Name: ShivaRanjani Roll Number:

Subject: MANAGEMENT INFORMATION SYSTEMS Assignment Number: MB0031 – SET 1

Study Center:
Date of Submission: March, 2009
MBOO31 – MANAGEMENT INFORMATION SYSTEMS
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SET – 1 SOLVED ASSIGNMENT
Q 1: Define MIS ? What are the characteristics of MIS? Answer:
MIS is an Information system which helps in providing the management of an organ
ization with information which is used by management for decision making. A mana
gement information system (MIS) is a subset of the overall internal controls of
a business covering the application of people, documents, technologies, and proc
edures by management accountants to solving 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 analyze othe
r information systems applied in operational activities in the organization. Aca
demically, the term is commonly used to refer to the group of information manage
ment methods tied to the automation or support of human decision making, e.g. De
cision Support Systems, Expert systems, and Executive information systems. An 'M
IS' is a planned system of the collecting, processing, storing and disseminating
data in the form of information needed to carry out the functions of management
. According to Philip Kotler "A marketing information system consists of people,
equipment, and procedures to gather, sort, analyze, evaluate, and distribute ne
eded, timely, and accurate information to marketing decision makers." The terms
MIS and information system are often confused. Information systems include syste
ms that are not intended for decision making. The area of study called MIS is so
metimes referred to, in a restrictive sense, as information technology managemen
t. That area of study should not be confused with computer science. IT service m
anagement is a practitioner-focused discipline. MIS has also some differences wi
th Enterprise Resource Planning (ERP) as ERP incorporates elements that are not
necessarily focused on decision support. MIS has a major impact on the functions
of any organization. The organization derives benefits from the systems in the
following form: a) b) c) d) e) f) Speedy access to information, Interpretation o
f data, Quick decisions, Speedy actions, increased productivity and thereby incr
ease in the profit Reduced transaction cost.
MIS characteristics In any organization managers will have varieties of tasks to
manage. MIS is mainly designed to take care of the needs of the managers in the
organization. • Organizations will have different departments like marketing, p
roduction, sales, inventory, maintenance etc. Each of these departments function
individually and also in relationship with other departments. Information is av
ailable in abundance. MIS aids in integrating the information generated by vario
us departments of the organization. MIS helps in identifying a proper mechanism
of storage of data. The data is maintained in such a way that the unnecessary du
plication of data is avoided. MIS also helps in establishing mechanism to elimin
ate redundancies in data.
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• •
•
MIS as a system can be broken down into sub systems. Each such sub system may be
programmed. This results in easy access of data, accuracy of data and informati
on. It helps in maintaining the consistency of data.
Function of MIS The main function of MIS is to help the managers and the executi
ves in the organization in decision-making. • • • • • Large quantities of data l
ike customers information, competitors information, personnel records, sales dat
a, accounting data etc is collected from internal sources like the Company recor
ds and external sources like annual reports and publications. The collected data
is organized in the form of a database. The data from the database is processed
and analyzed by using different tools and techniques. The results of the analys
is are properly presented to the managers to help them in decision-making.
====================================================================== Q 2: Expl
ain strategic MIS categories in detail. Give relevant examples. Answer: Strategi
c Information System A Strategic Information System (SIS) is a system to manage
information and assist in strategic decision making. A strategic information sys
tem has been defined as, "The information system to support or change enterprise
's strategy." A SIS is a type of Information System that is aligned with busines
s strategy and structure. The alignment increases the capability to respond fast
er to environmental changes and thus creates a competitive advantage. An early e
xample was the favorable position afforded American and United Airlines by their
reservation systems, Sabre and Apollo. For many years these two systems ensured
that the two carriers' flights appeared on the first screens observed by travel
agents, thus increasing their bookings relative to competitors. A major source
of controversy surrounding SIS is their sustainability. SISs are different from
other comparable systems as: 1) they change the way the firm competes. 2) they h
ave an external (outward looking) focus. 3) they are associated with higher proj
ect risk. 4) they are innovative (and not easily copied).
