Management information system

Information Systems and Relationship among them

By

Haqiqat Ali (12) Anurag Pradhan (7)

Under the guidance of

Mr.TVSN Murthy
(DFT)

National Institute Of Fashion Technology Hyderabad

Business Management- Information Systems

Introduction A business process comprises a "series or network of value-added activities, performed by their relevant roles or collaborators, to purposefully achieve the common business goal. These processes are critical to any organization: they may generate revenue and often represent a significant proportion of costs. As a managerial approach, Business process management considers processes to be strategic assets of an organization that must be understood, managed, and improved to deliver value added products and services to clients. This foundation is very similar to other Total Quality Management or Continuous Improvement Process methodologies or approaches. All medium to large organisations depend on Information technology for their continued survival. Consider organisations like British Gas, British Telecom, the Power and Water companies having to manually calculate, millions of customer bills every month or quarter! Clearly the clerical effort involved would make it difficult if not impossible for the organisation to make a profit. Similar arguments apply to many other organisations such as the high street banks, central and local government. A recent article in the Daily Telegraph IT supplement suggested that many large organisations could last no longer than 24 hours without IT support! It is crucial to understand that while Information Technology is a huge discipline with an identity of its own, it essentially is a subset of the discipline Information Systems, although the latter evolved much later. The discipline of Information Systems specifically studies the intersection of Business Processes (which may or may not be technology enabled), People (who will be part of the business processes and will use information technology) and Information Technology.

TYPES OF INFORMATION SYSTEMS There are basically 6 types of information systems. Transaction processing system(TPS) Knowledge work systems(KWS) Decision support system (DIS) Executive support system(ESS) Management information system(MIS) Office automation system(OAS)

1. Transaction processing system Transaction Processing System is a type of information system that collects and stores data, as well as retrieves information that has been lost. The absence of this system leaves a company handicapped and less able to get ahead of hundreds and thousands of other

companies it is in competition with. Whats good about having a computerautomated instrument such as a transaction processing system is that it provides accurate information and does not commit mistakes. It guarantees immediate action to negotiations made by persons and companies involved. It ensures a smooth flow of transaction, isolating particular

transactions that have no credible assurance of the collected datas authenticity. Transactions are usually discussed between the debiting accountant and the crediting accountant. If one of them has not accepted such negotiations, then transactions will be put to pending. ACID (atomicity, consistency, isolation, durability) is a set of properties that guarantee database transactions are processed reliably. In the context of databases, a single logical operation on the data is called a transaction. For example, a transfer of funds from one bank account to another, even though that might involve multiple changes (such as debiting one account and crediting another), is a single transaction. 2. Knowledge Work System There is current interest in the competitive advantage that knowledge may provide for organizations and in the significance of knowledge workers,

organizational competencies and knowledge-intensive firms. Common images of knowledge in the organizational literature as embodied, embedded, brained, uncultured and encoded are identified and, to summarize popular writings on knowledge work, a typology of organizations and knowledge types is constructed. However, traditional assumptions about knowledge, upon which most current speculation about organizational knowledge is based, offer a compartmentalized and static approach to the subject. KWS is "groupware" designed for use by collaborative workgroups. Processes can be assigned across organizations to support matrixes management.

Knowledge workers can assign tasks to themselves, to other knowledge workers, or to a group of knowledge workers. KWS improves workgroup coordination by allowing knowledge workers to retrieve and update milestones, task completion, and priority status information. Data workers typically have less formal, advanced educational degrees and tend to process rather than create information. They consist primarily of secretaries, accountants, filing clerks, or managers whose jobs are principally to use, manipulate, or disseminate information.

3. Decision support system (DSS) A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. DSSs include knowledge-based

systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present are:

 Inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts), Comparative sales figures between one period and the next, Projected revenue figures based on product sales assumptions. Decision Support System Requirements Data collection from multiple sources (sales data, inventory data, supplier data, market research data. etc.) Data formatting and collation A suitable database location and format built for decision support -based reporting and analysis Robust tools and applications to report, monitor, and analyse the data.

4. Executive Support System (ESS) Executive Support System (ESS) is a reporting tool (software) that allows you to turn your organization's data into useful summarized reports. These reports are generally used by executive level managers for quick access to reports coming from all company levels and departments such as billing, cost accounting, scheduling, and more. In addition to providing quick access to organized data from departments, some Executive Support System tools also staffing,

provide an analysis tool that predicts performance a series outcomes of over

time using the input data. This type of ESS is useful to executives as it provides possible outcomes and quick

reference to statistics and numbers needed for decision-making. The exact reporting tools and outcome of an Executive Support System completely depends on the ESS developer and its intended industry use.

