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Copyright:
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ISBN:
978-93-5119-458-3
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CHAPTER NAME
PAGE NO.
01
27
Networking Concepts
51
Database Management
87
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149
167
189
217
10
237
11
251
12
273
13
295
14
Case Studies
319
CHAPTER NO.
C U R R I C U L U M
Introduction to Information System: Need of Information in Managing Business; Evolution of
Information Systems; Information and Control Systems; Classification of Information Systems;
Business Process Design; Managing Information Systems
Components of Information Technology: Computer Systems Hardware; Software Concepts; Networking Concepts; Database Concepts
Types of Information Systems: Introduction to Information Systems; Operations Support Systems; Management Support Systems; Other Types of Information Systems
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Building and Deploying an Information System: Information System Architecture; Software Development Lifecycle; Software Development Models; Requirement Analysis & Design Considerations; Software Testing; Deploying an Information System
Managing Information Systems: Infrastructure Management; Maintenance of Information Systems; Management of Changing Requirements; Incidence Handling; Disaster Recovery and Business Continuity Planning
1.3
1.4
1.4.1
1.4.2
1.4.3
1.4.4
1.4.5
1.4.6
1.2.1
1.2.2
Introduction
Meaning of Information
Difference between Data and Information
Importance of Information for Organisations
Self Assessment Questions
Activity
Concept of System
Self Assessment Questions
Activity
Definition of an Information System
Evolution of Information System
Need of Information System in Organisation
Functions of Information Systems
Framework of an Information System
Information and Control Systems
Computerised Information System
Self Assessment Questions
Activity
Business Process Design
Business Process Modelling
Business Process Re-engineering with diagram
Self Assessment Questions
Activity
Management Information Systems
Nature and Scope of MIS
Features of MIS
Functions of MIS
Self Assessment Questions
Activity
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1.1
1.2
1.5
1.5.1
1.5.2
1.6
1.6.1
1.6.2
1.6.3
CONTENTS
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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1.7
1.8
1.9
1.10
INTRODUCTORY CASELET
IMPLEMENTATION OF INFORMATION SYSTEM
AT RED INDIAN AUTOMOBILES
The Red Indian automobiles company was launched by three
partners. In the initial days, the company had success in its business. However, soon this success disappeared as the company was
not able to make enough sales. The company made many efforts
to get customers attention but without positive results. After a
detailed market research, it was found that the other competitors
had better car design models coupled with attractive offers to
grab customer attention.
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After a long discussion the company decided to hire an Information Technology (IT) consultant to find a solution to the problem. The IT consultant team suggested a new computerised information system and a designing tool that make car designing
and modelling easier and faster. The company implemented the
systems and was surprised to see the efficiency and effectiveness
of the outcome. The new computerised information system was
really fast and able to perform a different kind of analysis on data
which was earlier ignored by the managers of Red Indian automobiles. Data analysis provided the company useful information
about their business operations and customers demands. They
also created better designs using the car designing tool. New car
designs were impressive and were able to attract customers in the
market.
Eventually, customers started coming back to the company and
sales began to improve.
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LEARNING OBJECTIVES
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1.1 INTRODUCTION
In your life, you must have withdrawn money from an ATM machine
or at least seen someone withdrawing money from the ATM machine.
Have you ever wondered what kind of system is being followed by the
ATM machine to provide you all the information regarding your bank
account? The system that is followed by an ATM machine is called
information system.
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1.2.1
Description
Text
Graphic
Images, Pictures
Audio
Sound, Tone
Video
Data and information are two different things and both have different
purposes and properties. Table 1.2 shows the difference between data
and information:
Information
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1.2.2
IMPORTANCE OF INFORMATION
FOR ORGANISATIONS
Information is of great importance for an organisation to function successfully. Without effective information generating system, an organisation cannot function properly. In addition, lack of effective and proper
information may send a wrong signal to other associated organisations.
For instance, if a vendor has not heard from a supplier, he might misinterpret this as rudeness which might never be the intention of organisation. The continuous and steady flow of information helps an
organisation to build credibility, transparency in business interaction.
Information plays a key role in many critical tasks such as decision making. The importance of information for organisations is listed below:
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ACTIVITY
Using the Internet find out, how organisations manage their data
and information. Present your findings in a short note.
We all use some or the form of the vehicle in our day- to- day lives.
But have you ever wondered how these vehicles function. A vehicle is
made of many parts such as battery, brakes, gear, steering or handle,
etc. and all these parts have their own specific function. All the parts
are connected to each other and if there is an issue with one part, it
will affect the functioning of the other part. Thus, a vehicle is a system
comprising different parts interrelated to function effectively.
A system can be described as a set of components which are interdependent and organised for a common purpose. A system is outlined
by its boundaries and it is surrounded and influenced by its environment. You can define a system by its structure and purpose and express in its functioning.
Now, let us consider some of the features of a system in the following
section.
Objective: Every system has a predefined objective that it has to
achieve. For example, an organisations main objective is to earn
the maximum possible profit for each department. Thus, everyone
in the organisations has to work together to achieve this goal.
NMIMS Global Access - School for Continuing Education
Standards: A system is a standard that has been accepted by experts to achieve an objective. For example, there could be multiple
ways to solve a problem but only the best way can be a standard.
Environment: Every system needs to adapt itself according to the
environment. It is required for a system to fit in its environment.
For example, you cannot fit the engine of a car in a motor bike.
Boundaries: Every system has its boundaries and it has to work
within this boundary. Nonetheless, there are times when a system
has to interact with other systems beyond its boundaries. For example, every system in an organisation has its work domain such
as personal, financial, and marketing, but if the personal system
needs the financial information regarding employees then it has to
interact with the financial system.
Structure: Every system has a structure that is determined by its
parts and their composition.
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Interconnectivity: Systems have interconnectivity which establishes functional and structural relationship among its various parts.
SELF ASSESSMENT QUESTIONS
a. standards
b. boundaries
c. cost-effective
d. structure
ACTIVITY
Use the internet to find out how a system is implemented in an organisation. Present your findings in a short note.
1.4
DEFINITION OF AN INFORMATION
SYSTEM
Sorting
Process Calculating
Analysing
End
User
End
User
End
User
Input
Data from
various
internal or
external
sources
Structured
and
meaningful
Output information
useful for
business
functions
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Data
Storage
The data is either stored on paper or in electronic format. Critical calculations, logical analysis and other statistical methods are used to
process data. After processing data, it is converted in information. The
information retrieved is distributed to various end users to help them
in their decision-making, problem solving, strategy forming and controlling functions in an organisation.
For example, consider the data regarding individual sales made by
each sales executive in a particular month, and the standard sales target for each sales executive and trends in sales market in that month.
You can sort, classify, and analyse this data to retrieve information.
Using this information, you can perform analysis on the sales trends
for that time period, difference between target and actual sales for individual executive and aggregate sales based on teams. This data can
also be used to make predictions of following months sales and set
target for the subsequent month.
1.4.1
Information system has evolved with the time. This evolution in IS was
necessary as the requirements of a business keep changing. There are
certain trends in the business environment that made the evolution of
IS possible.
Description
Before 1960s,
In 1960s
In 1970s
In 1980s
Onwards 1990s
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1.4.2
When you visit a bank to deposit some money, you give money to the
cashier and some information regarding your account. But have you
ever thought how a bank manages a huge amount of information
about customers? Bank and other organisations deal with their huge
amount of data using the information systems. Every organisation
needs an information system to manage their business.
An organisation needs to take full advantage of IS to get maximum
benefits. In order to obtain maximum benefits from IS you need to
utilise all its capacities. IS helps management functions of an organisation.
The need for IS in an organisation is as follows:
Communication: IS helps in communication of an organisation
and accomplishes the information needs of an organisation in
defining goals. The management of an organisation collects and
distributes information. IS makes this process more efficient by
enabling managers to communicate swiftly. It simplifies the moveNMIMS Global Access - School for Continuing Education
ment of information amongst employees of different levels. Managers use IS to share information with other employees who require
the information. The information system provides an effective
communication platform that helps employees to collaborate in a
systematic way.
Operations: Information system provides complete and updated information which allows you to perform business operation
more efficiently. It helps organisation to enhance productivity and
improve customer service. Information system is also needed for
improving product quality. For example, if an organisation has information that customers have a preference for a specific product
in a particular season. Then, organisation can start planning the
production of that product in advance before the onset of that particular season. Here, information system will guide you to streamline your operations.
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Mr Mohan is head of human resource (HR) department of a multinational company. His boss asked him to generate a report for the employees who have taken minimum leaves in the last year. On the basis
of these reports, the employees with the minimum number of leaves
were to be rewarded with bonus money. Mr Mohan took the list of total
number of employees and placed their leave data in the information
system. The information system processed the data and provided the
information required in the form of a report. The information system
completed the task in no time. This helped the boss to make decision
for rewarding the deserving employees.
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Output: Output is the result you get after processing the input.
It is not cost efficient to spend money on input if you are not getting any output. For example, if you are spending x amount on
research and will get less than this amount in future. An organisation could get output in different forms such as money and feedback. You can observe the input and output of someones job to
determine whether their work is creating any value.
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Closed and open systems: Closed and open are two types of systems. In closed system organisation keeps an internal relationship.
Closed systems do not disclose their profits or losses for the past
year. On the other hand, an open system shares its information
publicly. It allows the outside world to look at their profit and losses. Both these systems have their own advantages. In closed systems, sharing any information to rival businesses is not permitted
and in open systems we allow other people to see and observe our
profits to create new business opportunities.
The primary goal of the ISF is to define numerous key building blocks
that establish the primary information system that are currently used
in management to provide a clear set of definitions, roles and responsibilities applicable in context. The ISF brings together a number of
perspectives including control, monitoring and business.
IS comprises many complex technologies and applications. Five essential areas required for the framework of IS are:
Foundation: It means the fundamental concepts of an IS. It includes fundamental business environment, basic components and
managerial concepts. For example, the basic system has developed
result-oriented systems.
Information Technology: It consists of technical components for
an IS. It includes hardware, software and networks. For example,
internet-based information sharing developed e-business.
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1.4.5
Have you ever wondered if you were unable to control the temperature of a microwave oven, you might not be able to heat or cook the
food as desired? Also, how will you drive a car if there was no steering
wheel in it? Thus, control is essential to make these machines work.
For instance, while driving the car you need to take a right turn, so you
will make use of steering wheel for turning right.
In this case, you used the information and controlled the outcome.
Similarly in business organisation we use information and control systems to control business outcomes of a process.
Thus, control can be defined as the process in which it is determined
whether the business is functioning according to desired standards or
not and if not what steps should be taken to rectify. Therefore, control
means maintaining the desired performance.
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People
Networks
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Information
Systems
Software
Hardware
Data
Now, let us consider some of the advantages of CBIS for an organisation in the following section:
Accessibility Speeds: A CBIS is able to sort, store and access data
much faster. It can quickly analyse data and find the desired information.
Security: It provides a protected environment for data files. It protects data using passwords and encryption (a mechanism to encode your data) so that only authorised users can access the data.
Manual information systems do not provide such kind of security.
In a manual security system, it is not easy to monitor and check the
people who have access to data. It also does not provide role based
access to data which is provided by a CBIS. For example, you can
allow some users to read and write data and prevent some users
from making any changes.
Track Changes: In manual information systems it is almost impossible to track changes without going through a huge amount
of paperwork. Using CBIS you can record which user accessed
which data, access time of data and any changes made by the user.
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There are numerous types of systems that are used by the organisations. However, there are some fundamental systems that are more
popular among these organisations. Figure 1.3 shows some popular
types of CBIS among organisations.
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Executive
Information
Systems
Executive
Senior Managers
Decision Support
Systems
Middle Managers
Management
Information Systems
Workers
Transaction Processing
Systems
Figure 1.3 shows some popular types CBIS. These types will be discussed in chapter 5 of this book.
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SELF ASSESSMENT QUESTIONS
c.
Processing
b. Storage
d.
Input
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According to Hammer & Champy a process is a collection of activities that takes one or more kinds of input and creates an output that is of
value to the customer.
According to Rummler & Brache a business process is a series of
steps designed to produce a product or service.
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In information system, Business process modelling (BPM) is an activity that represents processes of an enterprise, to analyse and improve
the current process. BPM is usually performed by business experts
or managers who wish to improve process efficiency and quality. The
involvement of information technology may not be required; however, Information Technology is a common factor in modelling business
processes.
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BPM concentrate on process, actions and activities. It is cross-functional, usually combines the work and documentation of multiple department in the organisation. There might be situations when BPM
may also include activities of other organisations processes systems
that support the primary process. BPM model is analysed and represented in more detail in large organisations as compared to smaller
organisations.
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BPM has various purposes in an organisation. These purposes are discussed as follows:
It is a diagram tool that is used to design process models.
It improves customer service and experience.
It reduces time and efforts.
It leads to increased profits.
It increases competitive advantage and market growth.
1.5.2 BUSINESS PROCESS REENGINEERING
According to Hamper and Champy business process re-engineering
is the fundamental rethinking and radical redesign of the business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed".
Business process re-engineering (BPR) can be defined as business
management strategy. BPR is a technique that allows us to rethink the
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For example, if a person visits a bank to apply for a loan, ATM card,
and a savings account. In order to perform all these three tasks, most
probably he has to go to three different counters. He has to give his
personal details and documents to all three counters and probably
wait in queue for a long time. However, the bank can simplify this process by adopting and implementing BPR. The bank can adopt a one
stop shopping approach to this case where all the operations can be
handled by a case manager. The case manager accepts the application
of the customer and stores it on the network where other team members can access it. Using this approach all three tasks can be done
in a parallel way. After the verification, if the details provided by the
customer are incorrect or give error the application is rejected, else
the loan team processes the loan application. During this process the
case manager instructs the account team to open a saving account and
ATM team to provide ATM card to the customer. All this can be done
without moving to separate counters for documents and signatures.
Everything is done at the same time and place.
Business process re-engineering is also known as business process
redesign, business transformation, or business process change management. Figure 1.4 shows BPR cycle.
Identify Processes
Review, Update
Analyse As-is
Design To-Be
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In the Figure 1.4 the first step, identifies the activities that can increase the value of organisations current process. Next, it analyses
the activities that can provide value to the customer. After that, the
new process is designed and tested before the implementation. If the
implementation fails, this cycle is performed again until the desired
outcome is achieved.
SELF ASSESSMENT QUESTIONS
ACTIVITY
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Have you ever visited a railway station to book a ticket? Earlier, getting
a train ticket from a railway station was a time consuming task. There
used to be a long queue at the ticket counter. It was also challenging
for the railway employees to manage the records of passengers and
train schedule as they used to perform all these tasks manually. It was
only after the introduction of Management Information System (MIS)
in the railways that the arduous task of railway employees became
fairly simple. MIS is an information systems for managing information. Now you can book and your tickets from anywhere using the
computer and the Internet.
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Information System
(Data, Process,
Information)
Management
(Planning,
Organising, Directing,
Controlling)
Management
Information
System
1.6.1
Internal and external sources are used to collect this data. This data
is processed using technical and analytical methods. After processing, the transformation of data is performed making it into meaningful
information. This information is used to make decisions and help to
improve efficiency and effectiveness of the organisation.
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FEATURES OF MIS
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Generating
information
Collection
of Data from
various sources
Data
Processing
Dissemination
of information
Storage of
data
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Storage of
information as
data
22
Data Storage: All the records are stored and retrieved, when required.
Data Processing: It comprises tasks, such as calculating, analysing, and summarising the collected data.
Information Generating: The collected data is transformed into
valuable and meaningful information after processing. This information is well structured and organised.
Information Storage: Information is saved again in the database
to be used in future. The same information can be processed again
if required.
Information Distribution: The information produced is distributed to users or managers to assist them in performing their tasks
efficiently. For example, report generation.
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ACTIVITY
Find out how MIS affects your day to day life. List down the areas
where you have seen the use of MIS.
1.7 SUMMARY
The outcome of an information system is called the information.
Information with good quality helps an organisation to make effective decisions.
Data is made of fact such as number of employees, salary, number
of inventory. In any information system data plays a key role because it signifies facts.
23
A system can be defined as a set of components which are interdependent and organised for a common purpose.
Information System (IS) is a process is an organised combination
of resources such as network of hardware, software, people that is
used to retrieve, filter, process, create and distribute data.
Control can be defined as the process in which it is determined
whether the business is functioning according to the standards or
not and if not what steps should be taken to tackle the problem.
Business process design is the method to comprehend and outline
the business activities that help the business to operate effectively.
Business process re-engineering (BPR) is a technique that allows
us to rethink the fundamentals and redesign the processes of business to achieve rapid improvements.
MIS is a source of information to the management which is helpful
in making effective decisions and well-organised business management.
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KEY WORDS
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Definition of an
Information System
Business Process
Design
Management Information Systems
Answers
1.
2.
False
3.
4.
c.
Cost-effective
5.
a.
Data recovery
6.
True
7.
product, service
8.
9.
False
Concept of System
Q.No.
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Topic
Meaning of Information
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2.3
2.3.1
2.3.2
2.3.3
2.2.1
2.2.2
2.2.3
2.2.4
Introduction
Hardware
Input Devices
Processing Devices
Storage Devices
Output Devices
Self Assessment Questions
Activity
Software Concepts
Operating Systems
Programming Languages
Ready-made Packages and their Operating Systems
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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2.1
2.2
2.4
2.5
2.6
2.7
INTRODUCTORY CASELET
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First, Richard Parker decided to install the new Windows 7 operating system and a firewall, which is a priority for any type of network security. The firewall software works as a barrier between
the network and the outside world. Then, Internet usage guidelines and policies were made for students and the teaching staff.
With the help of efficient software, the college network now was
secure and protected.
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2.1 INTRODUCTION
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Business organisations use information systems to achieve their target potential customers for managing the organisations financial accounts and human resources. Information systems have simplified
many human activities, which have made a positive impact on society. These systems have increased the speed of daily activities and
enhanced the efficiency of organisations. Data is a crucial part of information systems, and after being processed, this data delivers us
knowledge and information. This information has become a vital economic resource for every organisation.
2.2 HARDWARE
In todays world, every business organisation, whether small or big,
owns or leases computers. An organisation or an individual can own
one or more computers in the form of laptops, tablets, smart phones,
or any other portable device. Large organisations have distributed
computer systems located in remote data centres. These organisations
also use mobile devices, which are integrated into the organisational
information system.
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Together, all the peripheral equipment, such as storage discs, input-output devices, and telecommunication devices, constitute the
hardware of an information system. In the last few years, the cost of
hardware has rapidly decreased, whereas the cost of processing speed
and storage capacity has increased. However, the power consumption
of hardware is still a major concern being addressed by business organisations.
Hardware can be described as the collection of physical components of
a computer or the parts of a computer that can be physically touched.
Most hardware contains physical parts such as circuit boards, ICs (Integrated Circuits), and other electronic parts. A computer monitor is
an example of hardware, which displays the information on a screen.
A computer cannot exist without hardware. Also, software applications cannot run without hardware. Computer hardware consists of
four types of devices, as shown in Figure 2.1:
Types of Hardware
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Input Devices
Processing Devices
Storage Devices
Output Devices
INPUT DEVICES
Function Enter
Scroll
Indicators
Alphabetical
keys
Capitals
Lock
Numeric
Keypad
Shift
Control
Alt Windows Menu Control Shift Arrows
Number Pad
(Source: http://digitalunite.com/guides/computer-basics/how-to-use-a-computer-keyboard)
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Description
F1 - F12
Function keys have different usage based on the operating systems and the application.
Windows
Caps lock
Shift
Ctrl
The Ctrl (control) key is mainly used to perform various keyboard shortcuts such as ctrl + c for copying
data.
Alt
Back Space
Delete
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Description
Enter
Space bar
Esc
PrtScrn
Scroll lock
Pause
Break
Insert
Home
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Page up
Page down
Arrows
This is used to move the cursor in different directions such as up, down, left and right.
Num Lock
Indicators
Menu
This is used to open the context menu of the programme which is clicked.
Alphabetic Keys
Numeric Keys
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Through many years, the keyboard has evolved with new technologies.
Its design has been changed many times in the past several years, but
the basic layout of a keyboard is still the same. However, variations of
the common keyboard are now available. Following are some different
types of keyboards:
Standard Keyboard: A standard keyboard has 105 keys on an average, however, some still older versions of keyboards, with the
number of keys ranging from 95 103, also exist. Standard keyboards are the most basic keyboards, but they still have variations
in their key placement. QWERTY keyboards are the most commonly used keyboards. They are called QWERTY keyboards, because the six alphabets, Q, W, E, R, T, and Y, are in the first row.
Similarly, AZERTY, QWERTZ, and Dvorak keyboards are other
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tween the computer and the keyboard. Figure 2.5 shows a wireless
keyboard and a transceiver:
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MOUSE
34
left click
button
scroll
button
right click
button
As new technologies arrive, new types of the mouse have entered the
market. Some different types of the mouse are as follows:
(Source: 1. http://hexus.net/tech/tech-explained/peripherals/19231-the-different-typescomputer-mice/
2. http://german.alibaba.com/product-free/3d-mechanical-mouse-11209514.html)
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SCANNERS
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DIGITAL CAMERA
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(Source: http://www.ephotozine.com/article/olympus-sp-610uz-digital-camera-review-15939)
JOYSTICK
Joystick is an input device that is used to control objects in computer games. For example, The gaming parlours use these devices for
arcade games. With the help of joystick you can move an object in
a game such driving a car in a driving simulator game. Figure 2.12
shows a joystick:
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TOUCH SCREEN
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(Source: http://www.vardhamantechnology.com/touch.html)
LIGHT PEN
A light pen is a pointing device and used to give input to the computer.