It is mainly concerned with providing and organization and its members an assist
ance to perform the routine tasks efficiently and effectively. One of the major
issue before any organization is the challenge of meeting its goals and objectiv
es. Strategic IS enable such organization in realizing their goals. Strategic In
formation System (SIS) is a support to the existing system and helps in achievin
g a competitive advantage over the organizations competitors in terms of its obj
ectives. This unit deals with the critical aspects of the strategic information
system. This units indicates the theoretical concepts and the way in which the s
ame are realized in practice. The flow of the unit is in such a way that it star
ts with the development of contemporary theory about strategic uses of corporati
ons' internal information systems leading to systems which
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transcend the boundaries of particular organizations. The process whereby strate
gic information systems are created or identified is then examined. A number of
weaknesses in the existing body of theory are identified, and suggestions made a
s to directions in which knowledge is or may be progressing. A strategic informa
tion system is concerned with systems which contribute significantly to the achi
evement of an organization's overall objectives. The body of knowledge is of rec
ent origin and highly dynamic, and the area has an aura of excitement about it.
The emergence of the key ideas, the process whereby strategic information system
s come into being is assessed, areas of weakness are identified, and directions
of current and future development suggested. Information system is regarded as a
tool to provide various services to different management functions. The tools h
ave been developing year by year and the application of the tool has become more
and more diverse. In management it is now a very power means to manage and cont
rol various activities and decision making process. The original idea of automat
ing mechanical processes got quickly succeeded by the rationalization and integr
ation of systems. In both of these forms, IS was regarded primarily as an operat
ional support tool, and secondarily as a service to management. Subsequent to th
e development, it was during the last few years that an additional potential was
discovered. It was found that, in some cases, information technology (IT) had b
een critical to the implementation of an organization's strategy. An organizatio
n’s strategy supported by information system fulfilling its business objectives
came to be known as Strategic Information System. The strategic information syst
em consists of functions that involved gathering, maintenance and analysis of da
ta concerning internal resources, and intelligence about competitors, suppliers,
customers, government and other relevant organizations.
======================================================================== Q 3: Wr
ite a detailed note on the planning and development of MIS? Answer:
Information is a corporate resource, as important as the capital, labour, know-h
ow etc. and is being used for decision-making. Its quality, therefore, is requir
ed to be very high. A low quality information would adversely affect the organiz
ational performance as it affects decision-making. The quality of information is
the result of the quality of the input data, processing design, system design,
system and procedures which generate such a data, and the management of the data
processing function. Quality, unlike any other product, is not an absolute conc
ept. Its level is determined with reference to the context and its use, and the
user. Perfect quality just as perfect information is nonachievable and has cost-
benefit implications. However, it is possible to measure the quality of informat
ion on certain parameters. All these parameters need not have a very high value.
Some parameters may have lesser importance in the total value on account of the
ir relevance in the information and its use. The quality parameters which are ge
nerally considered are shown in the table Individual differences
Locus of control internal or external
Explanation
The degree of perception in assessing the control
Effect information processing
on Examples
The production decisions, selection
More information gathering and
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to the situation.
which is internal to the organization or external to the organization. The degre
e of faith in beliefs, opinions and past experience. The ability to take the ris
k. for Level of clarity required in the information. The ability to read through
the information. The ability to manipulate the data and information vis-à-vis t
he stored information and knowledge. Extent of experience at particular level of
decision making.
analysis, if internal.
of tools and materials etc. The pricing, advertising in a Competitive environmen
t. The top management decision-making in a strategic planning. Manager Constantl
y asking for more information. Experienced and skillful managers rely on the man
ipulative intelligence. The managers with a wide experience in the different fie
lds of management call for precise and less but pertinent information. The Techn
ocrat scientists, and managers of technology have definite information.
Personal dogmatism.
Low dogmatism, then more information collection and processing. Higher, then mor
e information gathering and analysis. Tight tolerance then more information coll
ection and analysis. High ability, then less information and more self analysis.
Risk propensity.
Tolerance ambiguity.
Manipulative intelligence.
Experience in decision-making.
High, then correct filtering of data and appropriate choice of decision makingpr
ocess.
Knowledge of the task, tools and technology.
The extent of knowledge in the application of the tools and technology.
Higher, then less information relevant to and tools correct analysis.
