have ever used a PC;

less than 3% have Internet access. -


Contemporary Approaches to Information Systems

• Technical approach • Behavioral approach • Approach of this text: Sociotechnical systems


TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS

DATA WORKERSDATA WORKERS

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS

MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS

OPERATIONAL OPERATIONAL

OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE &

SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING


MAJOR TYPES OF SYSTEMS

• Executive Support Systems (Ess)• Decision Support Systems (Dss)• Management Information Systems (Mis)• Knowledge Work Systems (Kws)• Office Automation Systems (Oas)• Transaction Processing Systems (Tps)


TPS DATA FOR MIS APPLICATIONS

MISMIS

MIS FILESMIS FILES

SALES DATA

UNIT PRODUCT COST

PRODUCT CHANGE DATA

EXPENSE DATA

MISREPORTS

MANAGERSMANAGERS

TPS

Order Processing

System

Materials Resource

Planning System

General Ledger

System

ORDER FILE

PRODUCTION MASTER FILE

ACCOUNTING FILES


DECISION SUPPORT SYSTEMS (DSS)

Management Level

•Inputs: Low Volume Data•Processing: Interactive•Outputs: Decision Analysis•Users: Professionals, Staff

Example: Contract Cost Analysis


DECISION SUPPORT SYSTEMS (DSS)

• Flexible, Adaptable, Quick• User Controls Inputs/Outputs• No Professional Programming• Supports Decision Process• Sophisticated Modeling Tools


EXECUTIVE SUPPORT SYSTEMS (ESS)

Strategic Level• Inputs: Aggregate Data• Processing: Interactive• Outputs: Projections• Users: Senior Managers

Example: 5 Year Operating Plan


INTERRELATIONSHIPS AMONG SYSTEMS

ESS

TPSKWS

OAS

DSSMIS


Organization of the IS Function

• Typical firm has a unit called the IS department who are responsible for IT services

• Members of the IS department– Programmers– System analysts– Project managers– CIO– Database administrators– Network administrators– Chief information officer

• End users (users of IS services outside the IS department)


IS and Business Strategy

• Business strategy determines

– The products and services a firm produces– The industries in which the firm competes– Competitors, suppliers, and customers of the firm– Long-term goals of the firm


General Ways that IS Contributes to Strategic Business Objectives

• IS can contribute to strategic objectives in the following ways– Operational excellence– New products, services, and business models– Customer and supplier intimacy– Improved decision making

• The contributions listed above can lead to – Competitive advantage– Survival


Competitive Forces Model

THE FIRMTRADITIONAL COMPETITION

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES


Four Strategies Used With the Competitive Forces Model

• Product differentiation involves developing new and unique products and services not easily duplicated by competitors

• Becoming the low-cost producer (provide same value but at a lower cost than competitors)

• Focused differentiation involves – Narrowing the market by developing niches for specialized

products or services where a business can compete better than its rivals

– Use of customer data (data mining, credit card transactions, Internet behavior)

• Strengthen customer and supplier intimacy– Use IS to develop strong ties with customers and suppliers

(SCM and CRM are major tools in this area)


Competitive Forces Model and the Internet

• Substitute products/services– Online banking, stock trading, reservations, online music

• Customer’s bargaining power– Availability of pricing information (kbb.com)– Expansion of options (expedia.com, pricegrabber.com)

• Supplier’s bargaining power– Procurement over the Internet raises bargaining power of

customer

– Suppliers benefit from reduced barriers to entry and

elimination of intermediaries (alibaba.com)


Competitive Forces Model and the Internet (continued)

• Threat of new entrants– The Internet has reduced barriers to entry such as the need

for a sales force, access to channels, and physical assets• Rivalries among existing competitors

– Widens the geographic market– Increases number of competitors– Reduces differences among competitors– Pressure to compete on price


Porter’s Value Chain Model

• The value chain model looks at a business in terms of a set of primary and support activities that add value to the firm’s products or services.