It is shaped like a pen and connected to the computer. There is a light
sensitive element in the light pen which detects light from the screen
when placed against it. This allows the computer to identify the location of the pen on the screen. Figure 2.14 shows a lightpen:
2.2.2
PROCESSING DEVICES
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2.2.3
STORAGE DEVICES
39
RAM
ROM
Compact Disc
Hard Drive
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RAM is the primary memory of a computer system. It is a storage device that allows information to be stored and retrieved quickly from
a random location in the memory. For example, when we copy text
from a document, the text is stored for a short amount of time in the
RAM. Data is retrieved randomly in RAM and not sequentially, thus,
the computer accesses data faster as compared to data retrieval from
a hard disc. RAM is a volatile memory, because it needs electric power
to keep the data available. All the data stored in memory will be lost if
power is lost. Figure 2.17 shows RAM:
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Figure 2.18:ROM
(Source: http://www.ti.com/product/tms27pc512)
COMPACT DISCS
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Compact Discs (CDs) are storage devices and are read by a laser in
a CD-ROM drive. A CD-ROM drive is a CD player inside a computer
system. CDs are round in shape and can store up to 700 MBs (Mega
Bytes) of data. They can store any type of data. For example, audio file,
video file, or any other digital file. A CD is often used in organisations
to store business presentations.
Figure 2.19: CD
(Source: http://findicons.com/icon/3088/cd)
HARD DRIVE
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(Source: http://ixbtlabs.com/articles2/storage/itogi2005hdd.html)
2.2.4
OUTPUT DEVICES
42
Monitor
Printer
Projector
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(Source: http://www.houseofjapan.com/electronics/nec-display-solutions-expands-accusync-series-with-24-inch-lcd-desktop-monitor)
PRINTER
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S
PROJECTOR
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(Source: http://www.hitechreview.com/tv/projectors/casio-adds-four-new-models-to-its-greenslim-projectors-line/28878/)
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a. Processing
b. Input
c. Calculating
d. Output
ACTIVITY
With the help of the Internet, find out some popular types of printers that are used in business organisations.
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System Software: System software is designed to control and operate other computer programmes. The operating system is an example of system software, because it manages other software programmes. Other software applications, which are installed with
an operating system, also exist. These applications are sometimes
also called system software, because they are a part of the operating system. This kind of system software can be necessary for
other applications to function properly.
All system software are not used by users directly, some system
software run in the background. For example, when a user installs
a windows operating system, Internet Explorer (IE) is automatically installed with it. Although it is not necessary for a user to
use IE, because other Web browsers are available for free. Still,
numerous applications rely on the components of IE to function
properly.
Application Software: Application software is a software programme that is designed to perform specific tasks. Some examples of application software are Web browsers, word processors,
spreadsheets and other utility applications. Consider the example
of word processor. Organisations always need to create various
reports and legal documents for different purposes. They use the
word processor programme to create such documents, because it
provides various utilities such as different fonts, colours and layouts.
System software run in the background and enable other applications
to run. These system software consist of programmes such as assembler, compiler and file management system. Application software run
on the top of these system software. System software are installed automatically when a user installs an operating system, whereas in case
of application software, the user can decide which application to install.
2.3.1
OPERATING SYSTEMS
An operating system is a software programme that allows the computer hardware to communicate with the computer software. It also
controls and manages application software in a computer system. A
computer is useless without an operating system. The most commonly
NMIMS Global Access - School for Continuing Education
45
used operating systems used in an organisation are Microsoft Windows XP/7/8, Linux Ubuntu and Macintosh OSX.
When computers were first introduced, users interacted with computers through commands. Memorising all the difficult commands
was not easy, because sometimes users needed to perform a series of
commands. Today, every computer uses a GUI (Graphical User Interface) based operating system, which consists of buttons, menu bars,
textbox, etc., and is much simpler to operate. Figure 2.25 provides an
overview of the working of an operating system:
User 1
User 1
User 1
System
Software
Application
Software
Software
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Hardware
46
2.3.2
CPU
Operating System
RAM
I/O
(Source: http://www.tutorialspoint.com/operating_system/os_overview.htm)
PROGRAMMING LANGUAGES
N
EXHIBIT
C++
C++ is a programming language developed by Bjarne Stroustrup
in 1979 at Bell Labs. It is an advanced version of C language. C++
runs on a variety of platforms such as Windows, Mac OS, and the
various versions of UNIX.
2.3.3
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Java
Ready-made packages are ready to use. The user only needs to install
these programmes and they can start using it. Ready-made packages
comprise computer programmes, user guides, and other documentation sets. They provide inexpensive and quick solutions to numerous computer applications. A wide range of ready-made packages are
available in the market. Some examples of such packages are Microsoft Office, Libre Office, Kingsoft Office, etc.
Such applications are used on a large scale in a business organisation. These applications should be compatible with the users operating systems to function properly. The user should always check the
system requirements of the application package before purchasing it.
There are many software packages that are built for a specific operating system. For example, the Microsoft Office package only runs on
Windows operating systems.
Let us discuss some important applications that organisations need in
ready-made software packages:
Word Processor: Word processor is an application that allows users to perform almost all types of operations on text. It allows users
to create, edit, and format documents. It also allows users to add
pictures, graphs and tables in documents. One of the most popular
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47
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Microsoft Office
Breadbox Office
DOS
Neo Office
Mac OS X
Cross Platform
48
With the help of the Internet, list the application software and
ready-made packages used by most organisations.
2.4 SUMMARY
Information systems comprise many components, which are used
to input, process and output data in the form of information.
The main components of information systems are computer hardware, software, data, human resources and procedures.
Hardware can be described as the collection of physical components of a computer or the parts of a computer that can be physically touched.
Any hardware device that is used to enter data to a computer is
known as an input device.
In a computer, processing devices control the storage and retrieval
of information. The CPU (Central Processing Unit) is a processing
device found in computers.
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A peripheral device that receives or displays output from a computer is called an output device.
System software is designed to control and operate other computer programmes. The operating system is an example of system
software, because it manages other software programmes.
An operating system is a software programme that allows the computer hardware to communicate with the computer software.
KEY WORDS
Transceiver: A transceiver is a device that contains both transmitter and receiver. It transmits and receives analog or digital
signals.
Assembler: Assembler is a computer programme that translates other computer programmes from assembly language to
machine language.
Compiler: A compiler is a programme that translates a computer programme written in some high-level programming language (such as Java) into machine language.
Ergonomics: It is the study of methods that reduce stress on
muscles to avoid strain injury.
File Management System: It is the system used by an operating system or a programme to organise and keep track of files.
49
Software
Concepts
Q.No.
Answers
1.
Hardware, Software
2.
a.
3.
False
4.
Ergonomics
5.
6.
False
7.
spreadsheets
Processing
8.
False
9.
Microsoft Office
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NETWORKING CONCEPTS
CONTENTS
3.3
3.4
3.2.1
3.2.2
Introduction
Meaning of Networking
Need for Networking
Advantages and Disadvantages of Networking
Self Assessment Questions
Activity
Hardware and Software for Networking
Self Assessment Questions
Activity
Basic Components of a Network
Self Assessment Questions
Activity
Types of Networks
Local Area Network
Metropolitan Area Network
Wide Area Network
Bluetooth as Wireless Technologies
RFID
Self Assessment Questions
Activity
Characteristics of Networks
Self Assessment Questions
Activity
Network Models
Self Assessment Questions
Activity
Applying Communication Networks
Intranet
Extranet
Internet
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3.1
3.2
3.5
3.5.1
3.5.2
3.5.3
3.5.4
3.5.5
3.6
3.7
3.8
3.8.1
3.8.2
3.8.3
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3.9
3.10
3.11
3.11
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NETWORKING CONCEPTS
INTRODUCTORY CASELET
TACKLING NETWORK ISSUES AMONG VARIOUS
BRANCHES OF CADENCE BANK
Cadence Bank, with its headquarter in Birmingham, is a regional banking company serving consumer, commercial and business
customers in Alabama, Florida, Georgia, Mississippi, Tennessee
and Texas. With $5.7 billion in assets and nearly 1,500 employees
spread across more than 100 branch office locations, Cadence
has a large distribution network. It runs applications for banking,
mortgage, trust and other financial services.
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Thus, to overcome this problem, Cadence chose Visual Performance Manager (VPM) from Fluke Networks to provide network
and application solutions. Cadence saw the benefits of using VPM
within days, as it was able to identify some unexpected disk-todisk replication that was causing a network slowdown. In another
case, VPM helped to uncover storage backup traffic between three
branch offices that were also affecting network performance. The
backup was supposed to occur over night during non-business
hours, but was taking too long and running into the business day
hours where it was impacting users. After using VPM to find the
source of the slowdown, Cadence was able to apply some policies
to prevent this problem.
(Source: http://www.flukenetworks.com/content/case-study-visual-performance-manager-gives-regional-banking-and-financial-services)
53
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LEARNING OBJECTIVES
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3.1 INTRODUCTION
Networking is a widely and commonly used term be it human networking or networking of devices. Basically a human network is a
group of people, for instance, friends, colleagues or family. A human
network helps in exchange of information and ideas amongst them.
Human networks help in growth and evolution of people and help one
in becoming better human beings by bringing synergy.
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NETWORKING CONCEPTS
In an organisation computer networks play a significant role in achieving the objective of collecting, sharing and processing information at
good speed. An organisation with many of its branch offices located
at geographically diverse places can connect through computer networks. These networks enable the organisation to keep track of inventories, monitor productivity and maintain payroll.
Computer networks facilitate services such as e-mail, web search,
streaming of multimedia contents, online purchases, ATM machines
etc. Cellular telephone system is a part of everyone`s life nowadays.
Due to this growing integration of the communication network and
computer network into business and normal life, we can say that this
aspect of understanding the know-how of networking is not the prerogative of network administrators alone. We all, especially information systems, business and computer science students, need to understand the basic concepts of computer networks.
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Networking, or computer network, can be defined as A computer network is a group of computer systems and other computing hardware devices that are linked together through communication channels to facilitate communication and resource-sharing among a wide range of users.
Networks are commonly categorised based on their characteristics.
In simple terms, a computer network, also called network, is described
as two or more computers that are connected with one another for
the purpose of communicating data electronically. In other words, a
computer network is an interconnection of computers and computing
equipment using either wires or radio waves over small or large geographical areas. A wireless network makes use of radio waves.
Simplest network of interconnected two systems is depicted in Figure 3.1.
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3.2.1
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An organisation may feel the need to have networking due to following reasons:
Resource sharing: The main objective here is to make all the hardware equipment, like printer, and all the information, especially
data and program available to everyone who is on the network irrespective of physical location of resources and user.
High reliability: Copies of the data file can be kept at multiple
locations in a network. Thus, if there is a hardware failure at any
end of the network, other copies of the data file can be obtained
from any of these locations. This ensures that the data is not lost
due to hardware failure. The factor of reliability in networks is of
utmost importance in many areas like banking, military and air
traffic control.
Economic: Computer systems which are part of the network are
low in price and high in performance. Thus in a network, data is
kept in a centralised mainframe system and the rest of the sysNMIMS Global Access - School for Continuing Education
NETWORKING CONCEPTS
tems are personal computers which are cost effective. This model
of network is also called as client-server mode, where mainframe
system is the server and rest are clients.
Scalability: A network should be scalable i.e., it can be expanded
just by adding one more system to the centralised mainframe system without adversely affecting the performance of the entire network. Rather the network can be enhanced by adding new clients.
Powerful communication medium: A computer network proves
to be a powerful communication medium for employees who are
situated at physically far off distances. They can share mails and
data. If one of them makes any changes in a document another can
see it immediately. This quick sharing of important information
over long distances also improves the performance of the organisation as a whole.
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Now, let us consider some of the real life application of computer networks:
Banking transaction like fund transfers, FD, RD etc.
Taking out cash from an Automated Teller Machine(ATM).
E-mails i.e., sending and receiving mails electronically
Online ticket reservation for airlines, rail, hotels.
Data sharing with ease in offices.
We have seen some real life scenarios where computer networks increase the efficiency of an organisation. However, computer networks
have a flip side too. Let us discuss a few advantages and disadvantages
of networking in the following section.
3.2.2 ADVANTAGES AND DISADVANTAGES
OF NETWORKING
As we have seen in previous sections, computer network brings an
added advantage to an organisation. Some of the advantages of computer network are as follows:
Advantages of Networking
Information
storing
and sharing
Sharing of
files
Resource
Management
Services
Instant
Messaging
Security
Information storing and sharing: Information can be easily created and managed using computers. A computer network provides a
place to store the information as well as the essential mechanisms
57
and infrastructure to share that information with other users using the network.
Sharing of files: On a computer network, files can be stored on a
central computer (also called a file server). This enables the data
to be shared throughout an organisation. Backup of files can be
easily maintained when files are saved on a central file server rather than when they are scattered across a separate independent
computers.
Resource Management: For a network, software licenses are
cheaper than buying licenses for several standalone computers.
Network versions of software are known to have speedy installation on client computers than on the file server. Hardware devices
such as expensive laser printers or scanners can easily be shared
over the network. This sharing of expensive devices proves economical for the network.
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Disadvantages of Networking
Expensive
Installation
Regular
Maintenance
Server
Failure
Hardware
Failure
Security and
Compliance
NETWORKING CONCEPTS
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Hardware Failure: Establishing a network entails lots of hardware in terms of cables and other devices. A broken cable or a
breakdown of any device in the network can bring the entire network to a halt.
ACTIVITY
In a group, discuss a scenario where there is no network of computers in todays world and all computers are standalone. What will the
world look like? Present your findings in a short note.
3.3
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S
HARDWARE REQUIREMENTS FOR NETWORKING
Router
Workstations
Firewall
Bridge
Switch
File Servers
Repeater
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Network hardware consists of all the hardware required for establishing a smooth network connection between computers. Figure 3.5
shows a simple network with required hardwares for a network. The
network includes all computers, peripheral devices attached to computers, interface cards and the equipment that are needed to perform
communication and data processing within the network.
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NETWORKING CONCEPTS
Fastest processor(s)
Large amount of RAM
One or more large and fast hard drives
Extra expansion slots
Fast network interface card(s)
Network Interface Cards: The network interface card (NIC) is a
piece of hardware device that provides a physical connection between the network and the connected computers. NICs are present internally in computer hardware. NICs define the speed and
performance of a network. It is a good idea to use the fastest network card available for the type of computer you are using.
There are two very common network interface cards viz. Ethernet
cards and wireless adapters.
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(Source: http://fcit.usf.edu/network/chap3/chap3.htm)
Wireless Adapters: Wireless adapters are used in portable devices, such as laptops, smart phones, and tablet devices. External wireless adapters can be purchased and installed on most
computers having an open USB (Universal Serial Bus) port, or
unused expansion slot.
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62
Host A
Network
Host B
Gateway
Host C
NETWORKING CONCEPTS
Switch
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(Source: http://www.directsystems.com/support/switchvshub.php)
Network
Gateway
Bridge
Active Wall
Switch
LAN
63
Hub: A hub is a network device that is placed centrally and all the
computers are attached to it via cable. It is used to send data or signal sent by one of the computers to all the others connected with it.
Although the mechnism used here is very simple of receiving from
one and sending to all; it leads to a lot of unnecessary traffic being
sent to all devices on the network. It results in traffic congestion
and data collision in the network. A major disadvantage of hubs is
that they cannot identify the sender and receivers connected to it.
Thus, it sends the same data/signal to all the connected devices inclusive of sender. In addition, they are unable to send and receive
signals at the same time. Hubs have become obsolete now, though,
they are still used to reduce the networking cost.
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(Source: http://www.computer-networking-success.com/network-topologies.html#sthash.
LdGmuJM0.dpbs)
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Printer
Client
Client
Thinnet
Repeater
Thicknet
Client
Client
NETWORKING CONCEPTS
N
SOFTWARE REQUIREMENTS FOR NETWORKING
Software or in other words computer software is also known as a computer program. It is the non-tangible component of computers in contrast to computer hardware which is the physical component of computers. Computer hardware and software are complementary to each
other one cannot be used without the other. Some commonly used
softwares are Windows operating system, Microsoft Office etc.
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Some softwares are meant for single user computers like desktop, laptop which are standalone computers. Standalone computer are not
part of any networks, they work independently. There are other softwares which are meant specifically for a network like Network Operating Systems (NOS) which coordinates the activities of multiple computers across a network. NOS acts as a director to keep the network
running smoothly.
Both these types are very popular and contemporary networks are usually a combination of both these NOS. The networking design can be
considered independent of the servers and computers that will share it.
Peer-to-Peer: In Peer-to-peer network, as the name might suggest, all computers are at par with each other, they are considered
equal. NOS allows every computer which is a part of peer-to-peer
network to equally share resources and files located on their computers and to access shared resources found on other computers.
In this case, there is no centralised file server which manages
the entire system (Refer to Figure 3.14). Peer-to-peer networks
are suitable for small to medium local area networks where the
number of computers attached to the network is less. All modern
desktop operating systems, such as Macintosh OSX, Linux, and
Windows, can function as peer-to-peer network operating systems.
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File Server
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(Source: http://fcit.usf.edu/network/chap6/chap6.htm)
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NETWORKING CONCEPTS
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ACTIVITY
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There are four basic physical topologies that are common in network:
1. Mesh: In mesh topology all the components of a network are
connected to each other directly. Figure 3.16 depicts mesh
topology.
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NETWORKING CONCEPTS
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(Source: http://www.whatsupnew.com/network-topology/)
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Ring
(Source: http://www.mattytv.com/blog/networking/ring-topology/)
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Hub - Hub is a device that is placed centrally in a network connection. It acts like a distribution center. The basic function of a hub
is to take data from one device in the network and transmit it to
the entire network. Figure 3.20 shows a network in which the hub
is placed in the centre and all the other devices are attached to it.
70
NETWORKING CONCEPTS
few advanced features. Unlike Hub, it can deliver data to the right
destination or device by recognising its physical address. Like
Hub, switch doesnt broadcast the received message to the entire
network. In other words switch connects the source and destination directly which increases the speed of the network.
Network
DSL/Cable
Moderm
Switch
Router
Notebook C
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Computer A Computer B
Notebook E
Computer D
(Source: http://www.home-network-help.com/network-switch.html)
a. Mesh
b. Bus
c. Star
d. Ring
ACTIVITY
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LAN
72
WAN
Metropolitan-area
Network
MAN
LAN
LAN
3.5.1
Local Area Network (LAN) is a communication network that interconnects computer within a small geographical area like within a
building or small group of buildings. Thus, LAN is a small network
of computers attached to each other. It is considered to be the best
network for smaller organisations. By virtue of being a small network,
the data transfer speed is very high. An example of a LAN is shown in
Figure 3.23.
NETWORKING CONCEPTS
Network
CORPORATE
FIREWALL
CERTIFICATE
SERVER
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DHCP
SERVER
(Source: http://www.mysecurecyberspace.com/encyclopedia/index/local-area-network-lan.html)
3.5.2
Network
Firewall
MAN
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3.5.3
Workstation
Server
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WAN
Workstation
Server
Workstation
74
Server
3.5.4
Bluetooth technology is a wireless communication technology standard that is simple, secure and is prevalent. It is used for exchanging data over short distances. It uses short-wavelength ultra-high frequency radio waves from fixed and mobile devices for data transfer.
In recent time, Bluetooth technology has become so common that it
NETWORKING CONCEPTS
Headset
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DVD-player
Mobile
telephone
Projector
Scanner
Infowear
Notebook
Digital
Camera
Printer
Personal
Digital
Assistant
Disk Drive
Refrigerator
3.5.5
75
electromagnetic fields to transfer data and is employed for the purpose of automatically identifying and tracking tags attached to objects.
The tags store information electronically. Unlike a barcode, these tags
are not necessarily within line of sight of the reader, and may be embedded in the tracked object.
Functionally, a RFID device is similar to a bar code or a magnetic strip
on the back of a credit card or ATM card; it provides a unique identifier for that object. And, just as a bar code or magnetic strip, the
RFID device must be scanned to retrieve the identifying information.
A significant advantage of RFID devices is that unlike these devices
RFID does not need to be positioned precisely relative to its scanner.
In contrast, RFID devices can work within a few feet (up to 20 feet for
high-frequency devices) of the scanner. For instance, you could just
put all of your groceries or purchases in a bag, and set the bag on the
scanner. The scanner would be able to read all of the RFID devices
and total the purchase immediately.
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Reader or
Interrogator
Antenna
Tag or
Transponder
Computer
Using Internet find out about LAN, MAN and WAN and list their
characteristics.
NETWORKING CONCEPTS
25
30
5
6
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Availability =
Cost: Cost is the total expenditure incurred for setting up of a network and maintaining it on a regular basis.