5. Management information system (MIS) A management information system (MIS) is a system that provides information needed to manage organizations efficiently and effectively. Management information systems involve three primary resources:

technology, information, and people. It's important to

recognize that while all three resources are key components when studying management

information systems, the most important resource is people. Management information

systems are regarded as a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Management information systems are distinct from regular information systems in that they are used to analyse other information systems applied in operational activities in the organization. Generally, MIS is concerned with planning and control. Often there are elaborate systems for information that assists operations. For example, the car manufacturer will have a system for providing information to the workers on the shop floor about the job that needs to be done on a particular batch of material.

There may be route sheets, which accompany the rate materials and components in their movement through various machines. This system per se provides only information to support operation. It has no managerial decision-making significance. It I not part of an MIS. If, however, the system does provided information on productivity, machine utilization or rejection rates, then we would say that the system is part of an MIS. An MIS provides the following advantages. 1. It Facilitates planning: MIS improves the quality of plants by providing relevant information for sound decision making. Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations. 2. In Minimizes information overload: MIS change the larger amount of data in to summarize form and there by avoids the confusion which may arise when managers are flooded with detailed facts. 3. MIS Encourages Decentralization: Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures. 4. It brings Co-ordination: MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centres in the organization. 5. It makes control easier: MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost.

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.

6. Office automation systems Office automation systems (OAS) are configurations of networked computer hardware and software. A variety of office automation systems are now applied to business and communication functions that used to be performed manually or in multiple locations of a company, such as preparing written communications and strategic planning. In addition, functions that once required coordinating the expertise of outside specialists in typesetting, printing, or electronic recording can now be integrated into the everyday work of an organization, saving both time and money. Types of functions integrated by office automation systems include (1) Electronic publishing; (2) Electronic communication; (3) Electronic collaboration; (4) Image processing; and (5) Office manage ment.

At the heart of these systems is often a local area network (LAN). The LAN allows users to transmit data, voice, mail, and images across the network to any destination, whether that destination is in the local office on the LAN, or in another country or continent, through a connecting network. An OAS makes office work more efficient and increases productivity.

Relation between Various Systems

Different systems serve variety of functions, and even to integrate them together as using enterprise resource planning (ERP) is much more easy but connecting organizational levels is difficult, and costly.

A management team in a company need to be more innovative to have new business strategies as competitive advantage. Competitors can copy strategic systems.

Hierarchy of systems
1. Operational-level systems

a. support operational managers by keeping track of the elementary activities & transactions of the org such as sales, receipts, cash deposits 2. Knowledge-level systems a. Support the organizations knowledge and data worker. b. It helps the company to discover, organize and integrate new knowledge into business and to control the flow of paperwork. 3. Management-Level system a. monitor, control, decision-making & administrative activities of middle managers b. controlling whether everything in company is working well, whether actual costs exceed budgets 4. Strategic-Level Systems a. help senior management tackle and address strategic issues and long-term trends, both in the firm and the external environment.

What is Strategic Info System? Change the goals, operations, products, services or environmental relationships of org to help them gain an edge over competitors. Used at all organizational levels. 2 models of a firm and its environment have been used to identify areas of business where IS can provide advantage over competitors.

Using Information System to achieve Competitive Advantage. A firm do better than others are said to have a competitive advantage over others. For example, Apples iTunes is the leader with more than 75% of the downloaded music market. To understand competitive advantage, Michael Porters competitive forces model can be used.

Competitive forces modal

Competitive Forces used to describe the interaction of external influences, specifically threats and opportunities that affect an orgs strategy and ability to compete. E.g.: Threats & Opportunities new entrants into market, pressure from substitute products or services, customers & Suppliers bargaining power

Michael Porters competitive forces model

In Porters competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industrys environment: new market entrants, substitute products, bargaining power of customers, and bargaining power of suppliers. Michael Porters competitive forces model Entry of competitors How easy/difficult is it for new entrants to start competing which barriers do exist. Threat of substitutes Substitutes goods or services from outside an industry that perform the same functions as a product that the industry produces. For example, substitutes good for Milo might be coffee How easy/difficult a product or service can be substitute, especially made cheaper. Entry of competitors How easy/difficult is it for new entrants to start competing which barriers do exist. Threat of substitutes Substitutes goods or services from outside an industry that perform the same functions as a product that the industry produces. For example, substitutes good for Milo might be coffee