• VC model can be used to determine where information systems can have the most impact to effect the competitive position of the firm

• Firm gains a competitive advantage when it provides the product or service with more value or the same value at a lower

price


E-commerce

• E-commerce:– Digitally enabled commercial transactions between

and among organizations and individuals, primarily over Internet

– Began in 1995 with Netscape.com’s acceptance of ads

– Rapid growth led to dot-com bubble (burst in 2001)– Current growth 25% annually– Today e-commerce revenues picture is very positive

• E.g. Number of people who have purchased something online expanded to about 106 million in 2007


The Growth of E-CommerceThe Growth of E-Commerce

Retail e-commerce revenues have grown exponentially since 1995 and have only recently “slowed” to a very rapid 25 percent annual increase, which is projected to remain the same until 2008.

Source: Based on data from eMarketer, 2006; Shop.org and Forrester Research, 2005; and authors.

Electronic Commerce and the Internet



• Seven unique features of e-commerce

1. Ubiquity

• Internet technology available anytime and everywhere: work, home, mobile devices

• Business significance:

• Marketplace is extended beyond traditional boundaries and is removed from temporal and geographic location

• Creates marketspace: Marketplace extended beyond traditional temporal, geographical boundaries

• Shopping can take place anywhere - customer convenience is enhanced, shopping costs are reduced



2. Global reach

• Technology reaches across national boundaries, around Earth


• Commerce enabled across cultural and national boundaries seamlessly, without modification

• Marketspace includes potentially billions of consumers and millions of businesses worldwide



3. Universal standards

• There is one set of Internet technology standards

• Business significance

• Disparate computer systems can easily communicate

• Brings lower market entry costs (costs merchants pay to bring goods to market)

• Lowers search costs for consumers



4. Richness

• Video, audio, text messages are possible

• Business significance: Video, audio, text integrated into single marketing message and experience

5. Interactivity

• Technology works through interaction with user

• Business significance: Consumers engaged in dialog that adjusts to individual; consumer is co-participant in delivering goods to market



6. Information density

• Technology reduces information costs and raises quality


• Information becomes plentiful, cheap, and more accurate

• Increases price transparency and cost transparency

• Enables price discrimination



7. Personalization/customization

• Technology allows personalized messages to be delivered to individuals as well as groups

• Permits customization—changing delivered product or service based on user’s preferences or prior behavior

• Business significance

• Personalization of marketing messages and customization of products and services are based on individual characteristics



• Key concepts in e-commerce: Digital markets and digital goods

• Internet shrinks information asymmetry

• Information asymmetry: when one party has more information important for transaction

• E.g. Information asymmetry between auto dealers and customers

• Digital markets more flexible and efficient

• Reduced search and transaction costs

• Lower menu costs (cost of changing prices)

• Dynamic pricing



• Digital goods

• Goods that can be delivered over network

• E.g. Music tracks, video, e-books, software

• Cost for producing first unit is nearly total cost of product: Cost for producing additional units very low

• Impact of Internet on market for digital goods is revolutionary

• Video rental services

• Hollywood studios

• Record label companies

• Newspapers and magazines



• Digital goods

• Goods that can be delivered over network

• E.g. Music tracks, video, e-books, software

• Cost for producing first unit is nearly total cost of product: Cost for producing additional units very low

• Impact of Internet on market for digital goods is revolutionary

• Video rental services

• Hollywood studios

• Record label companies

• Newspapers and magazines


• Three major e-commerce categories

• Business-to-consumer (B2C)

• E.g. Barnesandnoble.com

• Business-to-business (B2B)

• E.g. ChemConnect.com

• Consumer-to-consumer (C2C)

• E.g. eBay.com

• M-commerce

• Use of handheld wireless devices for purchasing goods and services from any location

Electronic Commerce


• M-Commerce services and applications

• Popular for services that are time-critical, that appeal to people on the move, or that accomplish task more efficiently than other methods

• Especially popular in Europe, Japan, South Korea, and countries where fees for conventional Internet usage are very expensive