Scalability: Scalability is the measure of how best a network accommodates an increase in number of users and increase in data
transmission in an existing structure. A scalable network is designed in such a way that allows easy future expansions to avoid
adverse effect on its existing performance. If it is not so then
high expenses will have to be incurred to transform an old network into a new one which can accommodate more users or transmits more data.
Security: Security is a major concern in networks. For a network
it defines the level of protections of a network from misuse, intrusion, etc. Maintaining security is of utmost concern for a network
to keep things in order and to avoid unwanted attacks otherwise
insecure networks might cost a lot in the long run.
Reliability: Reliability is the characteristic of a network that shows
the level to which a network can be depended upon. This characteristic is weighed against the dependability of the network components like switches, routers, hub etc. that are used in a network.
If any of these fail then the entire network might just shut down.
Topology: Topology can be of two types i.e. physical topology and
logical topology. Physical topology deals with the arrangement of
physical components in a network whereas logical topology deals
with the path that data signals take through the physical topology.
77
S
SELF ASSESSMENT QUESTIONS
ACTIVITY
The TCP/IP ModelThe TCP/IP model is also called the Department of Defense DoD model because it was designed for the
Department of Defense in United States. TCP/IP model is a collection of communications protocols and is used for the Internet.
Commonly it is referred as TCP/IP. TCP/IP provides end-to-end
connectivity between source and destination network. It specifies
how data should be formatted, addressed, transmitted, routed and
received at the destination. The TCP/IP model has been organised
into four layers which are used to sort all related protocols according to the scope of networking involved. There is an organisation
called the Internet Engineering Task Force (IETF) which is responsible for maintaining the TCP/IP model and related protocols.
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The layers of TCP/IP model from lowest layer to highest layer are:
The Link Layer: This layer contains communication technologies for a single network segment.
The Internet Layer: This layer connects hosts across independent networks, thus establishing internetworking.
The Transport Layer: This layer handles host-to-host communication.
The Application Layer: This layer provides process-to-process application data exchange.
NETWORKING CONCEPTS
TCP/IP
Application
Transport
Internet
Network Interface
(Source: http://ayurveda.hubpages.com/hub/OSI-model-and-TCPIP-model)
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Application Process I
Data
Application Process n
7: Application Layer
Data
7: Application Layer
6: Presentation Layer
Data
6: Presentation Layer
5: Session Layer
Data
5: Session Layer
Data
4: Transport Layer
3: Network Layer
Data
3: Network Layer
2: Datalink Layer
Data
2: Datalink Layer
1: Physical Layer
Data
1: Physical Layer
4: Transport Layer
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Data Transmission
System 1
System 2
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(Source: http://edugeeks.in/osi-model-computer-awareness-material-for-bank-exams/)
ACTIVITY
List the differences between both TCP/IP and OSI network models.
You can utilise Internet for any assistance.
NETWORKING CONCEPTS
3.8
APPLYING COMMUNICATION
NETWORKS
3.8.1
INTRANET
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In Intranet, multiple PCs are networked to be connected to each other. Computers in intranet are not accessible to the world outside of
the intranet. Usually every organisation has its own Intranet network
and members/employees of that company can access the computers
in their intranet.
81
3.8.2
EXTRANET
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(Source: http://computerlearnhow.com/the-difference-between-internet-and-intranet/)
3.8.3
INTERNET
NETWORKING CONCEPTS
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(Source: http://www.tutorialspoint.com/computer_fundamentals/computer_internet_intranet.
htm)
ACTIVITY
3.9 SUMMARY
Networking, or a computer network, is described as two or more
computers that are connected with one another for the purpose of
communicating data electronically.
In a computer network, computers are connected together in order
to share hardware resources (such as printers and CDs), software
resources (exchange data and files), and allow electronic communications amongst each other.
A computer network design consists of basically two parts viz.
hardware and software.
83
Networking hardware includes gateways, routers, network bridges, switches, hubs, and repeaters. Wireless networking is used for
portable and handheld devices.
The Network Operating System (NOS) are be of two major types::
Peer-to-Peer
Client/Server
Printers, file servers are hardware devices that are attached to a
network and shared by all the computers in a network. Shared
data is also one of the most important components of the network.
There are four basic physical topologies that are common in network: star, mesh, bus and ring.
There are following five types of networks:
LAN (Local Area Network)
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Bluetooth
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OSI
NETWORKING CONCEPTS
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Q.No.
Answers
Meaning of Networking
1.
True
2.
Peer-to-peer
3.
Ring
Types of Networks
4.
False
Characteristics of Networks
5.
Network Models
6.
c, physical layer
Applying
Networks
7.
intranet, internet
8.
False
Communication
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3.12 REFERENCES
SUGGESTED READINGS
86
E-REFERENCES
encyclopedia britannica, (2013). bluetooth (technology). [online]
available at: http://www.britannica.com/ebchecked/topic/1191284/
bluetooth
encyclopedia britannica, (2013). computer network. [online] available at: http://www.britannica.com/ebchecked/topic/130637/computer-network
Encyclopedia Britannica, (2012). wide area network (WAN) (computer science). [online] Available at: http://www.britannica.com/
EBchecked/topic/643173/wide-area-network-WAN
Encyclopedia Britannica, (2013). computer :: Local area networks.
[online] Available at: http://www.britannica.com/EBchecked/topic/130429/computer/235918/Local-area-networks
DATABASE MANAGEMENT
CONTENTS
Introduction
Meaning of Database
Self Assessment Questions
Activity
Types of Databases
Self Assessment Questions
Activity
Database Management
Objectives of Database Management
Functions of Database Management
Major Components of Database Management
Self Assessment Questions
Activity
Database Models
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
4.3
4.4
4.4.1
4.4.2
4.4.3
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4.1
4.2
4.5
4.6
4.7
4.8
4.9
INTRODUCTORY CASELET
Physicians and their office staff have stated that they spent more
time looking for patient information than the patient. Another
major consideration is the physical safety of the data being stored.
Threats exist externally in the form of natural disasters. Also, the
security involved in patients privacy is another issue.
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A study on hospital patient database management system was designed to transform the manual way of searching, sorting, keeping, and accessing patient medical information (files) into Electronic Medical Records (EMR) to solve the problems associated
with the manual method.
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DATABASE MANAGEMENT
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4.1 INTRODUCTION
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For an organisation, private or public, whether it is a banking transaction or a rail/air ticket booking application, database plays an important. Till a few years back, databases were managed in a traditional format, where data was usually stored in textual or numeric form. Now,
we can store audio, video, and pictures in databases. These databases
are generally referred to as multimedia databases. In addition, we can
even store maps, weather data, and satellite information in what is
called Geographical Information Systems (GISs), which is a combination of cartography, statistical analysis, and database technology.
This chapter starts by introducing the concept of a database and its
usage in an organisation. Next, it discusses the types of databases.
Thereafter, the chapter explains the various functions and objectives
of database management. Further, it discusses the major components
of database management. Towards the end, various database models
have been discussed in the chapter.
Data, in the simplest term, is a collection of raw facts and figures. The
term data originates from the plural of a Latin word datum, which
means something given. It is the key ingredient for any database system. In fact, data is necessary for a database system to produce any
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Text
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Pre-specified
Information
Graphics
Types of
Data
Video
Audio
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View Level
View 1, View 2, ............., View n
Logical Level
Physical Level
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For example, ABC University has a huge database of colleges affiliated to it, including undergraduate colleges. The data related to all the
colleges and students enrolled in the university is stored centrally at
one location in the university server. All the data in the database is
organised in such a way that the contents can be accessed, managed,
and updated for smooth functioning of the university. This centralised
storage of data is referred as the physical view of data.
From the database, we can track all the undergraduate colleges that
conduct examination under this university, the departments in each
college, the students enrolled in each college, etc. The different conclusions drawn from the same database refer to the logical view of
data.
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INFORMATION
Processed and interpreted data is called information, i.e., data has been
evaluated and worked upon, and some conclusions have been drawn
from it. Information is created when data is organised into charts,
summaries, averages, and ranked lists, which help an organisation
to make decisions. Decisions based on this acquired information are
referred to as informed decisions. Information is organised, structured, and derived by processing data collected from various sources.
Information has a specific meaning in context with from where the
data has been derived. Collection of information contributes to knowledge. Information can be directly used for decision making in an organisation, for example, the pattern of business transactions in a day.
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Information for one purpose can be used as data for another purpose. For example, when you purchase something from a departmental store, a number of data items are put together, such as name of
items purchased, number of items purchased, price, tax, and the total amount paid. Separately, these are all data items, but collectively,
these items represent information about a business transaction from
an organisational point of view.
Now, after studying the basic terms of database management, let us
discuss database in the following section.
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(Source: http://www.riceconsultingllc.com/database-building.php)
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Distributed
Database
Type of
Databases
Temporal
Database
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Semantic
Database
Object
-oriented
Database
Mobile
Database
Deductive
Database
Multimedia
Database
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Distributed Database
Manufacturing
Headquarters
HQ.ACME.COM
MFG.ACME.COM
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SALES.ACME.COM
Sales
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(Source: http://docs.oracle.com/cd/B19306_01/server.102/b14231/ds_concepts.htm)
DATABASE MANAGEMENT
of all the necessary objects that are created during the execution of
a programme. Figure 4.6 show an object-oriented database:
Author
OODB Structure
Author
Author
Discussion
Users/
Groups
topLevelFolder
Author
Link
Host
Author
Author
Folder
Node
Author
Site
Author
Chat
(deprecated)
custom
Node-based
Objects
Multiple
attachments
Author
Massage
Author
Massage
Author
Multiple
attachments
Multiple
attachments
Massage
Multiple
attachments
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(Source: http://webxrox.blogspot.in/2011/04/why-oodb-object-oriented-database-is.html)
The main aim of an object-oriented database is to reduce the overhead of converting information representation in the database to
an application-specific representation. Unlike a traditional database, an object model allows for data persistence and storage by
storing objects in the databases. The relationships between various objects are inherent in the structure of the objects. This is
mainly used for complex data structures, for example, 2D and 3D
graphics, which must otherwise be flattened before storage in a
relational database.
Temporal Database: Temporal databases are used in an area
where timing is an important factor. It deals with the time factor
while storing data in a database. For example, while managing database for a hospital management system, a patients data is recorded. Time is an important field in this case, because it defines
the duration for which the patient has been served. Thus, a database developer can convert a simple database to a temporal database by implementing the time field.
Temporal databases can be developed depending on two timing
constraints:
Valid Time: It describes the time duration for which a fact is
true.
Transaction Time: It defines the time when the fact currently
exists in the database.
A temporal database can be a valid time database, where each table contains a field, valid time, which stores the duration of the
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data valid in a certain context. In these databases, time field appears as a three-dimension axis. Tables can also be categorised
into:
Event Table: Event table contains the instant timestamp of an
event.
State Table: State table contains the state of the data. State
table also contains the duration of the data for which the data
is valid.
Multimedia Database: Multimedia database has the ability to
store multimedia data, which represents any data other than alphanumeric data. Multimedia data comprises media data such as
image file, text file, video file, audio file, etc.
A multimedia database generally stores two types of multimedia
data:
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Semantic Database: Semantic databases represent an object-oriented database model that stores the information in a natural way
and has an information-handling system that is used for the management of information. It is a type of knowledge database that
stores the meaning of information in the form of an object. In this
database, each element is related with every other element, depending on the meaning of the users information. It captures the
meaning of the users information and provides a high-level description of that information.
The benefit of using a semantic database is that it offers information about data, which is called metadata. Metadata of data can be
beneficial to an organisation. In this database, each data is related
to every other data, thus, any complex business-related data can
be fetched easily. This database has some extra features, such as
business calculation capability, that allow users to generate a report for an organisation easily.
A semantic database supports different types of objects such as
concrete objects and abstract objects. A concrete object represents
a string or characters, whereas an abstract object is tangible in nature and holds the tangible item or organisational events.
Mobile Database: Mobile databases incorporate data from various
mobile devices connected through the Internet or wireless net in a
centralised server. Thus, if the user wants data from different wireless or connected servers in the Internet, he/she can have a mobile
database that stores data from these network components, so that
this data can be accessed offline.
It is similar to a distributed database system, where the centralised
servers are updated on the basis of two processes, namely, the replication process and the synchronised process. Similarly, in mobile
databases too, data from various mobile devices is replicated on
the centralised servers. On the other hand, the synchronised process matches both the centralised servers and mobile devices to
manipulate the data at every side, so that all of them can update
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c. Temporal database
d. Temperate database
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electronic database management systems. However, the manual system had various shortcomings. To begin with, all the data and records
were entered manually in the system, which was error prone and led
to lots of human errors. Secondly, multiple copies of the same data had
to be maintained related to different departments of an organisation,
which led to redundancy of data. Redundancy of data makes it error
prone, because in case of updation, the data might get updated in one
place and might get overlooked at the other, leading to discrepancies
in the system. Thirdly, searching for a particular data manually in the
registers proved to be a time-consuming process.
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Physical independence
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Logical independence
Ease of use
Speed of access
Centralised administration
Limiting redundancy
Integrity verification
Data sharing
Data security
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Centralised Administration: This refers to the database administration handled by a database administrator centrally. DBMS enables users to retrieve, add, and update data; and verify its integrity
in a centralised manner. The data is stored and managed centrally,
thus, all the users have access to the same data, and there is no
discrepancy in the data used by different users.
Limiting Redundancy: This refers to reducing the redundancies
of data in a database. Data is stored centrally, thus, it ensures minimising errors on any updations and also prevents wastage of
memory. The DBMS has this inherent feature to be able to avoid
redundant information whenever possible.
DBMS involves various functions that are vital for successful database
management. Based on the functions incorporated in a DBMS, the
selection of a DBMS is made. There are various DBMSs provided by
different vendors in the market such as Oracle, Sybase, and Microsoft.
A choice is made on the basis of the functions provided by each.
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DBMS has some standard functions, which are shown in Figure 4.8:
Retrieve and
Update Data
Support
Concurrent
Updates
Recovery of
Data
Data
Security
Data
Integrity
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Support Concurrent Updates: DBMS supports concurrent updates, so that important data is not lost or inaccurate. It is important when a data is stored at multiple places. If that data is updated at one place then its copy elsewhere in the database needs to
be updated too. Also, if multiple users are updating the database
simultaneously, then these updates must occur simultaneously.
There are various features of DBMS, such as locking, two-phase
locking, and time stamping methods, which are used by DBMS to
support these concurrent updates and ensure that the updates are
done accurately. The DBMS is responsible for proper storage of
updates.
Recovery of Data: It refers to one of the most important security-related functions of DBMS. In case of a system failure, i.e., a
computer crash, a fire, or natural calamity, DBMS is able to re-
DATABASE MANAGEMENT
cover the database, so that the data is not lost. System crash may
also occur if a user might enter incorrect information, invalidating
or making records inconsistent. In this scenario, if a database is
destroyed or damaged in any way, the DBMS must be able to recover the previous correct state of the database, and this process
is called recovery. The easiest way to achieve this is to take regular
backups of data. These regular backups can be scheduled for a set
time, so that in the case of a disaster, the database can be restored
to a previous stable state.
However, any data or changes made after the last backup would be
lost, which can prove to be problematic. To counter this problem,
DBMS has a feature called Journaling. Journaling involves keeping a log of all the updates made to the database. It is maintained
in a file separate from the database and can be used to re-update
the database up to the last update after it is recovered from the
backup.
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Data Security: Providing security to the database is a very significant feature of DBMS. It ensures that no unauthorised users are
allowed to access the database without proper permission. DBMS
uses features, such as encryption, authentication, authorisation,
and views, to provide security to the database. An unauthorised
person is not given permission to access any data from the database.
There are several components of DBMS that enable it to work smoothly. The main components of DBMS are depicted in Figure 4.9:
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COMPONENTS OF DBMS
DBMS Engine
Data Definition
Subsystem
Data
Manipulation
Subsystem
Application
Generation
Subsystem
Data
Administration
Subsystem
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SELF ASSESSMENT QUESTIONS
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Discuss the pros and cons of any four DBMS, such as Oracle, MS
Access, etc., with respect to their objectives and functions.
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Hierarchical
Model
DATABASE
MODELS
Relational
Model
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Network
Model
Each of these database models structure data differently. Let us briefly explore these database models in the following section:
HIERARCHICAL MODEL
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Company
Users
Marketing
Machines
Devices
Applications
Personnel
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AuthorID
345-28-2938
392-48-9965
454-22-4012
663-59-1254
PubAddress
123 4th Street, New York
45 Lincoln Blvd, Chicago
77 Boston Ave, Cambridge
99 Market, San Francisco
AuthorID
AuthorName
AuthorBDay
345-28-2938
392-48-9965
454-22-4012
663-59-1254
Haile Selassie
Joe Blow
Sally Hommings
Hannah Arendi
14-Aug-92
14-Mar-15
12-Sept-70
12-Mar-06
PubID
03-4472822
04-7733903
03-4859223
03-3920886
Date
1990
1965
1952
1967
ISBN
1-34532-482-1
1-38582-995-1
2-35921-499-4
1-38278-293-4
Publisher
Random House
Wiley and Sons
OReilly Press
City Lights Books
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Title
Cold Fusion for Dummies
Macrame and Straw Tying
Fluid Dynamics of Aquaducts
Beads, Baskets & Revolution
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The network model is a database model that is considered as a flexible way of representing data and their relationships. A distinguishing
feature of this model is that while in a hierarchical database model,
data is represented as a tree of records with each record having one
parent record and many children, the network model allows each record to have multiple parent and child records. The network model, in
comparison to the hierarchic model, allows a more natural modeling
of relationships between entities. Figure 4.13 shows a network model:
Store
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Order
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Manager
Salesman
Items
In a group, discuss the various features of the three database models and list their differences and similarities.
NMIMS Global Access - School for Continuing Education
DATABASE MANAGEMENT
4.6 SUMMARY
Database refers to the organised collection of data in a logical and
integrated manner.
Data, in the simplest term, is a collection of raw facts and figures.
Processed and interpreted data is called information.
Different types of databases are used to store organisational data,
depending on different components such as type of data to be
stored, organisational environment, and cost of implementation.
DBMS refers to a collection of software and hardware systems that
help in maintaining, managing, and querying data stored in a database.
In DBMS, data is recorded and maintained electronically in a database, and the features of DBMS make data maintenance tasks
easy to handle.
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Meaning of Database
Types of Databases
Database Management
Database Models
Q.No.
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Answers
1.
False
2.
Information
3.
d. (Temperate database)
4.
valid, transaction
5.
True
6.
False
7.
a.
8.
Journaling
9.
Relations
10.
True
(Data Integrity)
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E-REFERENCES
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Encyclopedia Britannica, (2013). computer network. [online] Available at: http://www.britannica.com/EBchecked/topic/130637/computer-network [Accessed 16 Jun. 2014].
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5.3
5.3.1
5.3.2
5.3.3
5.4
5.4.1
5.4.2
5.4.3
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5.1
5.2
5.5
5.6
5.6.1
5.6.2
5.6.3
5.6.4
5.6.5
5.7
5.8
5.9
5.10
INTRODUCTORY CASELET
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The Morgan Stanley Corps. outsourced a small part of its transaction-processing activities to Outsource2india (O2I), a leading
provider of outsourced business processing services dedicated
to quick, accurate, and quality data processing solutions, across
multiple industrial segments.
Trained personnel of O2I with advanced knowledge of logistics
management, client-specific requirements, and a stringent quality assurance policy at every stage of the process ensured the accrual of immediate and tangible benefits to the client's business.
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The gains from outsourcing a part of the company's transaction-processing activities to O2I resulted in the following successes:
Improvement of Turnaround Time: A fully-automated system, which tracks specific BOL requirements, and a trained
team of data processors ensured that all BOLs are processed
on the same day as they are received, within an average processing time of 12 hours or less.
Significant Reduction in Error Rates: When O2I took over
transaction processing on behalf of the client company, BOL
errors were in excess of double digits. Within 3 months of
O2I handling the process, error rates were reduced to fewer
than 10% of the total processed transactions. At present, error
rates stand at 3% or less, given the process refinements, quality-control checks, and system automation.
INTRODUCTORY CASELET
Reduction in Operational Losses and Revenue Leakage: The
timely and accurate processing of BOLs have resulted in the
client saving substantial costs on non-delivery, wrong or delayed delivery of freight, deterioration of service levels, and
revenue losses due to incomplete or inaccurate documentation.
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(Source: http://www.outsource2india.com/logistics/case-studies/transaction-processing-services.asp)
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S
LEARNING OBJECTIVES
>
>
>
>
>
5.1 INTRODUCTION
A system which assembles, stores, processes, and delivers information relevant to an organisation (or to a society), in such a way that
the information is accessible and useful to those who wish to use it,
including managers, staff, clients and citizens.
Buckingham et al (1987)
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An information system, with respect to an organisation, can be defined as a set of correlated components that collect (or retrieve), process, store and distribute information to support decision making and
control in an organisation. Thus, an information system basically controls the flow and maintenance of information in an organisation. It
contains information about people, places and things within the organisation and also in the environment surroundings. It identifies unseen patterns of data, a valuable resource, to explore information that
is necessary for effective decision making in the organisation. With
the help of this information, an organisation keeps updating itself to
remain competitive and prepare its growth path.