The quality of these important parameters is ensured by conducting a proper syst
ems analysis, designing a suitable information system and ensuring its maintenan
ce from time to time, and also subjecting it to audit checks to ensure the syste
m integrity. The quality of the parameters is assured if the following steps are
taken. 1. All the input is processed and controlled, as input and process desig
n. 2. All updating and corrections are completed before the data processing begi
ns. 3. Inputs (transactions, documents, fields and records) are subject to valid
ity checks. 4. The access to the data files is protected and secured through an
authorization scheme. 5. Intermediate processing checks are introduced to ensure
that the complete data is processed right through, i.e. run to run controls. 6.
Due attention is given to the proper file selection in terms of data, periods a
nd so on. 7. Backup of the data and files are taken to safeguard corruption or l
oss of data. 8. The system audit is conducted from time to time to ensure that t
he information system specifications are not violated.
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9. The system modifications are approved by following a set procedure which begi
ns with authorization of a change to its implementation followed by an audit. 10
. Systems are developed with a standard specification of design and development.
11. Information system processing is controlled through programme control, proc
ess control and access control. 12. Ensure MIS model confirms consistency to bus
iness plan satisfying information needs to achieve business goals. The assurance
of quality is a continuing function and needs to be evolved over a period and r
equires to be monitored properly. It cannot be assessed in physical units of mea
sure. The user of the information is the best judge of the quality.
=================================================================== Q 4: Explain
in detail the necessity and importance of System Design in MIS. Answer: =======
============================================================== Q 5: Explain the
challenges before an E-business management. Answer: Managing an E-business & Cha
llenges before an E-business - Due to Internet
capabilities and web technology, traditional business organization definition ha
s undergone a change where scope of the enterprise now includes other company lo
cations, business partners, customers and vendors. It has no geographic boundari
es as it can extend its operations where Internet works. All this is possible du
e to Internet and web moving traditional paper driven organization to informatio
n driven Internet enabled E-business enterprise. E-business enterprise is open t
wenty-four hours, and being independent, managers, vendors, customers transact b
usiness any time from anywhere. Internet capabilities have given E-business ente
rprise a cutting edge capability advantage to increase the business value. It ha
s 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 operatio
ns has come down significantly due to the elimination of paper-driven processes,
faster communication and effective collaborative working. The effect of these r
adical changes is the reduction in administrative and management overheads, redu
ction 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 by
information and knowledge to perform their role. They are supported by informati
on systems, application packages, and decision-support systems. It is no longer
functional, product, and project or matrix organization of people but E-organiza
tion where people work in network environment as a team or work group in virtual
mode. Ebusiness enterprise is more process-driven, Technology-enabled and uses
its own information and knowledge to perform. It is lean in number, flat in stru
cture, broad in scope and a learning organization. In E-business enterprise, mos
t of the things are electronic, use digital technologies and work on databases,
knowledge bases,
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directories and document repositories. The business processes are conducted thro
ugh enterprise software like ERP, SCM, and CRM supported by data warehouse, deci
sion support, and knowledge management systems. Today most of the business organ
izations are using Internet technology, network, and wireless technology for imp
roving the business performance measured in terms of cost, efficiency, competiti
veness and profitability. They are using E-business, Ecommerce solutions to reac
h faraway locations to deliver product and services. The enterprise solutions li
ke ERP, SCM, and CRM run on Internet (Internet / Extranet) & Wide Area Network (
WAN). The business processes across the organization and outside run on Etechnol
ogy platform using digital technology. Hence today s business firm is also calle
d E-enterprise or Digital firm. The paradigm shift to E-enterprise has brought f
our transformations, namely: • Domestic business to global business. • Industria
l manufacturing economy to knowledge-based service economy. • Enterprise Resourc
e Management to Enterprise Network Management. • Manual document driven business
process to paperless, automated, electronically transacted business process. Th
ese transformations have made conventional organization design obsolete. In E-en
terprise, business is conducted electronically. Buyers and sellers through Inter
net drive the market and Internet-based web systems. Buying and selling is possi
ble on Internet. Books, CDs, computer, white goods and many such goods are bough
t 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 Inte
rnet E-banking, E-billing, E-audit, & use of Credit cards, Smart card, ATM, E-mo
ney 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 re
ality and is going to increase in number. MIS for E-business is different compar
ed to conventional MIS design of an organization. The role of MIS in E-business
organization is to deal with changes in global market and enterprises. MIS produ
ces more knowledge-based products. Knowledge management system is formally recog
nized as a part of MIS. It is effectively used for strategic planning for surviv
al and growth, increase in profit and productivity and so on. To achieve the sai
d benefits of E-business organization, it is necessary to redesign the organizat
ion to realize the benefits of digital firm. The organization structure should b
e lean and flat. Get rid of rigid established infrastructure such as branch offi
ce 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 challen
ge is to convert domestic process design to work for international process, wher
e integration of multinational information systems using different communication
standards, country-specific accounting practices, and laws of security are to b
e adhered strictly. Internet and networking technology has thrown another challe
nge to enlarge the scope of organization where customers and vendors become part
of the organization. This technology offers a solution to communicate, coordina
te, and collaborate with customers, vendors and business partners. This is just
not a technical change in business operations but a cultural change in the minds
et of managers and workers to look beyond the conventional organization. It mean
s changing the organization behaviour to take competitive advantage of the E-bus
iness technology. The last but not the least important is the challenge to organ
ize and implement information architecture and information technology platforms,
considering multiple
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locations and multiple information needs arising due to global operations of the
business into a comprehensive MIS.