• Content and location-based services

• Example: checking train schedules, searching for local businesses

M-Commerce


• Banking and financial services

• Example: Wireless alerts about changes in account information

• Wireless advertising

• Example: Wireless service providers including advertising for local restaurants, movie theaters on cell phones and Wi-Fi devices

• Games and entertainment

• Example: downloading ringtones, movie clips

• Wireless portals

• Feature content optimized for mobile devices to steer users to information most likely to need

M-Commerce


• M-Commerce challenges

• Keyboards and screens tiny and awkward to use

• Data transfer speeds (2G networks) slow compared to Internet connections for PCs

• Time-based connection fees

• Limited memory and power supplies

• M-commerce will benefit from:

• 3G networks and other broadband services

• Standardized mobile payment systems

M-Commerce


• Types of electronic payment systems

• Digital credit card payment systems

• Extend functionality of credit cards for online shopping payments

• Provide mechanisms for authentication and transferring money from bank to seller

• Digital wallets

• Software stores credit card and other information to facilitate form completion and payment for goods on Web.

• Example: Google CheckOut

Electronic Commerce Payment Systems


• Micropayment systems: For purchases of less than $10, such as downloads of individual articles or music clips

• Accumulated balance digital payment systems: Accumulate debit balance that users pay periodically on credit card or telephone bills

• Stored value payment systems: Allow instant online payments based on value stored in digital account (e.g. checking, credit card accounts

• May require use of digital wallet

• Example: Smart cards and devices like EZ Pass



• Digital cash: “Currency” represented in electronic form that moves outside normal network of money. Not regulated and not legal tender

• Client software allows exchange of money with other e-cash user over Internet or with retailer accepting e-cash

• Peer-to-peer payment systems: Serve people who want to send money to vendors or individuals who are not set up to accept credit card payments

• Digital checking payment systems: Electronic check with secure digital signature

• Electronic billing presentment and payment systems: Used for paying routine monthly bills from bank or credit card accounts



• Digital payment systems for m-commerce

• Utilize any form of e-commerce payment systems

• Many payments are small purchases (soft drinks, mobile games, sports scores) requiring micropayment systems

• In Europe/Asia, mobile payments often added and presented on single bill such as mobile phone bill

• Virgin Mobile phone can dial Virgin Cola vending machine in London

• eBay’s PayPal Mobile Text2Buy service allows payments sent to mobile PayPal accounts via texting



Telecommunications and Networking in Today’s Business World

• Networking and communication trends

• Convergence of telephone and computer networks into single digital network using Internet standards

• Telecommunications providers offering multiple services: Data, cable, Internet, voice

• Both voice and data networks have become more powerful, more portable, and less expensive

• Broadband connections of 1Mbps

• Growth of wireless broadband platforms, wireless Internet access



• Most basic computer network: Two or more interconnected computers

• Major hardware, software, transmission components used in simple network:• Client computer• Dedicated server computer• Network interfaces (NICs)• Network operating system (NOS)• Hub or switch

• Routers:

• Device used to communicate with other networks


Components of a Simple Computer NetworkComponents of a Simple Computer Network

Illustrated here is a very simple computer network, consisting of computers, a network operating system residing on a dedicated server computer, cable (wiring) connecting the devices, network interface cards (NIC), switches, and a router.




• Networks in large companies may include

• Hundreds of local area networks (LANs) linked to firmwide corporate networks

• Multiple powerful servers

• Corporate Web site, corporate intranet, extranet

• Back-end systems for sales, financial, purchasing transactions

• Telephone network, videoconferencing

• Mobile WiFi network

• Key issue: Integration of disparate systems

• Alleviated as networks digitize, use Internet standards


Corporate Network InfrastructureCorporate Network Infrastructure

Today’s corporate network infrastructure is a collection of many different networks from the public switched telephone network; to the Internet; to corporate local area networks linking workgroups, departments, or office floors.