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Over forty years ago, the business arena of the US was undergoing
post-war growth with industrial revolution. The experience to grow
the economy came from that of producing war machines during World
War ll. Operations Research (OR) was the new field that developed out
of this push to win the war. In the after math of war, highly-experienced
workforces involved in OR were released from government work,
thus unleashing an experienced and highly-skilled field into business
and industry. This propelled the US towards an era of prosperity and
growth, which lasted over twenty-years. This era also saw the birth of
the first practical computers or Turing Machines, which were used for
cracking German codes and giving allied forces advanced warning of
enemy movements. By today's standards, these first computers were
not practical, cost half a million dollars, and were far less powerful
than a pocket calculator of today. However, these first computers gave
operations researchers the stimulus to begin the simulation of larger
and more complicated systems. These helped to enhance the use of
capital expenditures into profitable ventures in business and industry.
This background from the early days of simulation, OR, and new technologies gave birth to the areas of what is today known as Information
Systems.
This chapter starts by discussing different types of information systems. Further, it explains Operations Support Systems (OSS). Further
ahead, it explains Management Support Systems (MSS). In addition,
it explains functional support systems. The chapter concludes by explaining some other important types of information systems.
DIFFERENT TYPES OF
INFORMATION SYSTEMS
5.2
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Figure 5.1 shows the types of information systems and their categories:
Executive
Information
System
Management
Reporting
Systems
Decision
Support
Systems
MANAGEMENT SUPPORT
Business
Intelligence
Systems
Office
Information
Systems
Knowledge
Management
Systems
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Transaction
Processing
Systems
OPERATIONAL SUPPORT
Figure 5.1 shows different information systems, which lie in different categories. The Transaction Processing System (TPS) comes under the operational support category. Business Intelligence, Office
Information System, and Knowledge Management Systems (KMS)
fall under the category of knowledge support. The management support category contains Executive Support System, MSS, and Decision
Support System (DSS).
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There are two types of data processing, which are discussed as follows:
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Batch processing is used when a time delay does not affect or decrease the usefulness of the results. This approach is used for making pay cheques and other forms of paper output. Batch processing
is performed by large organisations using a mainframe or mid-range
computer. It includes a large batch of an identical data type, such as
payroll or stock information.
For example, a payroll application gathers data for each employee.
This data consists of the hours worked and overtime earned by the
employee. This data is processed in batches by updating a payroll
master file. After the master file is updated, the pay slips are generated for all employees in the organisation. Batch programmes are often
run at night, when the demand for the information system is lesser.
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To General Ledger
Employee Data
Employee/File
Database
Payroll
System
Employee Number
Name
Address
Pay rate
Gross pay
Federal tax
FICA
Medicate
State tax
Net pay
Earnings (YTD)
Management
reports
To government agencies
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Employee paychecks
Online
queries
(Source: http://nofieiman.com/wp-content/lectures/MIS2.pdf)
5.3.2
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A Process Control System (PCS) monitors and controls physical processes in an organisation. It manages manufacturing environment
and electronically controls the process based on restrictions defined
by the user. In a typical PCS, a measuring device is used to detect
gas or liquid present in a manufacturing environment. The frequency
signature of the specific gas or liquid is sent to the receiver, where it
is converted to a digital signal and then identified by the processor.
This identification is used for system tasks by the host controller and
automation system.
For example, underground mining plants use such systems. These
systems have electronic sensors that can monitor the pressure and
send warnings automatically, if the pressure is near the danger level.
It can also locate water sources in a particular range in a mining field.
Signal
Controller
Set
Point
Burners
Gas Supply
Automatic Gas Control Valve
OP16-997
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(Source: http://ot-group.help-out.net/t229-examples-of-process-control)
Figure 5.3 shows a simple automatic controller system which has the
following components:
The temperature transmitter (T.T) determines the temperature of
the hot water and changes it to a standard level.
Enterprise Collaboration System (ECS) can be defined as an information system that is used to enable well-organised sharing of documents and knowledge between business teams and individuals in an
enterprise. ECS tools consist of the Internet, groupware, and different
software/hardware and internal/external networks. An ECS works
best in a collaborative working environment.
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ECS Tools
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Electronic
Communications
Tools
e-Mail
Instant Messaging
Voice Mail
Faxing
Web Publishing
Paging
Enterprise
Collaboration
Systems
Electronic
Conferencing
Tools
Data Conferencing
Voice Conferencing
Videoconferencing
Discussion Forums
Chat Systems
Electronic Meeting
Systems
Collaborative
Work
Management
Tools
Calendaring and
Scheduling
Task and Project
Management
Workflow Systems
Document Sharing
Knowledge Management
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With the help of the Internet, study at least two types information
systems and discuss them with your friends.
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Management
(Planning, Organising,
Directing, Controlling)
Management
Information System
The data is collected from various internal and external sources and
then processed using technical and analytical measures. This pro-
Order
file
Production
master
file
Accounting
files
Order
processing
system
Materials
resource
planning
system
General
ledger
system
Managers
MIS
Reports
Online Displays
and Dashboards
Expense
data
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(Source: http://nofieiman.com/wp-content/lectures/MIS2.pdf)
Increased Complexity of Business: With rapid changes in technologies, business environment also underwent a change, which
increased the complexity of functions to be performed by every
department and overall organisation.
Increased Competition: The level of competition increased with
the changing business environment. Thus, it is now a challenge
to not only be a profitable business but also to remain successful.
Increased Complexity and Burden on Management: The decision-making managerial functions have become more complex
and need better analytical approach and expertise.
Information Technology: The emergence of electronic business
requires an organisation to be updated with IT revolutions. MIS
utilises this technological change for the growth of an organisation, being able to perform with less effort yet derive more efficient
information.
MIS serves the information needs of managers to make various management decisions. The various functions of MIS are discussed as follows:
Collecting Data from Various Sources: It refers to gathering data
from various internal as well as external sources. Internal sources
are financial reports, sales records, etc. External sources are sup-
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5.4.2
The values, ideas, and interests of the participants who are knowledgeable about the problem should be respected in the collaborative process.
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PC
Port distance
restrictions file
Analytical
models
database
Fuel consumption
cost file
Outline
queries
Port
expense file
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Figure 5.7 is an example of a shipment organisation that is using decision support system.
TYPES OF DECISIONS
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Semi-structured/Managerial Decision: This refers to the decisions taken by managers at the control level of business. The decisions at this level are neither structured nor unstructured, because these can be pre-specified to the extent their nature allows.
Decision making at this level is said to be semi structured, because
problems and solutions are clear, and expertise is also required
in taking semi structured decisions. Managers at this level focus
on monitoring and controlling activities of operational level and
providing information to the business level management. For example, introduction of a new feature in an existing product.
Structured/Operational Decision: This refers to decisions that
are usually taken at the operational level, where routine day to
day business process occurs. The decisions taken at this level are
based on certain rules and predefined procedures, which are specified in advance before taking the decisions. Thus, decisions taken
at this level are not only highly structured but also repetitive and
are related to day-to-day activities. To meet the requirements of
decision makers at this level, information systems are designed to
improve the efficiency of the business processes. For example, determination of quantity of raw material.
5.4.3
An Executive Information System (EIS) is a type of MIS that facilitates and supports information and decision-making needs at the senior executive level. EIS provides easy access to internal and external
information relevant to organisational goals. It is commonly considered a specialised form of DSS. The emphasis of EIS is on graphical
displays and easy-to-use user interfaces. It offers strong reporting and
drill-down capabilities. In general, EIS is an enterprise-wide DSS that
helps top-level executives analyse, compare, and highlight trends in
important variables, so that they can monitor performance and identify opportunities and problems.
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EIS is not a piece of hardware or software. It is basically an infrastructure from where operational data and up-to-the-minute details are
supplied to a firm's executives. The operational data is first gathered
and sifted from various databases and then transferred to an executive level. The information mix presented to executives typically includes financial information, work in process, inventory figures, sales
figures, market trends, industry statistics, and market price of the
firm's shares. This information may even include suggestions related
to what needs to be done. EIS differs from a DSS in that it is targeted
at executives and not managers.
Previously, EIS was developed as computer-based programmes on
mainframe computers to provide a companys description, sales performance, and/or market research data for senior executives. However, earlier, senior executives were not computer literate and were not
skilled in handling computer-based information. Moreover, EIS data
earlier supported only executive-level decisions and not necessarily
the entire company or enterprise.
Current EIS data is available taking into consideration the entire organisation. Further, it is facilitated by personal computers and workstations on LANs. Executives and employees are now more computer
literate and have been trained since to handle such kind of information. Thus, employees can access company data to help decision making in their individual workplaces, departments, divisions, etc. This
allows employees to provide their inputs and ideas both above and
below their company level.
EIS has a few advantages and disadvantages, which are discussed as
follows:
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Advantages of EIS:
It is easy for upper-level executives to use; no extensive computer
experience is required in operations.
It provides timely delivery of company summary information, so
that management can make decisions promptly.
Information that is provided is better understood.
It improves tracking information.
It Offers efficiency to decision makers.
Disadvantages of EIS:
It is system dependent.
It has limited functionality, by design.
It causes information overload for some managers.
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Example of EIS:
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5.6
EXPERT SYSTEM
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Along with simple production rules, human experts also usually employ heuristic rules, or rules of thumb. For example, a credit manager might know an applicant with a poor credit history, but a clean
record since acquiring a new job, might actually be a good credit risk.
Expert systems try to incorporate such heuristic rules. They must be
open for changes and must have the ability to learn from experience.
In spite of their being experts in their domain, expert systems still remain supplements rather than replacements for human experts.
5.6.2
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Acquisition of knowledge is the very first step in knowledge management. The process of acquiring knowledge is called knowledge
engineering, and people involved in this task are called knowledge
engineers. The flow of knowledge in an organisation can be in two
directions: top to bottom and bottom to top. There are two different
approaches adopted by knowledge engineers while acquiring knowledge in these two directions.
The methods followed in knowledge acquisition from top level to bottom are as follows:
Interview Method: It involves general interviews, personal interviews, object-oriented interviews and structured interviews.
Questionnaire Method: It involves open and closed-ended questions to be answered.
Group Discussion Method: It involves a knowledge-sharing discussion on some topic; the ideas and thoughts of participants help
in knowledge creation.
The methods followed in knowledge acquisition from bottom to the
top level are as follows:
Observation Method: It involves observation of process and employee performance in the process.
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Strategic systems are designed to give competitive advantage to an organisation. Strategic systems are information systems that have been
developed in response to corporate business initiatives. Following
business perspective, strategically, these systems may deliver a product or service that is:
Costs lower than others
Can be differentiated from others
Focuses on a particular market segment
Shows innovation, to gain competitive edge
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Focus on a Specific Market Segment: Here, the idea is to identify and create something new in the market space that has not
been captured yet. IT is able to provide the capabilities to define, expand, and fill particular market segments.
Innovation: Innovation deals with developing new and appreciably different products or services through the use of IT, for
example, automatic credit card handling machines at service
stations and Automatic Teller Machines (ATMs) at banks etc.
These innovative techniques not only attract customers but also
open up entirely new fields of business.
BUSINESS INFORMATION SYSTEM
5.6.4
Business Information System can be defined as a group of interrelated components that works collectively to carry out input, process,
output, storage and control actions to convert data into information
products. These products can then be used to support forecasting,
planning, controlling, coordinating and helping in decision making
and operational activities in an organisation.
In terms of components that are required to undertake this activity,
there are five basic resources: people, hardware, software, communication and data. The people resource includes users and developers
of information systems and also those who help in maintenance and
operating the system such as information system managers and technical staff.
The hardware resource includes computer systems and other peripheral devices such as printers, scanners, etc. Software resources refer
to software programmes and associated manuals. Communication resources include computer networks and the hardware and software
required to support it. A data resource refers to the data an organisation has access to such as databases and files.
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BIS can be divided into two categories of systems that support an organisations everyday business activities. These systems also lend support in managerial the decision-making process. The two categories of
BIS are:
Operations Information System (OIS): These systems are concerned with process control, transaction processing and communications.
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This division of BIS has been useful for managers using BIS. However, with progress in inter-organisational e-commerce and Electronic Data Exchange (EDI), now this demarcation does not accurately
reflect the system being used within an organisation. For example,
e-business and enterprise planning systems cut across both operational and management systems to provide businesses with more integrated information systems.
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In many organisations, a system grows gradually, adding new equipment or software as and when the need arises. This often leads to a
confused mix of incompatible and inefficient systems.
Sometimes, different departments, such as marketing and finance,
each enter the same or related data into a system separately. This results in duplication of efforts as well as data. This also leads to wastage of storage space. Although separate data might hold information,
summarising and bringing it together to get the whole picture can be
NMIMS Global Access - School for Continuing Education
The system should be studied thoroughly by system administrators and should take into consideration customer and supplier
requirements for system expansion. These must be pre-judged to
adjust any changes needed for expansion in the future.
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Example
Infosys TalentEdge Learning Management solution , IBM Tivoli Decision Support System
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c. Questionnaire Method
b. Protocol Method
d. Expert Opinion
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ACTIVITY
With the help of the Internet, study other information systems and
their areas of implementation with respect to a business enterprise.
Discuss with your friends.
5.7 SUMMARY
An information system is a group of hardware, software, data, people and procedures, which is designed to produce information that
helps the regular, small and large activities of users in an organisation.
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A PCS monitors and controls physical processes in an organisation, manages manufacturing environment and electronically controls the process based on restrictions defined by the user.
An ECS can be defined as an information system that is used to enable well-organised sharing of documents and knowledge between
business teams and individuals in an enterprise.
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Real-time Transaction Processing: Real-time transaction processing is the instant processing of data.
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Different Types of
Information Systems
1.
False
2.
MIS
3.
d. None of these
4.
True
5.
6.
software/hardware, internal/external
7.
True
8.
True
9.
Organising, controlling
10.
11.
12.
Financial
13.
False
14.
True
15.
Knowledge
16.
17.
False
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Systems
Other Types of
Information Systems
Answers
Topic
147
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SUGGESTED READINGS
Sarngadharan, M. and Minimol, M. (2010). Management information system. 1st ed. Mumbai [India]: Himalaya Pub. House.
Stair, R. and Reynolds, G. (2006). Fundamentals of information systems. 1st ed. Boston: Thomson/Course Technology.
E-REFERENCES
Encyclopedia Britannica, (2014). information system. [online]
Available at: http://www.britannica.com/EBchecked/topic/287895/
information-system
Chris-kimble.com, (2014). Different Types of Information System
and the Pyramid Model. [online] Available at: http://www.chris-kimble.com/Courses/World_Med_MBA/Types-of-Information-System.
html.
6.2
Defining ERP
6.3
6.5
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6.1
6.7
6.6
6.8
Descriptive Questions
6.9
6.10
INTRODUCTORY CASELET
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Similar ERP systems of configure-to-order have also been adopted by other market leaders such as Dell and Apple.
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6.1 INTRODUCTION
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Anish wants to buy a pair of shoes for himself, but he is not finding
the time to visit a store. Thus, he searches an online shopping site on
the Internet, selects a pair of shoes from a wide variety of options, and
pays for them using his debit card. He receives the bill for the shoes
on his e-mail and receives the delivery at his home within five days.
How does this type of purchasing process work? How and when is the
storehouse of the organisation informed about the requirement of the
product, or how does the finance department know that the payment
is made, or the sales department know that a product needs to be delivered? All this information is passed to different departments at the
same time. This is made possible by implementing an ERP system.
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elaborates the implementation of an ERP system. In the end, the reasons for the failure of ERP implementation are discussed.
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CRM Module
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Inventory Module
Purchase Module
Production Module
Sales Module
In general, there are two types of ERP systems that are implemented
by organisations. These systems are discussed as follows:
Commercial ERP Package: These packages are quite expensive
and suitable only for large-scale organisations. Most of the well
known ERP vendors, such as Oracle, SAP, and Microsoft, provide
commercial ERP packages. For implementing these packages, organisations need to change their existing technology and business
processes and provide extensive training to its employees, so that
they can work with the package. Some of the commercial ERP
software are Microsoft Dynamics AX, Microsoft Dynamics NAV,
and mySAP ERP.
DEFINITION
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According to Deloitte Consulting, ERP is a packaged business software system that enables a company to automate and integrate the
majority of its business processes; share common data and practices
across the enterprise; and produce and access information in a real-time environment.
As per the American Production and Inventory Control Society
(2001), ERP system is a method for the effective planning and controlling of all the resources needed to take, make, ship, and account
for customer orders in a manufacturing, distribution or service company.
According to Nah and Lau (2001), ERP is a packaged business software system that enables a company to manage the efficient and effective use of resources (materials, human resources, finance, etc.) by
providing a total, integrated solution for the organisations information-processing needs.
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Technological Evolution
With Respect to ERP
Before
Organisations used different inventory control methods and
the 1960s models, such as Economic Order Quantity (EOQ), fixed order
quantity, periodic order method, and optional replenishment
method, for managing their business processes.
1960s
1970s
The Material Requirements Planning (MRP) system was invented, which helped organisations in identifying the materials
requirement for producing products, reducing inventory levels
and lead time, and maintaining on-time delivery performance.
Later on, with the addition of various software tools, the functions of the MRP system were enhanced, and it was also used
for performing activities such as sales planning, customer order processing, capacity planning, etc. This enhanced version of
MRP system was known as closed-loop MRP.
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1980s
The MRP II system, an assimilated form of various other systems, such as financial accounting system, manufacturing
system, material management system,etc., was invented. It
enabled an organisation to estimate the material and capacity
requirements for producing products and transform these requirements to financial information. However, there were certain drawbacks of the MRP II system such as limited focus on
manufacturing activities, assumption of repetitive production
set ups, and ineffective budgetary and costing controls.
1990s
Drawbacks of MRP II led to the evolution of ERP, which integrates the flow of information within the different departments
of an organisation such as finance, production, marketing, and
human resource. ERP enabled organisations to streamline their
business processes, improve workflow, and increase customer
satisfaction.
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SELF ASSESSMENT QUESTIONS
ACTIVITY
Using the Internet, identify an organisation that has first implemented MRP system and then replaced it with the ERP system.
Identify the reasons for the same.
Are you aware of the advantages of using an ERP system in an organisation? An ERP system provides several direct and indirect benefits
to an organisation. Some of these benefits are discussed as follows:
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Reduced Lead Time: Lead time is the amount of time taken between the placing of an order and the receipt of products by a customer. For example, when an organisation places an order for raw
materials with a supplier, the time given by the supplier to deliver
the order, such as within 15 days, is considered the lead time.
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The customer service representative asks you the model number of the product and your personal details. He/she enters the
details in the ERP system and derives detailed information about
the product you have purchased and thus is able to provide you a
solution. You neither need to be present at the customer service
department to have a problem solved nor do you need to visit the
department again and again. Your problem gets resolved within
minutes using the ERP system.
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Improved Supplier Performance: An ERP system contains features that help an organisation to manage supplier relations and
track vendor activities. For example, an ERP system can help an
organisation to check whether the product received from the vendor contains the quantity and quality mentioned by the organisation while placing the order. For this, the store manager, who
received the product, needs to check the information related to the
order placed in his/her system using the ERP system and match
it with the product recieved. Nowadays, most organisations make
an agreement with their suppliers for procuring good-quality raw
materials at lower prices. An ERP system helps an organisation in
controlling and managing agreement-related activities.
Increased Flexibility: An organisation needs to modify its products, services, or overall business strategy according to the ever-changing wants, tastes, and preferences of its customers. For
example, an organisation needs to modify its products, services,
or overall business strategy according to the ever-changing wants,
tastes, and preferences of its customers.
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This information helps departments to take several crucial decisions such as selecting a product to be produced, determining the
different sources of funds, and selecting the right technology for
production purposes.
NOTE
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Pre-evaluation
screening
Package
evaluation
Project
planning phase
Gap analysis
Testing
Implementation team
training
Configuration
Reengineering
Going live
End-user
training
Post-implementation
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ACTIVITY
Using the Internet, find out a real life example of ERP system implementation in a manufacturing organisation.
6.6
One of the findings of our 2013 ERP Report is that most ERP projects
take longer than expected, cost more than expected, and fail to deliver
expected business benefits. In addition, in our 2013 ERP Report: Organisational Change and Business Process Management, we find that 41%
of organisations experience some sort of material operational disruption at the time of their go-live.
-Panorama Consulting Solutions
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Most problems faced while implementing an ERP system can be overcome if organisations follow a step-by-step approach. The steps that
should be followed by an organisation are mentioned as follows:
1. Define the objectives and targets of implementing an ERP
system.
2. Define the role of different departments in the implementation
of an ERP system.
3. Formulate a project team for the implementation of an ERP
system.
4. Select the ERP vendor.
5. Select the ERP system as per the requirements and the objectives
of ERP implementation.
6. Implement the ERP system (as discussed in section 6.7 ERP
Implementation).
7. Monitor the performance of the ERP system.
Sometimes, organisations also hire an outside experienced consultant. This consultant acts as a coordinator between the ERP vendor
and the organisation. The consultant should have experience in ERP
implementation. However, the availability of an experienced consultant is low. Therefore, it is preferred that an organisation should select
employees with the required technical skills and train them to work in
coordination with external consultants.
SELF ASSESSMENT QUESTIONS
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ACTIVITY
Using the Internet, identify a real life example where ERP system
implementation has failed due to lack of training.