E-COMMERCE is a second big application next to ERP. It is essential deals with b
uying and selling of goods. With the advent of intent and web technology, E-Comm
erce today covers an entire commercial scope online including design and develop
ing, marketing, selling, delivering, servicing, and paying for goods. Some E-Com
merce application add order tracking as a feature for customer to know the deliv
ery status of the order. The entire model successfully works on web platform and
uses internet technology. ECommerce process has two participants, namely Buyer
and Seller, like in traditional business model. And unique and typical to E-comm
erce there is one more participant to seller by authorization and authentication
of commercial transaction. E-Commerce process model can be viewed in four ways
and categories: • B2C: Business Organisation to Customer • B2B: Business Organis
ation to Business • C2B: Customer to Business Organisation • C2C: Customer to Cu
stomer In B2C Model, business organization uses websites or portals to offer inf
ormation about product, through multimedia clippings, catalogues, product config
uration guidelines, customer histories and so on. A new customer interacts with
the site and uses interactive order processing system for order placements. On p
lacements of order, secured payment systems comes into operation to authorize an
d authenticate payment to seller. The delivery system then take over to execute
the delivery to customer. In B2B Model, buyer and seller are business organizati
ons. They exchange technical & commercial through websites and portals. Then mod
el works on similar line like B2C. More advanced B2B model uses Extranet and Con
ducts business transaction based on the information status displayed on the buye
r’s application server. In C2B Model, customer initiates actions after logging o
n to seller’s website or to server. On the server of the selling organization, E
-Commerce application are present for the use of the customer. The entire Intern
et banking process work on C2B model where account holders of the bank transact
a number of requirements such as seeking account balance, payment and so on. In
C2C model, Customer Participates in the process of selling and buying through th
e auction website. In this model, website is used for personal advertising of pr
oducts or services. ENewspaper website is an Example of advertising and selling
of goods to customer. In B2B Model, the participants in E-business are two organ
isation with relations as buyer=seller, distributor-dealer and so on. E-Collabor
ation every business has a number of work scenarios where group of people work t
ogether to complete the tasks and to achieve a common objective. The group could
be teams or virtual teams with different member strength. They come together to
platform a task to achieve some results. The process is called Collaboration. T
he Biggest Advantage of ECollaboration is that it taps the collective wisdom, kn
owledge and experience of the members. The collaboration team or group could be
within the organization and between the organisation as well. Since, E-Collabora
tion works on an internet platform and uses web technology, work group/team need
not be at one physical location. E-collaboration uses E-Communication capabilit
ies to perform collaborative tasks or project assignment. Its effectiveness is i
ncreased by software ‘GroupWare’ that enables the members of the group to share
information, invoke an application and work together to create documents and sha
re them and so on.
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E-Collaboration helps work effectively on applications like calendaring and sche
duling tasks, event, project management, workflow application, work group applic
ation. E-collaboration system components are internet, Intranet, Extranet and LA
N, WAN networks for communication through GroupWare tools, browser. Let us illus
trate the model using an event in the business such as receipt of material for a
job to be processed on the shop floor. In this event there is a transaction rec
eipt of material, which needs to be processed, and then a workgroup will use thi
s information of material receipt. Each member of this workgroup has a different
goal.