• Key digital networking technologies

• Client/server computing

• Clients linked through network controlled by server computer

• Packet switching

• Method of slicing digital messages into packets, sending packets along different communication paths as they become available, and then reassembling packets once they arrive at their destinations

• TCP/IP and connectivity standards

• Protocol: Set of rules and procedures governing transmission of information between two points in network

• TCP/IP: Suite of protocols


Packet-Switched Networks and Packet-Switched Networks and Packet CommunicationsPacket Communications

Data are grouped into small packets, which are transmitted independently over various communications channels and reassembled at their final destination.




• TCP/IP: Suite of protocols developed for U.S. Dept. of Defense

• Transmission Control Protocol (TCP): Handles movement of data between computers

• Internet Protocol (IP): Handles assembly, delivery, disassembly of packets

• TCP/IP allows two computers of different hardware and software platforms to communicate

• Four-layer TCP/IP reference model

1. Application layer

2. Transport layer

3. Internet layer

4. Network interface layer


Communications Networks

• Signals: digital vs. analog

• Analog: Represented by continuous waveform

• Digital: Discrete, binary waveform

• Data as strings of two states: one bit, zero bits / on-off electrical pulses

• Modem needed to translate between analog and digital

• Types of networks (geographic scope)

• Local area network (LAN)

• Campus area network (CAN)

• Metropolitan area network (MAN)

• Wide area network (WAN)


Functions of the ModemFunctions of the Modem

A modem is a device that translates digital signals from a computer into analog form so that they can be transmitted over analog telephone lines. The modem also translates analog signals back into digital form for the receiving computer.




• Ethernet: Dominant LAN standard at physical network level

• Types of networks (network architecture)

• Peer-to-peer or client/server

• Types of networks (topology)

• Star: All network components connect to single hub

• Bus: Signals travel in both directions along single transmission segment

• Most common Ethernet topology

• Ring: Connects network components in closed loop


Network TopologiesNetwork Topologies

The three basic network topologies are the bus, star, and ring.




• Physical transmission media

• Twisted wire

• Pairs of twisted copper wire

• Older type of transmission medium

• Most common LAN cabling: Cat5 cable

• Coaxial cable

• Single, thickly insulated copper wire

• Used for longer runs



• Physical transmission media

• Fiber optics and optical networks

• Strands of clear glass fiber

• Used for Internet backbone

• Optical networks can boost capacity by using multiplexing

(DWDM) - using different wave lengths to carry separate

streams of data over same strand



• Wireless transmission media

• Microwave systems

• High-frequency radio signals that follow straight line and require

transmission stations or satellites to act as relay

• Cellular telephones

• Radio towers placed in adjacent geographic areas (cells)



• Broadband network services and technologies

• Digital subscriber line (DSL) (1 Mbps – 9 Mbps)

• Dedicated telephone network broadband Internet access

• Cable Internet connections (Up to 10 Mbps)

• Dedicated cable network broadband access

• T lines (1.5 Mbps to 45 Mbps)

• Dedicated lines for high-speed data transmission and Internet

connection


The Internet

• What is the Internet?

• World’s most extensive public communication system, rivaling

global telephone system

• World’s largest implementation of:

• Client/server network

• Internetworking

• Internet service provider:

• Commercial organization with permanent connection to Internet

• Sells temporary connections to retail subscribers


The Internet

• Internet addressing

• IP address

• Assigned to each computer on Internet

• 32-bit number: four strings of numbers ranging from 0 to 255

separated by periods

• E.g. 207.46.250.119

• Messages decomposed into packets, each carrying destination IP

address


The Internet

• Domain Name System

• Converts IP addresses to domain names

• DNS servers maintain database of domain names mapped to IP

addresses

• Domains: E.g. sales.google.com

• Root domain (“.”)

• Top-level domain (.gov, .com, .edu, etc.)

• Second-level domain (e.g. “google”)

• Third-level domains/hosts (“computer1.sales.google.com”)


The Internet

The Domain Name SystemThe Domain Name System

The Domain Name System is a hierarchical system with a root domain, top-level domains, second-level domains, and host computers at the third level.