6.7
SUMMARY
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S
KEY WORDS
Cycle Time: The time that starts when work begins on the request
of a customer and ends when the product is ready for delivery.
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DESCRIPTIVE QUESTIONS
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6.9
Q. No.
Answers
1.
Multi-module
2.
False
3.
Control
4.
1970s
5.
6.
False
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Topic
Q. No.
ERP Implementation
Reasons for the Failure of
ERP Implementation
Answers
7.
b. Gap analysis
8.
Testing
9.
False
10.
True
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CASE STUDY
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QUESTIONS
7.3
7.4
7.4.1
7.4.2
7.4.3
7.4.4
7.4.5
7.4.6
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7.2
7.5
7.6
7.7
7.8
7.9
INTRODUCTORY CASELET
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7.1 INTRODUCTION
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Electronic Data Interchange is a widely-used technology for computer-to-computer automated exchange of business documents between
business partners. The transfer of documents takes place in a standard electronic format between dissimilar applications. Using EDI
techniques, documents, such as purchase orders, advance ship notices, invoices, and other business documents, can be exchanged directly between business partners, without human intervention, from one
business system to another.
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There has been a major transformation in the way businesses exchange documents after the introduction of EDI. By shifting focus
from paper-based exchange of business documents to electronic, businesses have experienced major benefits such as reduction in administrative cost, reduction in errors, fast order-to-cash cycles, and increase in processing speed. Moreover, this leads to improved relations
with business partners too.
In business systems, EDI has replaced postal mail, fax, and e-mail. Although e-mail uses an electronic approach, it is still handled by people
rather than computers for exchanging documents. Human intervention involves errors and also slows down the processing of documents.
On the other hand, EDI is an automated process in which documents
can get transferred directly to the specific suitable application on the
receivers computer, for example, the Order Management System, and
processing can start immediately.
Before the introduction of EDI, a typical manual process in a business
environment used to be as depicted in Figure 7.1, with people and
paper involved:
Customer
Customer creates order sends order
Your
customers
internal
system
You
receive order
You
enter order
FAX
Your customer
enters invoice
Your customer
receives invoice
Your
internal
system
You send
invoice
You create
invoice
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EDI Documents
EXHIBIT
(Source: http://www.edibasics.co.uk/what-is-edi/)
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order was received. With the introduction of EDI, the whole scenario
changed dramatically. Purchase managers still prepare their material requirements list and create purchase orders. However, instead of
taking a print and mailing them, the purchase orders are automatically transmitted directly to the suppliers system over an electronic
network using EDI.
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EDI standards have been defined to be independent of any communication media. Thus, the EDI data transfer can take place using any
electronic media from magnetic tape to telecommunication. It must
be ensured that a valid connection has been established between the
sender and the receiver before any transaction can occur. Moreover,
methods of error checking and recovery must be established between
both the sides to safeguard against loss of data.
ANSI ASC
X12
VICS
EANCOM
VDA
UN/EDIFACT
Standards
of EDI
Tradacoms
SWIFT
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HIPAA
ODETTE
RosettaNet
The American National Standards Institute (ANSI) chartered the Accredited Standards Committee (ASC) X12 to develop uniform standards for EDI in 1979. Originally, ANSI X12 was started to support
companies across different industry sectors in North America. However, more than 300,000 companies worldwide follow X12 EDI standards in daily business transactions today.
In the ANSI ASC EDI standard, the data structure and content are
defined for business transactions to be transmitted between computer applications. The data is grouped to represent all the information
required for a particular business function such as a purchase order.
The business form in ANSI ASC X12 specifies standard data elements
with data dictionaries that specify name, length of data field, description, data type, and meaning.
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S
UN/EDIFACT
United Nations (UN)/Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT) is a set of internationally
agreed-upon standards that was developed by the UN. The UN Centre
for Trade Facilitation and Electronic Business (UN/CEFACT) is responsible for the maintenance and further development of this standard.
EDIFACT provides a set of guidelines for the electronic interchange
of structured data particularly related to trade in goods and services.
The EDIFACT standard defines a set of syntax rules for interactive exchange of information and provides a set of standard messages, which
enable exchange of electronic business documents across countries
and industries. EDIFACT is used widely across Europe because many
companies adopted it early.
EDIFACT consists of data elements (a value), segments (a logical
group of data elements), and messages (a collection of segments relating to a business function), and rules for combining all of these.
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ROSETTANET
The RosettaNet is a document standard that is based on XML (Extensible Markup Language), which defines guidelines for message transfer, business processes interface, and implementation frameworks for
interactions between companies. RosettaNet is a syndicate of major
computer, consumer electronics, semi-conductor manufacturers, telecommunications and logistics companies integrating to develop and
maintain e-business process standards across industries. These standards follow a common e-business language to regulate processes between supply chain partners across the globe. These standards enable
business partners of all sizes to connect electronically, so that they
can process transactions and move information within their extended
supply chains.
SWIFT
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S
TRADACOMS
Tradacoms is one of the earliest-developed EDI standards. It was primarily used in the UK retail sector. Originally, it was introduced in
1982 as a precursor to EDIFACT and was maintained and further developed by the UK Article Numbering Association, now called GS1
UK. This standard is now obsolete in the retail sector since the development of the EDIFACT EANCOM subsets in 1995 but still proves to
be effective in a majority of the retail EDI traffic in the UK.
VICS
VDA
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ACTIVITY
From the Internet, find out about the works done by institutes such
as ANSI and EDIFACT. Make a note about their field of work.
From the point of view of an organisation, whether using EDI for the
first time or expanding an existing EDI infrastructure to support business partners across the globe, the transmission mode being utilised
for EDI depends on the needs of the business, its technical capabilities, and its budget. Hybrid EDI transmission modes are also implemented by many big companies to connect with their business partners, depending upon the size and frequency of their transactions.
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Direct EDI/Point-to-point
Web EDI
Mobile EDI
EDI Outsourcing
7.4.1
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Inspection and Authentication of All EDI Messages: The VAN verifies the identity of the trading partner and the validity of the message.
Full Audit Trail: All EDI messages are tracked and recorded.
Message Notification: Trading partners are notified when the message enters their mailbox.
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Ancillary Services: VAN providers offer an extensive range of services, including data backup and recovery, document mapping,
and compliance.
7.4.2
INTERNET/AS2
AS2 or Internet/AS2 is also one of the most popular methods for transporting EDI data securely and reliably over the Internet. In this transmission mode, two computers are involved, a client and a server. They
are connected in a point-to-point manner through the Web. AS2 uses
digital certificates and data encryption to secure the data and create
an envelope for the EDI data, enabling it to be sent securely over
the Internet.
EDI via AS2 is a point-to-point transmission mode, thus, it necessitates the organisations server that is on the receiving end to be always
listening out for messages directed to it. It is similar to a telephone
without an answering machine; the incoming message is lost if the
server is not available to take the call. Thus, organisations that want to
avail the benefits of AS2 decide to outsource it to an EDI network provider to be available always and receive EDI transmissions non-stop.
Availing the resources of an EDI network provider provides the following benefits to an organisation:
The AS2 mandates can be followed without actually incurring the
expense of the AS2 infrastructure, such as software, hardware,
firewalls, and expertise, which would otherwise be needed to implement AS2 in the organisation.
The EDI network provider takes care of the exchange of AS2 setup information.
The EDI network provider carries out AS2 testing for the organisation and its business partners.
Documents are exchanged in real-time, because there is a pointto-point connectivity.
WEB EDI
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7.4.3
The organisation benefits from the EDI network providers infrastructure, skills, and security without the need to invest in these
itself.
Web EDI takes the help of an Internet browser for carrying out EDI. In
Web EDI, paper documents are replicated as Web forms. These forms
contain fields for users to enter information. After the form is filled
with all the relevant information, the form gets converted automatically into an EDI message. This message is then sent over the Internet
using secure Internet protocols such as File Transfer Protocol Secure
(FTPS), Hyper Text Transport Protocol Secure (HTTPS), or AS2.
DIRECT EDI/POINT-TO-POINT
Direct EDI or Point-to-Point EDI establishes a single secure line between two business partners. An organisation communicates with
each of its business partners individually thus having to manage hundreds or thousands of separate connections. In this approach, a business and its partners are connected directly through the Internet, using the same communication method or protocol. If different business
partners are using different communication protocols, this approach
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MOBILE EDI
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7.4.6
EDI OUTSOURCING
For businesses that prefer to outsource their EDI processes, EDI outsourcing is an option, which is also called managed services. Managed services is the outsourcing of an organisations EDI process to
a third-party provider. Sometimes, implementing and managing an
EDI platform can be a daunting task for an organisation. It requires
heavy capital investment in hardware, software, and also in technical
skills. The key reason for outsourcing of EDI is the reduction in cost of
investing in the organisations own infrastructure, while ensuring that
there is access to the right level of skills to deliver the required service.
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Ancillary Services
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7.5
ADVANTAGES AND
DISADVANTAGES OF EDI
EDI not only has advantages in its favour but also faces a few disadvantages. Let us discuss them in the following sections.
ADVANTAGES OF EDI
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Speed: EDI requires little or no human intervention, thus, the information moves more rapidly between computers, lending speed
to the whole system. If the EDI process is directly integrated into
an organisations accounting or Enterprise Resource Planning
(ERP) system, the direct data flow accelerates the processing of
orders, packing, shipping, invoicing, etc.
By implementing EDI, the transactions that take 5 days by paper mails can be completed in less than an hour. For example, an
American automotive corporation reduced the process cycle time
by 97%, i.e. the process that used to take 30 days was reduced to 24
hours. A major retailer reduced its order cycle time by 75%, from
24 days to 6 days.
Accuracy: In EDI, the information is passed directly from one computer to another. This direct transmission from computer to computer, without any human intervention and not having to re-enter the information, eliminates the chances of data-entry errors.
Moreover, there are negligible chances of the receiving computer
to invert digits or add an extra digit in the incoming information.
Thus, the overall accuracy in the system is ensured.
According to a research, paper-based processes often lead to as
much as 5% of the data on an invoice being inaccurate. Accuracy
in data leads to an efficient supply chain management in the organisation. Some estimates indicate that implementation of EDI
can result in 30% faster delivery time to customers.
Economy: EDI proves to be economical for an organisation, because the cost of sending an electronic document is comparable
to a regular first class postage. In addition, there is a reduction in
the overall cost by eliminating the errors due to re-keying of data,
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human handling, routing, and delivery. This leads to a net and substantial reduction in the cost of a transaction.
According to a research, implementing EDI has reduced the cost
by almost two-third of its paper-based equivalent.
Another research puts the cost at 70 times less. A leading American company reported that there is a reduction in its order processing costs from $38/order to $1.35/order with EDI. A study from
the European market states that by taking 10 minutes less to process for every electronic invoice saves 120 euro per invoice every
year. Similarly, in the UK, it was found that UK grocers saved 14
on every electronic order.
Increase in Business Efficiency: Automated system with no paper-based tasks leads to employees being free to concentrate on
higher-value tasks and be more productive. EDI has an immediate processing of error-free business documents, thus, it leads to
less re-working of orders. There are fewer stock outs and less cancelled orders. Buyers can take advantage and bargain for better
payment terms and discounts. Similarly, sellers can also benefit
from improved cash flow and reduced order-to-cash cycles. Reduction in order processing time and delivery times results in having to maintain reduced inventory levels.
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DISADVANTAGES OF EDI
Although the benefits of EDI are irresistible and have been oft repeated in boardrooms around the world, it has a downside too. In small to
mid-sized companies, there is still far less acceptance and reluctance
to implementation of EDI.
Following are a few disadvantages of EDI:
Expense: Business application systems are complex and expensive and are regarded as peripheral functions of a business. They
were not considered as being fully integrated into all business activities. Thus, although implementing EDI leads to substantial savings for an organisation, for small to mid-sized companies, the cost
of re-designing and deploying software business applications to
incorporate EDI into an existing system proves to be a deterrent.
Network Complexity: Besides computer systems, EDI needs a basic infrastructure to transmit and receive information to and from
a wide variety of customers or suppliers. A heavy investment in
ACTIVITY
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7.6 SUMMARY
185
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American National Standards Institute (ANSI): ANSI is a private non-profit organisation that oversees the development of
voluntary consensus standards for products, services, processes, systems, and personnel in the US.
186
Standards of EDI
1.
False
2.
Business partners
3.
b. EAN
4.
Transmission
Modes of EDI
5.
6.
7.
True
VAN
8.
Advantages and
Disadvantages of
EDI
Answers
Introducing EDI
Q.No.
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9.
False
10.
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8.3
8.3.1
8.4
8.2.1
8.2.2
8.2.3
Introduction
Data Warehousing
Need for Data Warehousing
Goals of Data Warehouse
Constituents of Data Warehouse
Self Assessment Questions
Activity
Definition of Data Mining
Data mining parameters
Self Assessment Questions
Activity
How Data Mining works?
Types of relationships
Self Assessment Questions
Activity
Architecture of Data Mining
Self Assessment Questions
Activity
Functionalities of Data Mining
Self Assessment Questions
Activity
Classification of Data Mining system
Self Assessment Questions
Activity
Meaning of Business Intelligence
Evolution of Business Intelligence
Importance of Business Intelligence in Organisations
Business Intelligence in Contemporary Organisations
Self Assessment Questions
Activity
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8.1
8.2
8.4.1
8.5
8.6
8.7
8.8
8.8.1
8.8.2
8.8.3
CONTENTS
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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8.9
8.10
8.11
8.12
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INTRODUCTORY CASELET
DATA WAREHOUSING SOLUTION FOR ONE OF
EUROPES LARGEST FINANCIAL SERVICES GROUPS
One of the big clients of Infosys required a business intelligence solution to; strengthen the mortgage administration processes, provide better sales cycle management, mortgage product performance analysis, financial forecasting according to sales
demands, fraud detection and general mortgage operational reporting. The client is one of Europes largest financial services
groups in corporate and commercial banking, retail banking,
credit cards and general insurance. The company sells mortgages
to corporate and retail customers with the help of different channels. These mortgage systems run on diverse technology platforms and monitor different business processes.
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INTRODUCTORY CASELET
The implementation of the highly scalable solution led to the following benefits by meeting the requirements:
Transaction volume expected: 73 Million per year; annual
growth rate of 110%
Size expected: 180 GB at the end of Year 1; annual growth rate
of 45%
(Source: http://www.infosys.com/consulting/information-management/case-studies/Pages/data-warehousing-solutions.aspx)
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8.1 INTRODUCTION
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An organisation needs to deal with data in its day- to- day operations
and it has to perform various calculations on data to get the desired
information. Organisations use various methodologies for storing, retrieving and analysing data to run its business successfully. Some of
these methodologies are data warehousing, data mining and business
intelligence.
Data warehouses are used to combine data located in different databases. A data warehouse stores huge amount of data by specific categories so it can be accessed, interpreted, and sorted easily by users.
Warehouses allow business experts and managers to work with enormous stores of transactional or other data for responding quickly to
markets and increasing the effectiveness of business decisions.
According to a study, every business will have a data warehouse within ten years. But simply storing data in a data warehouse does not
make any substantial difference for an organisation. The organisation
benefits when it can extract meaningful trends and patterns from the
data. For finding meaningful trends and patterns data mining is used
by the organisations.
Data mining (also known as knowledge discovery) is the process of
analysing data from different sources and summarising it into valuable information. This information can be used to increase revenue,
cuts costs, or both. The main objective of data mining is to identify the
patterns that are hidden in a huge amount of data and interpret them
to useful information. Data warehousing and Data mining play major
roles in business intelligence.
Business Intelligence (BI) is used to analyse organisations data and
turning it into meaningful information to make effective decisions for
business. BI software for data mining takes advantage of data mining
and data warehousing to help in collecting information faster and in a
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Data warehouse is a key data storage mechanism and plays a very crucial role in an organisations information system. Although data warehouse and database both are used to store data but the data warehouse
is more efficient than a database. In data warehouse, we can store
huge amount of data as compared to a database. Data warehouse is
more effective in providing the organisation the required information.
8.2.1
There are so many data fields such as rolled-up general ledger balances on computer screens which are frequently needed by the
users. These fields are provided by the data warehouse not databases and business experts become habitual of these fields.
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Reporting and analysis functions in databases often give poor performance. Therefore, data warehousing should be used for reporting and analysis.
BI users perform various calculations on data and might misuse
or corrupt the transaction data which makes data warehousing a
necessity.
8.2.2
These factors prove that data warehousing is much needed in organisations. Since, data warehousing has become more economical in the
past few years, organisations can take complete advantage of data
warehousing by implementing it in business and manage their data
efficiently.
GOALS OF DATA WAREHOUSE
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SELF ASSESSMENT QUESTIONS
ACTIVITY
Differentiate between data warehouse and data marts. You can utilise the Internet for any related searches.
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For example, one grocery chain used the data mining software to analyse buying patterns of local people. They discovered that when men
bought bread on Fridays and Saturdays, they also purchased beer.
Further analysis showed that these shoppers typically did their weekly grocery shopping on Saturdays. On Fridays, however, they only
bought a few items. This pattern showed that they purchased beer
for the upcoming weekend. The grocery chain could use this newly
discovered information in various ways to increase their profit. For instance, they could relocate the beer display closer to the bread display
and also ensure that beer and bread were sold at full price on Fridays
and Saturdays.
Data mining tools and techniques are used by many companies such
as retail, finance, health care, manufacturing transportation, and
aerospace to take advantage of historical data. Using pattern recognition technologies and other useful techniques such as statistical and
mathematical techniques to examine information available in the data
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Sequential
Patterns
Classes
Data Mining
Parameters
Clusters
Associations
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S
SELF ASSESSMENT QUESTIONS
ACTIVITY
List some more details about data mining parameters. You can take
the help of Internet for any related searches.
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Have you wondered how through data mining business experts are
able to predict what is going to happen next? The technique that is
used to perform these acts is called modelling.
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There are various types of information about the customers that you
can retrieve with the help of data mining.
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8.4.1
TYPES OF RELATIONSHIPS
Data mining provides the link between transaction and analytical system. It analyses relationships and patterns in transaction data based
on end user queries. The different types of data mining tools are avail-
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able such as statistical, machine learning, and neural networks. Generally, any of four types of relationships are seen:
Regression: Regression creates a relationship between a dependent or outcome variable and a group of predictors. In other words,
it maps a data item to prediction variable. Regression is supervised
learning that partitions the data into training and validation data.
Time Series Analysis: It examines the value of an attribute which
changes over the time. It comprises ways and means for analysing
time series data to extract meaningful statistics and other characteristics of the data.
Prediction: Many data mining tools can predict states of future
data based on historical and current data. Prediction machine
comprises flooding, machine learning, speech recognition, and
pattern recognition.
Summarisation: It can be defined as the abstraction or generalisation of data. Data is summarised and abstracted which results in
a smaller set that provides the general overview of data. For example, long distance calls made by a customer can be summarised as
total minutes, total calls, total cost etc.
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ACTIVITY
Loose Coupling
Semi-Tight Coupling
Tight Coupling
Let us discuss these different possible types of data mining architecture in the following section:
No-coupling: In this architecture, data mining system does not
use any functionality of a database or data warehouse system. A
no-coupling data mining system accesses data from a specific data
sources such as file system. It uses major data mining algorithms
to process data and then it stores the results into the file system.
This data mining architecture does not adopt any advantage of database or data warehouse which are already very efficient in organising, storing, accessing and retrieving data. Flat file processing is an example of this architecture.
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Semi-tight Coupling: In this data mining architecture, data mining system not only links database or data warehouse system but it
also has various features of database or data warehouse to perform
some data mining tasks such as sorting, indexing and aggregation.
In this architecture, some intermediate result can be stored in a
database or data warehouse system for improving performance.
10.
203
Market
segmentation
Trend
analysis
Customer
churn
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Market
basket
analysis
Interactive
marketing
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Fraud
detection
Direct
marketing
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SELF ASSESSMENT QUESTIONS
Interactive marketing
d. Direct marketing
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ACTIVITY
8.7
Data mining is a field that consists of a set of disciplines, including database systems, statistics, machine learning, visualisation, and information science. Additionally, depending on the data mining approach
used, we can also apply other techniques, such as neural network
methods for data mining. The data mining system may also integrate
techniques from spatial data analysis, information retrieval, pattern
recognition, image analysis; signal processing, computer graphics,
web technology, economics, or psychology depending on the kinds of
data to be mined or on the given data mining application.
Because of the variety of disciplines contributing to data mining, data
mining research is likely to produce a large variety of data mining
systems. Therefore, a distinct classification of data mining systems is
needed. This kind of classification may help potential users in differentiating data mining systems and identifying system depending on
their needs.
Data mining systems can be classified according to various criteria, as
follows:
Classification using the kinds of databases mined: You can classify a data mining system according to the kinds of databases mined.
Database systems themselves can also be classified according to
different criteria such as data models, types of data, or applications
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involved, each of this may need its own data mining technique.
Therefore, data mining systems can be classified accordingly.
For instance, if we classify according to data models we may have
a system which could be relational, transactional, object-oriented,
object-relational, or data warehouse mining system. If we classify
according to the types of data, we may have a spatial, time-series,
text, or multimedia data mining system, or a World Wide Web mining system. Other system types comprise heterogeneous data mining systems, and legacy data mining systems.