 How easy/difficult a product or service can be substitute, especially made cheaper? Bargaining power of buyers Customers will bargain for higher quality, greater levels of services and lower prices. Bargaining power of buyers seems to be increased with the used of Internet where they have more choices to compare for price from different manufacturers. Customers are powerful when: They purchase a large portion of an industrys total output The sales of the product being purchased account for a significant portion of the sellers annual revenues. They could switch to another product at little if any cost The industrys products are undifferentiated or standardized and the buyers pose a credible threat if they were to integrate backward into the sellers industry. Bargaining power of suppliers Increasing prices and reducing the quality of its products are potential means used by suppliers to exert power over firms competing within an industry. If a firm is unable to recover cost increase by its suppliers, then their profitability level is decrease because of the suppliers action. A supplier group is powerful when;

 It is dominated by a few large companies and is more concentrated than the industry to which it sells. Satisfactory substitute products are not available to industry firms. Industry firms are not a significant customer for the supplier group Suppliers goods are critical to buyers marketplace success Intensity of rivalry among competitors Does a strong competition exist among the existing competitors in the market. Competitive rivalry intensifies when a firm is challenged by a competitors actions or when an opportunity to improve its market position is recognized. Visible dimensions on which rivalry is based include price, quality and innovation. Achieving a Competitive Advantage Competitive advantage is achieved when a for-profit company increases its profits significantly, usually through increased market share Many initiatives can be used to gain competitive advantage Strategic moves often combine two or more initiatives The essence of strategy is innovation.

RELATIONSHIPS OF SYSTEM TO ONE ANOTHER TPS are typically a major source of data for other systems, whereas ESS is primarily a recipient of data from lower-level systems. The other types of systems may exchange data with each other as well. Data may also be exchanged among systems serving different functional areas. For example, an order captured by a sales system may be transmitted to a manufacturing system as a transaction for producing or delivering the product specified in the order or to a MIS for financial reporting. It is definitely advantageous to integrate these systems so that information can flow easily between different parts of the organization and provide management with an enterprise-wide view of how the organization is performing as a whole. But integration costs money, and integrating many different systems is extremely time consuming and complex. This is a major challenge for large organizations, which are typically saddled with hundreds, even thousands of different applications serving different levels and business functions. Each organization must weigh its needs for integrating systems against the difficulties of mounting a large-scale systems integration effort. RELATIONSHIP ORGANIZATIONS The way information is managed and used is very much a product of the culture and management style of the organization; BETWEEN INFORMATION SYSTEMS AND

changes in organizational structures and methods of using human resources, together with the virtually universal implementation of information technology, could have a significant effect on the way information is perceived and used by organizations;

current management thinking puts information and cross-functional access to information at the core of business operations; an adaptive corporate culture encourages employees to work at their highest achievement level and is able to absorb change. This kind of culture, which is thought necessary for long-term growth, has characteristics in common with an information culture;.

information systems are being implemented to gain competitive advantage: the management of these systems and their content are seen is seen as crucial to their effectiveness.

Corporate know-how, human resources, and information systems are being identified as hidden assets and are now emerging from hiding.

Relationship Diagram

Bibliography
http://www.scribd.com/doc/49605260/5/Office-Automation-Systems-OAS http://www.forteconnections.com/oas.html http://www.google.co.in/search?q=management+information+system&hl=en&prmd=ivnsb &tbm=isch&tbo=u&source=univ&sa=X&ei=osNtTpGlB4a1hAed3vE7&ved=0CFkQsAQ&biw=1 366&bih=624 http://en.wikipedia.org/wiki/Management_information_system http://www.google.co.in/search?q=executive+support+system&hl=en&prmd=ivnsb&tbm=is ch&tbo=u&source=univ&sa=X&ei=osBtTqGhK4bjrAf3lsmZBQ&ved=0CEkQsAQ&biw=1366&b ih=624 http://wiki.answers.com/Q/Advantages_and_Disadvantages_of_executive_support_system http://www.scribd.com/doc/9657403/Executive-Support-Systems-ESS http://en.wikipedia.org/wiki/Executive_information_system http://www.webopedia.com/TERM/E/Executive_Support_System.html http://www.tech-faq.com/decision-support-system.html http://www.webopedia.com/TERM/D/decision_support_system.html http://www.microstrategy.com/decision-support-system/ http://www.erdc.usace.army.mil/pls/erdcpub/www_welcome.navigation_page?tmp_next_ page=39811 http://wiki.answers.com/Q/Definition_of_knowledge_work_system http://business-fundas.com/2011/information-technology-and-information-systems/

http://en.wikipedia.org/wiki/ACID