The Internet

• Internet governance

• Internet policies established by several professional organizations and government bodies

• IAB: Defines overall structure of Internet

• ICANN: Assigns IP addresses

• W3C: Sets programming standards, HTML standards for Web

• These organizations influence government agencies, network owners, ISPs, and software developers

• Internet must conform to local national law and technical infrastructure

• Internet paid for by connection services and fees


The Internet

• Internet services

• Client/server technology

• Client:

• Software (e.g. Web browsers) on personal computers or information appliances

• Servers:

• Store data (e-mails, Web pages)

• Transfer data to clients

• Run services, implemented by one or more software programs, that clients can access

• E.g. Telnet, FTP, World Wide Web, newsgroups, chat


The Internet

Client/Server Computing on the InternetClient/Server Computing on the Internet

Client computers running Web browser and other software can access an array of services on servers over the Internet. These services may all run on a single server or on multiple specialized servers.


• World Wide Web: Most popular Internet service

• Web pages: Formatted using Hypertext Markup Language

(HTML) with embedded links that connect documents to one

another and that also link pages to other objects, such as sound,

video, or animation files

• Hypertext Transfer Protocol (HTTP): Communications

standard used to transfer pages on Web

• Uniform resource locator (URL): Full address of web page,

including protocol, domain name, directory path, and file name

• E.g.: http://www.megacorp.com/content/features/082602.html

The Internet


• Web servers: Software for locating and managing stored Web pages, typically run on dedicated computers

• E.g. Apache HTTP Server, Microsoft IIS

• Web site: Collection of Web pages linked to home page

• Webmaster: Person in charge of organization’s Web site

• Search engines: Allow finding information on Web of 50 billion+ pages nearly instantly

• Serve as major portals to Web

• Early search engines: Simple keyword indexes of visited pages

• Yahoo!: Originally organized favorite Web sites into directory lists

The Internet


• Search engines:

• Google: Utilized new page ranking system and indexed combinations of words

• Search engine marketplace very competitive

• Search engines have become major shopping tools

• Search engine marketing:

• Search engine includes paid, sponsored links and advertisements in search results

• Fastest growing form of Internet advertising

• Shopping bots:

• Use intelligent agent software for searching Internet for shopping information

The Internet


• Web 2.0

• Second-generation interactive Internet-based services

• Mashups: Software services that mix and match content or software components to create something entirely new

• Blog: informal chronological Web site where subscribing individuals can publish stories, opinions, and links to other Web sites

• RSS (Rich Site Summary or Really Simple Syndication): Syndicates Web site content so it can be pulled from Web sites and fed automatically to subscribed users

• Wikis: Collaborative Web sites where visitors can add, delete, or modify content on site, including work of previous authors

The Internet


• Intranets: Private networks using Internet standards

• Protected from public visits by firewalls

• Extranets: Limited area of intranet designed for access by authorized vendors and customers

• Technologies and tools for communication and e-business• E-mail• Chat, instant messaging• Electronic discussions• Groupware• Electronic conferencing

The Internet


• Internet telephony:

• Telephone voice transmission over Internet or private networks

• Voice over IP (VoIP): Uses Internet Protocol (IP) to deliver voice

information using packet switching, avoiding tolls charged by local

and long-distance telephone networks

• Fastest-growing form of telephone service in United States

• Can reduce communication and network management costs by 20

to 30 percent

• Flexible technology: Phones can be added or moved to different

offices without rewiring or reconfiguring network

The Internet


• Wireless devices: Have become portable computing platforms

• Cell phones

• Laptops

• Handhelds

• Personal digital assistants (PDAs)

• E-mail handhelds

• Smart phones

• Cellular systems:

• Mobile phones enable millions to communicate and access Internet in countries where conventional phone or Internet service is expensive or unavailable. More mobile phones than PCs (3 billion vs 1 billion)

The Wireless Revolution

Thank You

Copyright@ Amity University

Please forward your query To: Faculty email add.CC: [email protected]

Documents

Mis 1