Classification using the kinds of knowledge mined: We can classify data mining systems according to the kind of knowledge they
mine, i.e. on the basis of data mining functionalities, such as characterisation, discrimination, association, classification, clustering,
trend and evolution analysis, deviation analysis, similarity analysis, etc. A complete data mining system usually provides numerous integrated data mining functionalities.
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Business intelligence (BI) is an umbrella term that consists of different types of business software applications. These software applications are used to analyse an organisations raw data. The raw data is
the data that business records in the daily transactions of an organisation. Data may come from different activities such as interactions
with customers, management of employees, execution of operations
or administration of finance. BI is made up of various associated activities, including data mining, online analytical processing, querying
and reporting.
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BUSINESS INTELLIGENCE
Enterprise
Reporting
Data
Mining
Performance
Management
Data
Ware House
TRANSACTIONAL DATABASES
Organisations use BI for improving the decision making process, reducing costs and identifying new business opportunities. BI provides
corporate reporting and a set of tools to extract data out of enterprise
systems. Also, CIOs (Chief information Officer) of organisation use
BI to recognise unproductive business processes that are suitable for
re-engineering.
BI tools enable users to analyse data themselves instead of waiting
for IT experts to run complex reports. This simplification of BI use
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Reporting and analysis are the most crucial part of business intelligence and most BI vendors compete by adding and improving these
features to their solutions.
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Let us discuss how BI has evolved through recent years in the following section.
Reduced Dependency on IT Experts: Today, BI is no longer solely
controlled by IT departments in an organisation other business
users are also able to control the BI tools. It is positive change towards reducing the dependency of business users on IT experts.
Therefore, business users community can have an active role in
BI processes. With the rise of powerful desktop BI tools such as
Tableau, Tibco Spotfire, and SAS Visual Analytics, it is now possible for users to have BI on their desktops computers that used to
be reserved for enterprise-level tools. These tools are not the replacement of enterprise BI tools. Rather, they provide users more
flexibility to explore and discover new possibilities in decision
making and reporting.
Unrestricted Reporting: Latest BI tools have destroyed the notion of restricting users to the reports they have been given. In
many organisations, users now can freely explore data and create
the reports they desire. Obviously, there are still limitations on the
consumption of system resources for a user and security still ensure users can only access data for which they have authorisation.
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Consumer
Behavior Insights
Improved Visibility
Actionable Information
Improved Efficiency
Consumer Behavior Insights: One of the main advantages of implementing business intelligence software is the fact that it will
enhance the organisations ability to analyse the current consumer
buying trends. After finding out what your consumers are buying,
you can use this information to develop products that match the
current demands and improve your profitability as you can attract
valuable customers.
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Improved Visibility: BI enables you to control over various important process in an organisation. Therefore, you should invest
in a good business intelligence system. Business intelligence software enhances the visibility of these processes and makes it possible to recognise areas that need to be improved. In addition, if you
have a situation where you have to go through many pages in your
detailed periodic report to assess the organisations performance,
you can save time by skilled intelligence analysts using the BI software.
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prove efficiency of organisation which leads to the increased productivity. Business intelligence can be used to share information
across different departments in your organisation. It reduces the
time in reporting processes and analytics. This simplification of
information sharing reduces the duplication of duties within the
organisation and improves the accuracy and usefulness of the data
produced by different departments.
In order to obtain all the benefits of an effective business intelligence
system, organisations need to ensure investing in skilled BI personnel and software designed for analytical proficiency and availability. It
also needs to be ensured that the selected system can analyse both the
content and context of data.
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A successful BI solution can enhance the productivity of your organisation. It supports your processes and best practices and allows employees to boost the power of the entire organisation. The right BI
solution provides financially accurate information and the ability to
use it in your organisation. This empowers you to make effective business decisions that can impact an organisation in the best way possible.
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8.9 SUMMARY
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Data warehouse can be simply defined as a collection of data to support the information system process. It stores very large amount of
data to retrieve information that helps in decision making.
A data warehouse is made of various constituents or components
that are essential to make a data warehouse work efficiently. These
components are combined together to make an effective data
warehouse.
Data mining is the process of digging through huge amount of data
and analysing it for extracting the useful meaning from the data.
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KEY WORDS
ASCII: It an acronym of American Standard Code for Information Interchange with a character encoding scheme.
Hadoop: It is a software framework for scalable and distributed
programming.
Teradata: It refers to a fully scalable relational database management system developed by Teradata Corp.
Neural Network: It refers to a type of artificial intelligence that
attempts to imitate the functioning of the human brain.
Standardisation: It refers to a process in which files are first
parsed and then interpreted to a common format.
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Q.No.
Answers
1.
hub
2.
False
3.
c.
4.
5.
d. Dimensions
Data mining
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Topic
Q.No.
Architecture of Data
Mining
Functionalities of Data
Mining
Classification of Data
Mining System
Meaning of Business
Intelligence
Answers
6.
True
7.
relationships, patterns
8.
False
9.
Summarisation
10.
No-Coupling
11.
database, warehouse
12.
False
13.
products, services
14.
True
15.
b. Trend analysis
16.
integrated
17.
advanced, simplify
18.
True
19.
20.
Reporting
21.
True
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SUGGESTED READINGS
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E-REFERENCES
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CASE STUDY
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Such analysis depends on the clean data retrieved from the data warehouse. Oco used the technology based on an artificial intelligence engine
that accesses data from various sources and then cleans and organise it
into an intellectual data schema. This schema is used to extract customer data from Dunkin Donuts multiple systems and clean it up in a data
warehouse. Updated information is fed daily into data warehouse.
Dunkin Donuts CIO Dan Sheehan compares the system to a customer
management system along with a scorecard. According to him, Its a
huge win in terms of instant access to who and what is in the pipeline.
When you look at a.m. market, we have been a leader in the Northeast.
Now we will take the leadership and go across the country and the
world.
(Source: Compiled from Business Wire, 2007, and Weier, 2007)
QUESTIONS
9.3
9.2.1
9.2.2
9.2.3
9.2.4
9.2.5
Introduction
Introducing Decision Support System
Evolution of DSS
Components of DSS
DSS Architecture
Analytical Models in DSS
Characteristics of DSS
Self Assessment Questions
Activity
Types of DSS
Self Assessment Questions
Activity
Tools and Technologies Supporting DSS
Self Assessment Questions
Activity
DSS and Outsourcing
Self Assessment Questions
Activity
Group Decision Support Systems
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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9.1
9.2
9.4
9.5
9.6
9.7
9.8
9.9
9.10
INTRODUCTORY CASELET
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It provides knowledge regarding the best market to sell agriculture products to get the maximum benefit. For example,
DSS provides information about when the local market price
for sugarcane is less than the price offered by the government.
Equipped with such information, a farmer can sell the products to the government.
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9.1 INTRODUCTION
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Decision making can be defined as a process of choosing the best alternative amongst all the available alternatives to resolve a particular
problem. The decision-making process includes reasoning ability and
knowledge of a high level. In organisations, formerly, this process was
restricted to the top level management, but today, with the decentralisation of authority, employees who work at different levels in the organisation participate in the decision-making process. Every decision
made by an organisation includes a high degree of risk, because an
ineffective decision may harm the performance of the organisation.
DSS is a type of information system that helps in the decision-making process of an organisation. It helps an organisation to detect the
problem, create alternatives, analyse these alternatives, and choose
the best course of action. Apart from this, DSS also enables an organisation to monitor and control the performance of the selected course
of action.
The chapter starts with a discussion on DSS along with its characteristics. The components of DSSs that generate it along with various
models for understanding are also explained in the chapter. Further,
the chapter elaborates on the classification of DSS and the various
tools and technologies utilised for its functioning. The chapter also
discusses DSS and outsourcing. Towards the end, the chapter explains Group Decision Support System (GDSS).
9.2
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It helps the decision-making process of an organisation and enables it to make a better selection from the available outcomes.
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Management
Personnel
Data
Computer
system:
data
processing
Information:
reports
model results
what if?
analysis
Accounting
Production
Decisions
Marketing
Distribution
Other areas
Quantitative
techniques
What-if? analysis
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According to Keen and Scott-Morton (1978), A DSS couples the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support
system for management decision makers who deal with semi-structured problems.
9.2.1
EVOLUTION OF DSS
Do you know when DSS made its first appearance in the market? The
concept of DSS was introduced by Meador and Ness (1974) in their
article, An Application to Corporate Planning. In A Study of Computer
Aided Decision Making in Organisations, Keen has stated that there
are two main areas of research from where concepts of decision support have developed. The first area comprises research about organisational decision making, and the second contains research in the field
of technology, which is associated with interactive computer systems,
between 1950s-1960s.
The initial involvement in this field turned out as a classic management information system, which was able to provide pre-defined management reports to support decision making processes. This development introduced DSS with ad hoc and interactive support in decision
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9.2.2
COMPONENTS OF DSS
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DSS ARCHITECTURE
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DSS software is able to interact with the end user while providing
information. This feature increases its efficiency from just being a
provider of reports to a provider of interactive support for business
professionals. It could select relevant data from among the entire
data store to compile it while providing information support.
DSS is a knowledge-based system, thus, it acts as a storage of
shared knowledge from individual users, experts, and various
business models for identifying and solving problems, and making
decisions.
DSS helps in maintaining the integrity of data along with flexibility, so that it can match the decision makers choice, storing and
retrieving the data and ensuring the consistency and accuracy of
the collected data.
DSS stores information in a powerful database, which can be easily distributed and is accessible to individuals throughout the organisation. DSS also helps in an easy access to historical information related to various decisions made by an organisation.
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DSS helps in analysing the future in a given set and trend of circumstances with its reasoning capability. In a given trend of market situations, a DSS can forecast a markets bulls and bears in the
coming month.
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S
Model-driven DSS
Communication- driven DSS
Data-driven DSS
Document-driven DSS
Knowledge-driven DSS
Web-based DSS
Types of DSS
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Communication-driven DSS: It enhances decision making by facilitating a free flow of information among groups and people. This type
of DSS basically supports group decision making. This type of DSS
can be implemented by using the Web or client-server technology.
The communication-driven DSS can range from a simple e-mail to
a complex Web conferencing application. Examples of communication-driven DSS are online chats, collaboration, and meetings.
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9.4
Various tools and technologies are used for making the working of DSS
easy and effective. Some of these tools and technologies are shown in
Figure 9.4:
Extraction, Transformation,
and Loading (ETL)
Online Analytical
Processing (OLAP)
Relational Online Analytical
Processing (ROLAP)
Multidimensional Online Analytical
Processing (MOLAP)
Hybrid Online Analytical
Processing (HOLAP)
Dialogue Management
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and data definition language that describes the dialogue component of DSS architecture. It also focuses on command language and
menu dialogues that create a restrictive context for building DSS.
SELF ASSESSMENT QUESTIONS
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Full time resourcing remains viable for only large business organisations, where the range of research and development can justify the
ongoing investment. To streamline business processes, organisations
can outsource activities that are not considered core business functions. In many organisations, software development is considered a
non-core activity. The term software acquisition has been used to
describe situations where a customer contracts with a software development organisation for the complete development of a software
product. Outsourcing involves contracting with outside consultants,
software houses, or service bureaus to perform system analysis, programming, or other DSS-development activities. The outsourcer
should be evaluated as a long-term asset and a source of ongoing value
to the organisation.
Some of the benefits of outsourcing of DSS projects are:
It facilitates low-cost development of products/services.
It provides access to expertise on new technologies.
It allows organisations to release resources for other projects.
It enables organisations to focus on specialised business processes
instead of relative business processes.
Outsourcing of DSS has become risky in sensitive industries, such
as defence and healthcare, due to regulations set by the government
such as Health Insurance Portability and Accountability. Most of these
risks are as follows:
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Using the Internet, find out two organisations that have outsourced
DSS.
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GDSS involves an automated system for record keeping and maintaining. GDSS supports decision making by providing records automatically whenever required.
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9.7 SUMMARY
DSS is an interactive information system that delivers information
to business experts and managers for making effective decisions.
The different components of DSS are DBMS, knowledgebase
management system, model management system, and user interface management system.
The four components of DSS architecture are DSS network, DSS
bridge, DSS sandwich, and DSS tower.
DSS can be categorised into different types: model-driven DSS,
communication-driven DSS, data-driven DSS, document-driven
DSS, knowledge-driven DSS, and Web-based DSS.
Tools and technologies supporting DSS are ETL, OLAP, ROLAP,
MOLAP, HOLAP, and dialogue management.
Outsourcing involves contracting with outside consultants, software houses, or service bureaus to perform system analysis, programming, or other DSS-development activities.
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Online Transactional Processing (OLTP): It is a real-time processing business transaction with the help of the Web.
Client-server Technology: An application that divides tasks or
workload between the service providers (servers) and requesters to access the service (clients).
SQL: A standard computer language used for accessing and
manipulating databases.
Outsourcing: The contracting of non-core business processes
by an organisation to another organisation to reduce its cost
and use resources for other purposes.
Types of DSS
Tools and Technologies
Supporting DSS
DSS and Outsourcing
Group Decision Support
Systems
1.
2.
False
3.
Data-driven DSS
4.
5.
a.
6.
Dialogue management
Extraction, Transformation,
and Loading
Introducing Decision
Support System
Answers
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Topic
7.
True
8.
True
9.
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CASE STUDY
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10.3
10.4
10.5
Introduction
Define CRM
Self Assessment Questions
Activity
Components of CRM
Self Assessment Questions
Activity
Three Phases of CRM
Self Assessment Questions
Activity
Benefits and Challenges of CRM
Self Assessment Questions
Activity
New Trends in CRM
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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10.1
10.2
10.6
10.7
10.8
10.9
10.10
INTRODUCTORY CASELET
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SIA has changed the whole flight experience by focusing on creating customer value. In addition, regular training and development programmes of employees help in dealing with customers
in a better way.
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10.1 INTRODUCTION
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While taking a decision, an organisation needs to ensure that the decision should have a positive impact on its customers. If the customers
are not satisfied with the decision or if the decision puts a negative effect on the customers perception about the organisation, the survival
of the organisation in the long-run is difficult. This is because, in such
a case, customers start switching to other organisations for products
and services.
After realising the importance of customers, organisations started establishing a unique brand identity and providing excellent customer
service for grabbing customer attention. Organisations that were initially focused on earning high profits are now shifting their priority towards managing cordial relationships with their customers. For this,
organisations need to interact with customers regularly to understand
their needs, tastes, and preferences.
Customer Relationship Management (CRM) refers to a tool that enables an organisation to strengthen relationships with its customers.
It helps an organisation to identify the needs and expectations of customers and fulfil them. This helps in achieving a high level of customer satisfaction. In other words, CRM is a business strategy that
emphasises the retention of customers by meeting or exceeding their
expectations.
The chapter begins by explaining the concept of CRM in detail. Next,
it discusses the components of CRM. In addition, the chapter elaborates on the three phases of CRM. It also discusses the benefits and
challenges of CRM. In the end, the chapter explains the new trends in
CRM.
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DEFINITION
According to Gartner, CRM is a business strategy designed to optimise profitability, revenue, and customer satisfaction.
As per Price Waterhouse Cooper (PWC), CRM is a business strategy that aims to understand/appreciate, manage, and personalise the
needs of the organisations current and potential customers.
According to Jill Dyche, CRM is the infrastructure that enables the
delineation and increase in customer value and the correct means by
which to motivate valuable customers to remain loyal and buy again.
According to Paul Greenberg, CRM is a philosophy and a business
strategy, supported by a system and a technology, designed to improve
human interactions in a business environment.
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Using the Internet, identify a manufacturing organisation that derived benefits by implementing CRM systems.
CRM Software
Business Processes
Users
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ACTIVITY
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Using the Internet, identify the hardware and operating system requirements for implementing a Microsoft CRM system.
Most organisations implement CRM in phases. This is done to determine whether implementing CRM is beneficial for their organisation
or not. Generally, CRM is implemented in three phases, which are discussed as follows:
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Though CRM has so many benefits, all organisations are not able to
implement CRM and derive the required benefits. This is because of
the different challenges that an organisation needs to face while implementing a CRM system. Some of these challenges are shown in
Figure 10.2:
Lack of Guidance
Integration Problem
Inaccurate Data
Employee Problems
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Integration Problem: It occurs during the collaboration of different business processes of an organisation. All the business problems of an organisation cannot be solved by using a single CRM
application. Therefore, an organisation needs a customised CRM
application to solve its problems. In such a case, it becomes difficult for CRM vendors to integrate all the business processes of an
organisation and provide a single solution.
Inaccurate Data: A successful implementation of a CRM system
requires accurate data to get precise results. Any inaccuracy in
data may lead to incorrect conclusions.
Employee Problems: Employees are generally reluctant to adopt
change in their working style. Sometimes, employees think that
CRM is not beneficial for their success. This lack of support from
employees becomes a hurdle in a successful CRM implementation.
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SELF ASSESSMENT QUESTIONS
ACTIVITY
Using the Internet, find out a real-life example of CRM implementation failure. Also, identify the reasons for the same.
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c.
d. Social CRM
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10.7 SUMMARY
247
Mobile CRM is an application that allows remote employees to interact with customers and access and update their data, using mobile devices such as smart phones and tablets.
GCRM is a strategic application of processes and practices for
managing relationships between customers and organisations operating in multiple countries.
KEY WORDS
CRM: A strategy used by organisations for providing better services to its customers and increasing the level of customer satisfaction.
Social CRM: An application used by organisations to build
long-term relationships with their customers using social media
websites such as Facebook and Twitter.
Mobile CRM: An application adopted by organisations to connect and interact with its customers using mobile devices such
as smart phones and tablets.
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Global CRM: An application used by organisations to build relationships with customers located in different geographical areas.
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Components of
CRM
Three Phases of
CRM
Q.No.
Answers
1.
2.
3.
True
4.
Customer acquisition
5.
False
Topic
Benefits and
Challenges of
CRM
New Trends in
CRM
Q.No.
Answers
6.
True
7.
8.
b. CRM software
9.
True
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3. The three phases of CRM are acquire, retain, and develop. Refer
to section 10.6.
4. The new trends in CRM include Social CRM, Mobile CRM, and
Global CRM. Refer to section 10.8.
SUGGESTED READING
FOR REFERENCE
10.10
SUGGESTED READINGS
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CASE STUDY
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11
11.3
11.3.1
11.3.2
11.3.3
11.4
Introduction
Meaning of Supply Chain
Self Assessment Questions
Activity
Define SCM
Objectives of SCM
Components of SCM
Difference between Logistics Management and SCM
Self Assessment Questions
Activity
Scope of SCM
Self Assessment Questions
Activity
Benefits and Challenges of SCM
Self Assessment Questions
Activity
New Trends in SCM
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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11.1
11.2
11.5
11.6
11.7
11.8
11.9
11.10
INTRODUCTORY CASELET
WHIRLPOOL
Whirlpool brand is a household name associated with reliable
household appliances. However, its delivery performance dropped
in the year 2000 and was anything but reliable. The supply chain
was failing to meet expectations, inventory quantities were either
too low or too high, or they had the wrong items in inventory, or
they had the right inventory but delivered to the wrong place.
These inconsistencies were troubling their retail partners as well
as customers. It became clear to executive leadership that these
were supply chain management issues that had to be fixed. Many
of these problems that led to the crisis were a result of the companys geographic expansion and business acquisitions.
Due to these supply chain issues, the companys overall availability rate which measures, how often a product is in the right place
at the right time was only 83% in 2000. According to industry
standards, this was considered a dismal failure. The unfortunate
irony of the whole scenario was that availability was low even
while the total inventory levels were often too high. In terms of
supply chain management, Whirlpool was at a competitive disadvantage.
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(Source: http://www.usanfranonline.com/resources/supply-chain-management/supplychain-management-case-study-whirlpool/#.U66osWS6ZkQ)
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11.1 INTRODUCTION
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A supply chain is a network that involves the functions of procurement of raw materials, transformation of these raw materials into intermediate and finished products, and then lastly distribution of the
final products to customers. A supply chain is a combination of various facilities like supply, manufacturing, assembly, distribution and
logistics facilities. Supply chain exists in both manufacturing as well
as service sectors.
(supplier
selection,
optimal
procurement
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Supplier
Raw Materials
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Manufacturing
Distribution
Customer
Customer
(Source: http://organisations.weber.edu/sascm/)
Figure11.1 shows an example of a very simple supply chain. Raw material is procured from suppliers, transformed into finished goods in
a single step, and then transported to distribution centers, and ultimately, consumers. A realistic supply chain may have multiple end
products with shared components, facilities and capacities.
A simple supply chain consists of several elements that are linked by
the movement of products along it. They are as follows:
Customer: The customer is the first in the chain of events when he/
she decides to purchase a product that is being offered for sale by
an organisation. The customer comes in contact with the sales department of the organisation for placing the order for the selected
product. The sales manager enters the sales order for the required
quantity to be delivered on a specific date. If the requested product
has to be manufactured, the sales department forwards the order and
includes a request that needs to be fulfilled by the production facility.
Planning: The sales order containing the request for a product is
combined with other sales orders. At this stage all the sales order
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Transportation: This stage comes into the picture after the finished product arrives in the warehouse. The distribution department decides the most efficient method of transportation to deliver the products to the customers so that the goods are delivered on
or before the specified date in perfect condition. After the goods
are received by the customer, the organisation sends an invoice for
the delivered products to the customer for receiving the payment.