====================================================================== 6: What i
s an internet? Explain the differences between internet, intranet and extranet.
Answer: Internet is a global network of interconnected computers, enabling users
to share information along multiple channels. Typically, a computer that connec
ts to the Internet can access information from a vast array of available servers
and other computers by moving information from them to the computer s local mem
ory. The same connection allows that computer to send information to servers on
the network; that information is in turn accessed and potentially modified by a
variety of other interconnected computers. A majority of widely accessible infor
mation on the Internet consists of inter-linked hypertext documents and other re
sources of the World Wide Web (WWW). Computer users typically manage sent and re
ceived information with web browsers; other software for users interface with c
omputer networks includes specialized programs for electronic mail, online chat,
file transfer and file sharing. The movement of information in the Internet is
achieved via a system of interconnected computer networks that share data by pac
ket switching using the standardized Internet Protocol Suite (TCP/IP). It is a "
network of networks" that consists of millions of private and public, academic,
business, and government networks of local to global scope that are linked by co
pper wires, fiber-optic cables, wireless connections, and other technologies. Di
fference between internet, intranet and extranet as follow:
Extranet : An extranet is a private network that uses the Internet protocols and
the public telecommunication system to securely share part of a business s info
rmation or operations with suppliers, vendors, partners, customers, or other bus
inesses. An extranet can be viewed as part of a company s intranet that is exten
ded to users outside the company. An extranet requires security and privacy. ...
A new buzzword that refers to an intranet that is partially accessible to autho
rized outsiders. Whereas an intranet resides behind a firewall and is accessible
only to people who are members of the same company or organization, an extranet
provides various levels of accessibility to outsiders. You can access an extran
et only if you have a valid username and password, and your identity determines
which parts of the extranet you can view. An extranet is somewhat very similar t
o an intranet. Extranets are designed specifically to give external, limited acc
ess to certain files of your computer systems to: • • Certain large or priviledg
ed customers. Selected industry partners.
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•
Suppliers and subcontractors... etc.
Therefore, a carefully designed extranet can bring additional business to your c
ompany. Intranets and extranets all have three things in common: • • • They both
use secured Internet access to the outside world. Both can drastically save you
r company or organization a lot of money. Both need a user ID & password to cont
rol access to the whole system.
The professional development team at My Web Services has the expertise and the r
ight tools to design the right intranet or extranet that will meet your exact ne
eds, both for today and the future. Intranet: An internal use, private network i
nside an organisation that uses the same kind of software which would also be fo
und on the Internet. Inter-connected network within one organization that uses W
eb technologies for the sharing of information internally, not world wide. Such
information might include organization policies and procedures, announcements, o
r information about new products. An intranet is a restricted-access network tha
t works like the Web, but isn t on it. Usually owned and managed by a company, a
n intranet enables a company to share its resources with its employees without c
onfidential information being made available to everyone with Internet access. A
network based on TCP/IP protocols (an internet) belonging to an organization, u
sually a corporation, accessible only by the organization s members, employees,
or others with authorization. An intranet s Web sites look and act just like any
other Web sites, but the firewall surrounding an intranet fends off unauthorize
d access. Like the Internet itself, intranets are used to share information. An
intranet is an information portal designed specifically for the internal communi
cations of small, medium or large businesses, enterprises, governments, industri
es or financial institutions of any size or complexity. Intranets can be custom-
designed to fit the exact needs of businesses no matter where they are situated.
Users of intranets consists mainly of: • Members of the executive team. • Accou
nting and order billing. • Managers and directors. • Sales people and support st
aff. • Customer service, help desk, etc..
Internet: An electronic network of computers that includes nearly every universi
ty, government, and research facility in the world. Also included are many comme
rcial sites. It started with four interconnected computers in 1969 and was known
as ARPAnet. A network of computer networks which operates world-wide using a co
mmon set of communications protocols. The vast collection of inter-connected net
works across the world that all use the TCP/IP protocols. A global network conne
cting millions of computers. A worldwide network of computer networks. It is an
interconnection of large and small networks around the globe. The Internet began
in 1962 as a resilient computer network for the US military and over time has g
rown into a global communication tool of more than 12,000 computer networks that
share a common addressing scheme.
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