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ACTIVITY
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Supply Chain Management (SCM) is a specialised process that is implemented in organisations to ensure that their supply chain is efficient and cost-effective. As we saw in the previous section, supply
chain is the collection of steps that an organisation adopts to transform raw components into the final product. SCM is the combination
of art and science that go into improving the supply chain of the organisation by finding the raw components it needs to make a required
product or service and deliver it to customers.
There are two basic ideas behind the core concept of supply chain
management. The first idea is that behind every product that reaches an end user is a cumulative effort of multiple organisations. These
organisations form part of what is collectively referred as supply
chain. The second idea is that although supply chains have existed
since a long time, most of the organisations involved in it, have been
concerned about the processes that went on within their four walls.
Very few organisations understood, much less managed, the chain of
processes that were required to ultimately deliver the final products to
the customer. This resulted in ineffective and disjointed supply chains.
Thus, SCM is collective management of all supply chain activities to
achieve a singular target of optimising all the links in supply chain.
Organisations that are part of the supply chain must make a conscious
effort to develop and run supply chains in the most effective & efficient
ways possible. SCM activities encompass all the fields from product
development, sourcing, production, and logistics, to the information
system required to coordinate these activities. Thus SCM can also
be defined as the synchronisation of an organisations processes and
those of its suppliers to correlate the flow of materials, services, and
the information with customer demand. The organisations that are
part of a supply chain are linked together through physical processes and information process. Physical processes include manufacturing, movement, and storage of goods and materials. These processes
257
are more visible part of the supply chain. Then there are information processes which are not as visible but very important. These processes enable the supply chain partners to coordinate their long-term
plans, and to control day-to-day flow of goods and material through
the supply chain.
11.3.1
OBJECTIVES OF SCM
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A well designed supply chain is expected to perform with the following strategic objectives:1. To maximise overall value generated
2. To look for sources of revenue and cost
258
COMPONENTS OF SCM
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Sourcing
Making
Delivering
Return
Planning
259
suppliers. SCM managers must ensure that the vendors supply the
inventory as per the demand and keep a check on the quality of
the material supplied. They should also verify shipments, transfer
them to the manufacturing department and authorise their payments.
Making: This step involves manufacturing of the required product
from the procured raw material. During this step, the supply chain
managers schedule and manage the activities associated with production, testing the end product, packaging it and preparing it for
delivery to the customer. Organisations can measure the product
quality levels, production output and worker productivity during
this step.
Delivering: This step involves selecting an efficient channel for
delivering the finished goods stored in the warehouses to the customers. An efficient distribution system is required for performing this step. The distribution has to be carried out as soon as the
product is manufactured and ready in the warehouse. This step
also involves preparation of an invoice for delivered a good to receive payments from the customers.
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Return: This step involves that phase of the supply chain where
the organisation receives defective and excess products back from
customers. This phase of the supply chain has to be implemented
carefully and efficiently so as not to affect the relations with the
customers. A responsive and flexible network has to be in place
to handle this situation of defective goods as it can sometimes be
problematic part of the supply chain for many organisations.
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11.3.3
activities with the primary objective of creating net profit and leveraging worldwide logistics. Logistics can be considered as managing the
flow of goods and services between the point of origin and the point of
consumption to meet the requirements and specifications of customers. Logistics management is also referred by names such as materials
management, channel management or distribution management.
Figure 11.3 shows the differences between logistics management and
supply chain management
Logistics
Purchasing
Distribution
Firm
Customer
Supplier
Production
Purchasing
Supplier
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Supply Chain
Production
Focus Corp.
Distribution
Customer
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ACTIVITY
Take a case study of a big business organisation and study the difference in its logistics and supply chain departments. Present your
findings in a short note.
262
Logistics and supply chain throws career prospects and renders ample amount of jobs. Currently, supply chain softwares are very popular. Inventory management is also a part of the supply chain network
and is used to protect the production system from any kind of disturbance. It also helps to prevent the organisation from running out of
stocks, goods and materials. It basically focuses on managing asset
management, visibility of inventory, forecasting inventory, inventory
valuation, carrying cost of inventories, replenishing lead time, physical inventory, management of future asset prices, return of damaged
goods, accommodating and demand forecasting of physical inventory.
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a. location
b. Production
c.
Inventory
d. All of these
ACTIVITY
Reduced Costs: With the help of SCM a defective process, one that
increases the cost without increasing the value of the final product, is easy to identify. These processes are wasteful and do not add
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CHALLENGES:
The key challenges faced by an organisation in the supply chain management are as follows:
Customer service: Customer is the key in the supply chain. Supply chain management is called effective if it delivers the right
product in the right quantity in the right condition with the right
documentation to the right place at the right time and at the right
price to the customer. Thus the major challenge is to overcome
these factors and rectify any problem arising at any of these stages
and ensure smooth supply chain in the organisation.
Planning and Risk Management: Business world keeps changing
everyday. There are new product launches, global sourcing, new
acquisitions, changing credit availability, the need to protect intellectual property, etc., that supply chains must be planned accordingly and evaluated regularly to incorporate these changes and,
if required, redesigned. Supply chain risk must be identified and
quantified.
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Talent: Supply chain managers must have a thorough understanding of the key skills needed for supply chain management roles. To
keep abreast with latest trends and updates in the supply chain
requires job qualifications, methods for developing future talent
and leaders, and the ability to efficiently source specific skill sets.
SELF ASSESSMENT QUESTIONS
ACTIVITY
265
There are six key trends that are creating significant impact on supply
chain design and performance as depicted in Figure 11.4.
Demand
planning
Closer
integration
and
collaboration
with
suppliers
Globalisation
Trends
in SCM
Shortened
and more
complex
product life
cycles
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Increased
competition
and price
pressures
Outsourcing
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Shortened and more complex product life cycles: There is always a demand and pressure on business organisations to develop
new innovative products and float them in the market frequently
without affecting the market of existing products, which are still
in high demand. In order to meet this growing demand from both
customers and consumers sides, organisations require a more efficient product lifecycle management processes. An effective product lifecycle management process would lay emphasis on managing new product introduction, discontinuation of product, design
for manufacturability and leveraging across their entire product
and infrastructure characteristics.
Closer integration and collaboration with suppliers: Many organisations are moving towards more intense collaboration between stakeholders' customers and suppliers for the extended
supply chain. The collaboration is carried out to increase the exposure of an organisation throughout the supply chain to make
better management decisions and decrease supply chain costs in
return. Collaboration enables key people associated with key processes throughout the supply chain to update themselves with the
information required to make critical business decisions with the
best available information.
SELF ASSESSMENT QUESTIONS
ACTIVITY
267
11.7 SUMMARY
A supply chain is a system or network of facilities in which people, activities, information and resources are involved to enable
a smooth movement of a product or service from supplier to customer.
Supply Chain Management (SCM) is a specialised process that is
implemented in organisations to ensure that their supply chain is
efficient and cost-effective.
The primary objective of every supply chain is to maximise the
overall value generated by the system.
There are five basic components of SCM; planning, sourcing, making, delivery, return.
Supply chain management and logistics are two functional areas
in an organisation that often seems to overlap.
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There are six key trends that are creating significant impact on
supply chain design and performance: demand planning, globalisation, increased competition and price pressures, outsourcing,
shortened and more complex product life cycles, closer integration
and collaboration with suppliers.
KEY WORDS
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Q.No.
Answers
1.
Manufacturing, service
2.
True
3.
4.
materials , channel
5.
False
Scope of SCM
6.
7.
True
8.
outsourcing
Define SCM
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SUGGESTED READINGS
E-REFERENCES
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CASE STUDY
DELOITTE
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Deloitte, a division of an international engineering group, specialises in medical devices. Its market was becoming much
more demanding and its competitors were raising their game.
This led to highlighting shortfalls in its performance. The current shape of Deloitte has largely formed through acquisitions.
Thus, many of its processes are fragmented, wherein each product line is treated as a mini-business. Although this has some
advantages, it becomes difficult to co-ordinate customer handling or to reduce costs by sharing back-office systems. The
company also recognised that it was carrying too much inventory and yet it was missing its delivery targets. Each of business units was trying to improve its own performance individually but as a whole little wholesale progress was being made.
Supply chain division was initiated and geared to find short-term
inventory reductions and service improvements that could be
generated from the supply chain within its existing framework
of disparate IT support systems. The Deloitte division was not
willing to invest in technology without understanding what was
wrong with its existing processes and what advantages the new
integrated technology would bring. The main focus was on stabilising and standardising the processes across the entire business.
Analysis of root cause with acknowledged delays and problems
along both the internal and external supply chain was carried out.
For the first time, the entire operation was examined, across four
European countries and the USA as a whole. Alternative manufacturing and replenishment models were looked at and the outcome projected in terms of inventory reduction and impact on
service levels. Better adherence to demand-focused production
schedules meant that expediting costs could also serve as cut.
With more accurate planning, sea-freight could replace air-freight
and a better rate of on-time delivery could still be achieved.
Operational improvements to warehousing were also suggested,
which was outsourced to a third-party, but not performing well.
A detailed action plan to improve response to customers was also
developed. By implementing these recommendations, the division made real progress in following areas:
Customer service: levels are expected to rise significantly
from their current range of 86%-95% to a consistent 98.5%,
with a corresponding financial benefit in reduced cost of lost
sales running into several millions pounds.
Lead- times: stock replenishment lead-times for sales affiliates are expected to be cut by up to 75%.
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CASE STUDY
QUESTIONS
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12
12.3
12.4
12.4.1
12.4.2
12.4.3
12.4.4
Introduction
Architecture of an Information System
Self Assessment Questions
Activity
Software Development Lifecycle
Self Assessment Questions
Activity
Software Development Models
Waterfall model
Prototype model
Incremental model
Spiral model
Self Assessment Questions
Activity
Requirement Analysis & Design Considerations
Self Assessment Questions
Activity
Software Testing
Self Assessment Questions
Activity
Deploying an Information System
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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12.1
12.2
12.5
12.6
12.7
12.8
12.9
12.10
12.11
INTRODUCTORY CASELET
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Keeping up with reduced distribution times of rival organisations was tough and customer service enhancement was also
very difficult.
Legacy systems of the client were proving to be a big problem
in the synchronisation of its operations with market fluctuations.
As the customer is in an extremely short life-cycle industry,
the delivery time must be improved while keeping inventory
levels and costs low.
The client was running its business on distinct systems. It was
using a large number of satellite systems that were not integrated with the host system.
Company was operating on disparate systems which increased
the complexity, as there were many satellite systems running
independent of the host.
The Infosys team had a very big challenge to integrate the new
system with the satellite systems and put all new processes in
place in a very short time period.
INTRODUCTORY CASELET
Infosys used its proprietary IntERPrize methodology, strong Oracle Applications consulting and a unique global delivery model
to overcome all the challenges. It set about to integrate Oracle
ERP with custom applications for helping the client improve their
business processes. Infosys had to perform the following tasks:
Evaluation and implementation of Warehouse Management
System (WMS) / Transport Management System (TMS) solution.
Standardisation of performance metrics across the organisation to streamline the clients internal processes. Infosys was
involved in business process definition, programmes management, project management, package evaluation, package implementation, key user training and post-production support.
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The cash flow has improved significantly due to real-time processes. A large number of processes have been automated,
which led to increasing efficiency and reduced overhead costs.
The clients on-time delivery record improved due to processes and applications implemented by infosys.
The understanding of business processes improved after the
implementation, which led to continuous incremental changes.
A WMS/TMS package was modified along with an online analytical processing (OLAP) tool, resulting in an improved integrated system.
(Source: http://www.infosys.com/industries/high-technology/case-studies/Pages/oracle-implementation-global.aspx)
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LEARNING OBJECTIVES
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12.1 INTRODUCTION
Have you ever booked a movie ticket online? How do you get so much
information about movies such as show timings, ticket price, theatres
at one place? All this is possible due to the information system managed by the organisations. They build an information system and provided it`s access to users. Now, you can reserve your seats for movies at a theater anytime. However, this puts forth another question
that how we are able to access all the information so easily by using
some organisations information system. This is because the organisation have deployed their service on a server which is a computer
programmes that provides services to other computer programmess.
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The chapter starts by discussing the architecture of information systems. Next, it defines the software development life cycle. Further, it
explains the software development models such as the waterfall model, prototype model, incremental model and the spiral model. Further
ahead, it discusses the requirement analysis and design considerations. In addition, it explains the software testing. The chapter concludes by explaining the process of deploying an information system.
12.2
ARCHITECTURE OF AN
INFORMATION SYSTEM
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Information system architecture determines data to be stored, functions of the system, location of the components, timing of activities
and events occurring in the system, and the essence of the system.
Let us explore some basic components of information system architecture:
277
Art and Science: Science is playing an important role in identifying the user need by analysing their behaviours and patterns.
This is useful to improve the information system but we should
also rely on experience, intuition and creativity to determine users requirements. This is considered the art of information system
architecture.
SELF ASSESSMENT QUESTIONS
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Requirement
gathering and
analysis
Design
Implementation
or coding
Testing
Deployment
Maintenance
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BENEFITS OF THE SDLC PROCESS
The SDLC improves the quality of a product by making it cost-efficient, effective and productivity.
AT the end of each stage a proper review is created that allows
maximum management control.
It helps in creating detailed system documentation.
This documentation helps in assuring that system requirements
can be traced back to specified needs of organisation.
The products can be reviewed to check whether they conform to
users requirements of not. Further changes can be made if the
product is not as per the requirements to meet the customer requirements.
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a. Testing
b. Documentation
c. Deployment
d. Design
ACTIVITY
er requirements. Software development models are used for organising and creating documentation of the structure and flow of the data
through a systematic process.
Software development process has changed with the time by incorporating additional definitions, process models, structures and approaches to software development activity.
12.4.1
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Requirements
Design
Implementation
Verification
Maintenance
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S
ADVANTAGES OF WATERFALL MODEL:
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12.4.2
PROTOTYPE MODEL
Waterfall model does not deliver a working model until a late stage.
Therefore, you cannot detect any severe error at an early stage. The
solution to this problem is to develop a working prototype with the
available requirement details. This prototype is shown to the customer to get feedback. If the customer approves the prototype only then
the actual product is developed else the prototype is discarded and
another prototype is made. A prototype is very fundamental version
of product with very basic and limited features.
282
Quick plan
Communication
Modeling
Quick design
Deployment
Delivery
& Feedback
Construction
of prototype
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ADVANTAGES OF PROTOTYPE MODEL:
12.4.3
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Figure 12.4 shows the example of Incremental model in software development. In this model, we add pieces to the module one by one
while keeping in mind that each piece is complete in itself. Therefore,
we keep adding pieces until we obtain the final product.
283
Testing
Implementation
Design &
Development
Testing
Implementation
Testing
Implementation
Build 2
Requirements
Build N
Design &
Development
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SPIRAL MODEL
The spiral model can be described as the combination of linear sequential and iterative approach used for the software development
process. In the spiral model, software development is done in a series of developed builds. In initial stage iterations, the build or module
could be a prototype. A more complete version of the software is produced in the later stages.
NMIMS Global Access - School for Continuing Education
In spiral model the following steps are involved for each phase:
Setting goals and objectives: It refers to setting up of goals, alternatives and constraints.
Estimating risks: It specifies key risks identified and steps for risk
reduction.
Developing and validating: It specifies the selection of an appropriate development model.
Planning: It specifies the review of project and in this stage decision is made to move to the next stage or not.
Risk Analysis
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Planning
The objectives and prototype are refined during the phase execution.
Risk management and identification gets more precise. Therefore,
product planning becomes productive and quality oriented.
Figure 12.6 depicts a spiral model:
Requirements
Gathering
Risk Analysis
Prototyping
ost
Project C
Coding
Customer
Evaluation
Evaluation
Testing
Engineering
It contains a big amount of risk analysis, thus the risks are avoided.
It is beneficial for large projects.
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a. waterfall model
b. prototype model
c. spiral model
d. incremental model
286
ACTIVITY
Differentiate between waterfall model and prototype model. Present the points in a short note.
12.5
Requirement
Analysis
Requirements
Elicitation
Requirement
Management
Change
Management
Requirements
Attributes
Requirements
Specification
Requirements
Tracing
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Requirements
Validation
(Source: http://www.prim.osd.mil/cap/req-analysis-def.html?p=1.1.7.1)
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S
DESIGN CONSIDERATIONS
Software requirement analysis (SRA) usually results in a specification. We use design to develop a working system from this specification. There are various types of software design. Therefore, there are
many factors that need to be considered while designing a software
module. These factors are:
Compatibility: Software compatible to the older products. It also
means it is able to work with other products that are designed to
operate with another product. For example, Microsoft Office 2010
is backward-compatible with older version of itself which is Microsoft Office 2007.
Extensibility: One should be able to add new features in software
without making many changes to the existing software. For example, you can add extra features to your web browser by adding
plugin or extension software. Popular example of these types of
software is adobe flash player.
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Maintainability : The software is able to be restored to a particular condition within a specified period of time. For example, antivirus software updates its definition of virus, to maintain the effectiveness of software.
Modularity: The software includes independent components
which could be implemented and tested in isolation which is better for software maintainability. Then the components can be integrated together to form a desired software system. This enables
us to divide work in a software development project. For example,
accounting software can be divided in different components such
as financial, tax, management and audit. All these components can
be developed and tested separately and then integrated together
to form a complete software.
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ACTIVITY
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List the benefits of requirement and analysis. You can take the help
of the Internet for any related searches.
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Acceptance testing: It is done to check the acceptability of the system. The goal of this test is to examine the systems compatibility
with the business requirements and evaluate whether it is acceptable for delivery or not.
Alpha testing: Alpha testing is performed at developers site. It is
a testing of an application that is almost complete but still minor
changes can be made if needed.
Beta testing: This testing is typically done by end-users. It is the
final testing before an application is released for commercial use.
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ACTIVITY
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ACTIVITY
Utilising the Internet find out about the deployment of the information system in an organisation.
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12.8 SUMMARY
Information system architecture defines the business processes
rules, systems structure, technical framework, and product technologies for organisational information system.
The architecture of the information system includes the hardware
and software used to provide the solution to the end users of the
services.
Software development life cycle (SDLC) models consist of phases
of the software development and the execution order of these
phases.
Different types of software development model are Waterfall model, Prototype model, Incremental model and Spiral model
Requirement analysis consists of four types of activity Requirement Elicitation, Requirement Analysis, Requirement Specification and Requirement Validation.
The factors which need to be considered while designing a software model are compatibile, extensibility, fault tolerance, maintainability, modularity, packaging, reliability, reusability, robustness, security and usability.
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KEY WORDS
Architecture of an
Information System
Software Development
Lifecycle
1.
design, contents
2.
False
3.
b. Documentation
4.
SRS
5.
waterfall
6.
d. incremental model
7.
prototype
Software Development
Models
Answers
Q.No.
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Topic
Deploying an Information
System
8.
True
9.
analysis, definition
10.
Fit/Gap
11.
12.
13.
Deployment, maintenance
14.
True
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SUGGESTED READINGS
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Bibliography: Perry, W. (2006). Effective methods for software testing. 1st ed. Indianapolis, IN: Wiley.
Bibliography: Mishra, J. and Mohanty, A. (2012). Software engineering. 1st ed. New Delhi, India: Dorling Kindersley.
E-REFERENCES
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13
13.3
13.4
13.5
Introduction
Infrastructure Management
Self Assessment Questions
Activity
Maintenance of Information Systems
Self Assessment Questions
Activity
Management of Changing Requirements
Self Assessment Questions
Activity
Incidence/Incident Handling
Self Assessment Questions
Activity
Disaster Recovery and Business Continuity Planning
Self Assessment Questions
Activity
Summary
Descriptive Questions
Answers and Hints
Suggested Reading for Reference
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13.1
13.2
13.6
13.7
13.8
13.9
13.10
INTRODUCTORY CASELET
Croston did not wait for the companys infrastructure to be overwhelmed before making call to HP. He was not prepared to risk a
moments downtime.
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The companys response team relocated to the HP Recovery Center, 20 minutes from the head office, making ready 25 seats in a
dedicated closed dealing room, available as part of Goodbodys
Business Continuity contract.An additional 42 seats were assigned to general operations staff. After two hours, dealing operations were up and running just three hours after the initial call.
The remainder of the business was on-stream within four hours.
Those not transferred to the HP Recovery Center were asked to
work at home via remote access, while a reduced team operated
from the main site. The head office was fully operational within
ten days
(Source:http://h20195.www2.hp.com/v2/GetPDF.aspx%2F4AA2-8148ENW.pdf. )
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LEARNING OBJECTIVES
>
>
>
>
>
13.1 INTRODUCTION
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Thereafter the chapter discusses management of changing requirements. Next, it explains incident handling. Towards the end, disaster
recovery and business continuity planning have been discussed.
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Hardware
Human
Resources
Software
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Information
System
Infrastructure
Communication
and
Collaboration
Services
Facilities
Data and
Knowledge
DEFINITION
Infrastructure is different for different sectors of the business enterprise. For some enterprises, infrastructure might refer to interconnecting hardware and software and not necessarily to computers and
other interconnected devices only. However, for other organisations
information technology enterprise, infrastructure might be viewed as
all those devices that support the flow and processing of information.
The Internet, infrastructure is considered to be the physical hardware
that is used to interconnect computers and users. It includes the transmission media, like telephone lines, cable television lines, satellites,
antennas, as well as routers, aggregators, repeaters, and other devices
that control transmission paths. Software needed to send, receive and
manage the transmission signals is also included in infrastructure.
Systems
Management
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Network
Management
Storage
Management
Systems management: The management of the information technology systems in an organisation is referred to as systems management. Systems management starts with collecting requirements, procuring equipment and software according to it and then
distributing it to where it is required. It also includes configuring
the equipment with the latest software, maintaining it, enhancing
it with service updates etc. System management incorporates a
problem-handling process and ensures the objectives of organisation as a whole is being met. The systems management department
is often referred to as management information systems (MIS) or
simply information systems (IS).
Network management: Networking basically refers to construction, design, and use of a network, with respect to information
technology. Networking includes the components required for
setting up a network like cabling, hub, bridge, switch, router etc.
telecommunication protocol and software for implementing and
managing the network. It also includes establishing operational
policies and procedures required for the smooth network. Network
management encompasses activities, methods and procedures,
and tools that are associated with the operation, administration,
maintenance and provisioning of networked systems.
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Along with basic infrastructure, businesses rely majorly on information systems infrastructure for decision making and business processes, and for formulating competitive strategy. Business processes are
the actions that an organisation has to perform to reach their business
goals. Most of the organisations business processes are dependent on
their information systems infrastructure although at different degrees.
Organisations management require an infrastructure management to
support a variety of activities. Reliable communication networks are
needed to support collaboration between suppliers and customers, accurate and timely data and knowledge is required to gain business intelligence, and information systems is needed to aid decision making
and support business processes. These are all part of infrastructure
management.
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SELF ASSESSMENT QUESTIONS
Resources management
d. Storage management
2. Networking basically refers to ________, _________ and use of
a network, with respect to information technology.
ACTIVITY
13.3
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Study the infrastructure of a business enterprise and see how infrastructure management helps in the growth of an organisation. You
can take the help of Internet for any related searches.
MAINTENANCE OF
INFORMATION SYSTEMS
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Depending on the effect each has on an organisation's information strategy plan, system maintenance can be categorised into four
groups. These are shown in Figure 13.3:
Corrective Maintenance
Customised Maintenance
Enhancement Maintenance
Preventive Maintenance
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Enhancement Maintenance: Enhancement maintenance pertains to enhancing or improving the performance of the system.
This is done either by adding new features to the system or by
changing existing ones, like, conversion of text-based systems to
Graphical User Interface (GUI).
Preventive Maintenance: Preventive Maintenance is regarded
as one of the most cost effective of all. If performed timely and
properly, preventive maintenance can avoid major problems in the
system, like the Y2K bug, also called Year 2000 bug or Millennium Bug. It was a problem in the coding of computerised systems
that were projected to create havoc in computers and computer
networks around the world at the beginning of the year 2000 (in
metric measurements K stands for thousand). Due to preventive
measures taken well in advance in the beginning of 1999, like programming corrections, very few major failures occurred in the
transition from December 31, 1999, to January 1, 2000.
Information systems that are in operation must be maintained regularly. As we know by now, maintenance of information system is a
continuous process of making required changes and modifying the
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Obtaining maintenance requests: A maintenance request is obtained in case a problem arises in the system.
Transforming requests into changes: The problem behind the
request is identified, analysed and according to it a plan is developed.
Designing changes: The required changes according to the plan
are designed.
Implementing changes: The designed changes are incorporated
in the system.
MAINTENANCE COSTS
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ACTIVITY
13.4
MANAGEMENT OF CHANGING
REQUIREMENTS
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Requirements change continuously throughout the software development lifecycle. Since requirements specification is a dynamic process,
it usually does not cease until the end of the product implementation.
The number and type of changes required might decrease towards the
later stages of the project design, but the changes never entirely stop
until product release and after. It is practically impossible to freeze the
user requirements at an early point in the development process. Implementing and managing changes in a systematic and planned manner is crucial to the success of any project.
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Assign responsibilities
Manage changes
Document rationale
Trace requirements
Communicate the change
Establish baselines
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There are numerous relationships that exist between requirements, design, components and others. It is critical to manage these
relationships to be able to provide a comprehensive requirements
management capability for supporting the system engineering life
cycle. When the requirements change, its impact should be studied on the analysis, as well as the design model. After determining
the impact of changes the updates to the project schedule should
take place. A decision making structure should review the changes
and determine what to do to incorporate the required changes.
Every step must have a test case associated with it. The entire system should be tested before implementation. Although testing is
often considered as boring, tiresome activity by many developers,
however lack of testing is one of the major factors in failed and in
trouble projects.
Communicate the change: Any change in requirements must be
communicated to the entire team involved in the process. Changes
to the requirements specification that have not been communicated to the entire group lead to troubled system. Communications
failures typically occur when system developers either drop a feature or change a performance requirement without telling the rest
of the team. Thus to avoid this an automated email-notification
system that offers instantaneous team communication will prove
to be beneficial and all affected parties are notified of the change
in a timely manner.
Establish Baselines: Once the requirements changes specifications have been verified and all the reviews are completed successfully then it will be approved by the customer and then it is ready
to be baselined. Baseline is the tested version of a set of requirements that represent a required system. It serves as the basis for
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Create a small software project on your college and study the impact of changing requirements on it at every stage of its development.
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Preparation
Identification of Attack
Containment of Attack
Recovery and Analysis
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analysis of the attack. The questions like- why did it happen? Was
it dealt with promptly and properly? Could it have been handled
better? - have to be answered. The analysis phase helps the users
and administrators to determine the reason behind the attack and
the best course of action to be taken to protect against such future
attacks.
INCIDENT HANDLING - VIRUSES
Preparation: System viruses, as we all know, can cause irreparable harm to important files and records. Small office users and
home users are relatively at higher risk than larger organisations
because these users usually work on one computer or store their
important data in a single location. In a larger organisation, data
is usually spread across many systems in several locations Thus a
virus outbreak in a home or small office can permanently destroy
important data. Therefore creating backups of all data is very crucial for any organisation. In addition to that backup disks must be
kept in a separate location, away from the computer, to ensure that
in case of an incident like fire or theft of hardware, a backup copy
of all data is still available.
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The second very crucial step in preparing for a virus attack is to install anti-virus software. A number of anti-virus software are easily
available, easy to install and operate and are affordable. New viruses are created frequently, so users must update their anti-virus
software on a regular basis.
Identification of Virus Attack: Viruses are very potent and frightening since they spread very quickly to 'friendly' computers. Early
identification of an incident of a virus attack is crucial to ensure
that the virus does not spread to other computers. It is also important that users be familiar with the symptoms of a virus attack.
They might range from mass e-mailing file destruction to other
malevolent actions the results of which can be seen as an immediate effect. Scheduling the anti-virus software to do real-time scanning of files and to periodically perform complete system scans
helps in both preventing and identifying viruses.
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Recovery and Analysis: Viruses can cause a varying degree of destruction- some viruses exist merely to replicate;others attach to
and destroy files and programs. Generally, anti-virus software can
restore files to their original state, but there are exceptions.Once
the systems have returned to their full operation, analysis should
be done to determine where it failed. Is it due to faulty anti-virus
software, or due to the frequency and reliability of updates? Was
opening files from an unknown or untrusted source- allowing the
system to become infected? Once the attack was identified, were
appropriate and sufficient steps taken to minimise the damage
that the system sustained? Thus analysing the incident enables
the user to learn from the incident and ensure that it does not happen again.
SYSTEM COMPROMISE
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c. Both of them
b. System compromise
d. None of them
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ACTIVITY
13.6
Disaster recovery and business continuity planning are both mechanisms that enable organisations to be ready for any kind of unforeseen
events that might disrupt their normal functioningwhether it is a
hurricane or a simple power outage due to a digging in the basement.
The role of management in this scenario would range from inspecting
the plan, to furnish input and support, to help implementing the plan
into action during an emergency.
Typically, disaster recovery refers to the distinct steps that are undertaken to bring the organisation back to its normal operation in case
of any calamitous natural disaster or a national emergency. During
this time, in the case of information technology, the steps for disaster
recovery would involve restoration of servers or mainframes with the
help of backups, re-establishment of private branch exchanges (PBX)
and gear up the local area networks (LANs) to be able to meet basic
and immediate business requirements.
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DIFFERENCE BETWEEN DISASTER RECOVERY
AND BUSINESS CONTINUITY PLANNING
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Despite this difference, the two terms are interconnected and come
under a single acronym, BC/DR, because of their many common considerations.
SELF ASSESSMENT QUESTIONS
ACTIVITY
13.7 SUMMARY
Infrastructure Management (IM), from the perspective of an organisations information system, is defined as the management
of essential operation components, such as organisation policies,
processes, equipment, data, human resources and external contacts, for overall effectiveness.
NMIMS Global Access - School for Continuing Education
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KEY WORDS
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Q.No.
Infrastructure
Management
Answers
1.
C, resources management
2.
construction, design,
3.
true
4.
hardware
Management of Changing
Requirements
5.
False
Incidence/ Incident
Handling
6.
7.
True
8.
Disaster recovery
Maintenance of
Information Systems
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Handling, A. (2014). An Introduction to Incident Handling | Symantec Connect. [online] Symantec.com. Available at: http://www.symantec.com/connect/articles/introduction-incident-handling.
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14
CASE STUDIES
CONTENTS
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Case Study 1
Case Study 2
Case Study 3
Case Study 4
Case Study 5
Case Study 6
Case Study 7
Case Study 8
Case Study 9
Case Study 10
Case Study 11
Case Study 12
CASE STUDY 1
Although the company was progressing rapidly but it experienced a number of obstacles that were affecting profits badly. The company launched a new range of notebook computers, but due to quality problems and insufficient production
planning company had to stop selling for a year. Profit was
decreasing and the company was in serious problem. The
management was worried about decreasing revenue and it
had to take a major step to overcome the situation. The management decided to implement information processing tools
in the company. Information processing is the analysis and
organisation of data. It is widely used in areas such as business, engineering and science where computers are used.
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CASE STUDY 1
internet company can find out trends and strategies of competitors. The organisation can analyse the trends and strategies used
by other companies and formulate an appropriate strategy. Dell
also implemented inventory control systems. Inventory control
systems are the primary and essential need of the individual businesses. Dell used the up to date inventory control system which
prevented many problems to arise. This inventory control system
ensures that anything requested by the customer will always be
available to them at any point of time. Dell received numerous
benefits from the information system. The system enables the
company to strategise and conquers any problems and threats
from competitors. The system also helps the company in analysing and processing the required information.
(Source: http://www.mbaknol.com/management-information-systems/
case-study-management-information-system-at-dell/)
QUESTIONS
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CASE STUDY 2
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After an intense discussion on the situation, the management decided to computerise the entire system. Soon they implemented a
fully computer based information system to manage the business
effectively. Now, a waiter takes the order from customers and then
enters the order in an online system through the six computers
located in the restaurant dining room. The order is transferred
to a printer. Every printer is assigned a different task to manage
orders efficiently without any confusion. If a customer orders
salad, the order goes to the cold item printer. Likewise, if a customer orders a hot item such as pizza then the order goes to the
hot item printer. Similarly, order for drink is sent to bar printer.
Customers bill is automatically generated by the system. Also,
incase food items in the kitchen are going to be out of stock then
the head chef sends out the out of stock message. This message
is displayed on the computer systems in the dining area which
notify the waiters about the availability of a particular food item.
This makes the process faster and enables waiters to give better
service to customers.
Other significant benefits of the system help management to plan
and control their business. The system provides minute-by-minute information on the food items ordered and helps management
to decide which item is selling the most to make menus according
to the customers taste. The system also helps in controlling cost
by comparing the weekly sales totals with food costs.
(Source: http://www.mbaknol.com/management-information-systems/case-study-on-misinformation-system-in-restaurant/)
CASE STUDY 2
QUESTIONS
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CASE STUDY 3
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To start with, eBay introduced several crucial innovations tailor-made for the Internet at the business level, a strategy which
was conceived to be an improvisation. The online auction business model is the forte of eBay which served as the facilitator of
trade between a buyer and a seller in a highly individualistic manner. This model developed by eBay proved to be an important
extension of e-commerce. It offered millions of buyers a low-cost
opportunity to engage in a new type of economic activity.
CASE STUDY 3
QUESTIONS
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CASE STUDY 4
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Since Tong Yang was rapidly expanding its business, so was the
volume of data increasing at a rate of 30-40GB on average per
month. The performance of the database began to suffer and
there were many user-related issues that began to increase. Tong
Yang Group decided to address these problems, because 80% of
its business revenue is generated from overseas orders. It became
crucial to adopt a more robust and reliable database management
solution to enhance database performance to satisfy the demands
of global expansion as well as meet the requirements of the users.
The challenges that Tong Yang faced was firstly, to maintain the
reliability and speed of performance while downsizing the space
occupied by its large database in order to lower the cost of its
storage equipment; secondly, to avoid any disruption to their normal operations or loss of orders during the transition to the new
system.
Tong Yang tied up with consultant, AdvancedTEK International,
to undertake a detailed evaluation of new storage hardware and
Information Management (IM) software. There were four major
criteria which needed special attention:
system reliability
cost saving
ease of management
ease of expansion.
Both decided that archiving technology offered by the HP Database Archiving software was a cost-effective and efficient solution
for the above problems. Not only would it enhance the perfor-
CASE STUDY 4
mance of the database, it would also reduce the high cost associated with increase in storage space.
HP Database Archiving software provides high-speed search
and retrieval of database information without adversely affecting
critical business processes. It supports large-scale and complex
databases and can handle voluminous data with integrity and
consistency. In addition, it retains data for long terms to meet
industry-specific regulations. Infrastructure costs are controlled
because of not having to invest in costly hardware and constant
server upgrades to accommodate the high storage requirement.
The HP Database Archiving software also helps reduce the size
of the primary production database. Historical data is stored in
a secondary, online archive database which reduces the load of
retaining a large volume of historical data online in production
databases. Simultaneous access to production and archived data
through is still achieved by using Combined Reporting application. Thus the performance of the application software that manages the on-going growth of data is enhanced and better managed.
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QUESTIONS
CASE STUDY 5
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This case study discusses about Air Asias use of information system
in business. It is with respect to Chapter 5 of the book.
CASE STUDY 5
QUESTIONS
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CASE STUDY 6
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However, the subsidiary is not able to handle the market fluctuations and change in customers needs and preferences due to lack
of flexibility. As a result, it is not able to deliver the products on
time to the customers. Naturally, there was a need of implementing a robust business process to move ahead of the competitors,
reduce overhead costs and improve cash flow. From the perspective of technology, the various existing systems that were built on
heterogeneous technology platforms needed to be integrated.
CASE STUDY 6
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(Source: http://www.infosys.com/industries/high-technology/case-studies/Pages/oracle-implementation-global.aspx)
QUESTIONS
CASE STUDY 7
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CASE STUDY 7
QUESTIONS
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CASE STUDY 8
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Target and Kmart are the biggest rivals of the Walmart and were
founded in the same year. In the beginning the rival companies
expanded rapidly while the growth of Walmart comparatively
slower. The situation changed when Walmarts shares began trading on the New York Stock Exchange in 1972. Since then Walmart
opened 276 stores in 11 states by the end of 1970s. Apart from
this, the information systems used by the company played a huge
role in its growth.
The Walmart uses its information system to obtain the most current information about the customer requirements, best ideas
from employees, and sharing useful information with the employees. Information technology is also an essential part of Walmarts
success. It incorporates a fully computerised system that recognises each sold item, finds its right price in the database, creates an
accurate sales receipt for the customer, and stores sales information to record inventory and analyse sales. The company avoids
overstocking the inventory if the item is selling slowly. Walmarts
inventory and distribution system are considered one of the best
in the world. The company has invested more than $600 million in
its information systems.
The company deals with a huge amount of data on a daily basis. Therefore, it needed a technique to extract useful information from the large amount of data. Walmart uses data mining
for mining its enormous data to get useful information under all
sorts of changing environmental conditions. Data mining helps
the organisations to identify hidden pattern in a group and discover unknown relationship in the data. It protects a retailer from
the situations such as too much inventory and not enough inventories. For example, the companys data mining efforts informed
the buyers that during the time of predicted hurricane customers
CASE STUDY 8
QUESTIONS
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CASE STUDY 9
CRM AT TITAN
This Case study deals with the application of CRM at Titan. It is
with respect to Chapter 10 of the book.
Titan Industries, established in 1984, the leading manufacturers
of wrist watch in India. When Titan entered the market, it was
considered to be a novice in the field of watches. At that time,
HMT had huge market share. However, HMT targeted only upper
middle and higher classes of the society. Titan adopted the concept of classy showrooms and fashionable franchises by targeting
all classes of the society. As a result, it emerged as a market leader
in a short period of time. Since then, Titan has been following
the philosophy of creating a positive experience for customers by
providing them quality after sales services.
Influential
personality
Responsiveness
Sound product
knowledge
Personnel
Capabilities
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The aftersales services of Titan are based on 3Rs, which are discussed these 3Rs as follows:
Repair the hurt feelings of customers: Implies that the organisation strives to handle customer complaints with utmost
priority and care through quality interaction. For this, Titan
takes into account the following aspects:
Recruiting the right front-line personnel and training
them to provide excellent customer service, improving the
customer interaction process, enhancing operational parameters, and maintaining world-class ambience at showrooms. It is done by considering various aspects, which are
shown in the following table:
Welcoming
customers
Operational
Parameters
Measuring the
performance
of processes
Tracking
positive or
negative
performance
trends
Interiors
Maintaining
elegant dcor
Checking
furniture conditions
Displaying
products
Generating
revenue per
customer
Ensuring the
availability of
clean filtered
water
Calculating
overall rating
by evaluating
customer
feedback
Taking care
of proper
lighting
Providing
product
brochures to
customers
Channeling
music
CASE STUDY 9
Repair the watch: Implies that for ensuring high quality customer service, Titan operates fully equipped service centers
with highly trained and experienced service engineers. Every service engineer of the organisation receives training on
technical skills, product knowledge, and complaint handling
techniques. Titan has received ISO 9001 certification, which
ensures that the organisation follows a systematic process for
all repair activities. Moreover, the organisation has certain key
performance measures, such as if a product has 60 per cent
fault, it should be repaired in less than 20 minutes and if there
is 95 per cent of fault, the problem should be resolved in less
than 4 days. Similarly for 99 and 100 percent fault, the maximum repair time taken should not exceed by more than 7 and
15 days respectively. Titan offers a stand-by watch to the customers in case the repair time exceeds 7 days.
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338
CASE STUDY 10
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All over the world (including India), approximately 85% of McDonalds restaurants are owned and operated by independent
franchisees. Despite this, McDonalds is able to run the show
seamlessly by procuring nine different ingredients used in making its burger from over 35 suppliers from all over India through
a massive value chain.
This US giant manages the show so perfectly with the help of a
brilliantly articulated food chain, which extends from its outlets
right up to farms all across India. Similar to other parts of the
world, McDonalds has a very well orchestrated supply chain in
India too, called the Cold Chain.
CASE STUDY 10
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(Source: http://www.icmrindia.org/casestudies/catalogue/Operations/OPER001.htm)
QUESTIONS
340
CASE STUDY 11
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Careers & Future is an institution that offers professional courses and provides class in various IT domains. It was established
in 2006. During that time, the demand for professional courses
in various IT technologies was on peak therefore the institution
easily became popular among students and IT professionals. The
professionals who were working in various IT sectors opted for
the specialised courses to enhance their skill set. However, the
customers were experiencing some problems in the services and
benefits provided by the institution. The current information system of the company was particularly not very effective. One of the
major problems that customers were experiencing was timing. As
most of the customers were IT professionals they were not able
to attend classes during weekdays and thus, wanted to enroll for
weekend classes.
CASE STUDY 11
QUESTIONS
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CASE STUDY 12
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In October 2003, just a month before Diwali, the Food and Drug
Administration (FDA) Commissioner received complaints about
some infestation in two bars of Cadbury Dairy Milk. Cadbury
Dairy Milk is Cadbury Indias flagship brand with over 70% market share. FDA Commissioner ordered an enquiry and went directly to the media with a statement. Over the following 3-weeks,
adverse media coverage touched a high. In India, where Cadbury
is synonymous with chocolate, the companys reputation and
credibility was under intense scrutiny and on stake. Sales volumes came down drastically in the first 10 weeks, although it was
the festival season. Retailer stopped stocking, employee morale
especially that of the sales team was shaken. The challenge was
to restore confidence in the key stakeholders (consumers, trade
and employees, particularly the sales team) and build back credibility for the corporate brand through the same channels (the media) that had questioned it.
In defense, Cadbury issued a statement that the infestation was
not possible at the manufacturing stage and poor storage at the
retailers was the most likely cause of the reported case of worms.
But the FDA didnt buy that. There were allegations and counter-allegations between Cadbury and FDA. Due to the heat of negative publicity,Cadburys sales melted by 30 per cent at a time
when it usually experienced a festive spike of 15 per cent. For the
first time, Cadburys advertising went off air for a month and a
half after Diwali, following the controversy.
REMEDY:
CASE STUDY 12
QUESTIONS
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