Mb0047 Unit 08-Slm

Management Information System Unit 8
Sikkim Manipal University Page No. 149

Unit 8 Trends in MIS
Structure:
8.1 Introduction
Objectives
8.2 Recent Trends in MIS
Introduction to Decision Support Systems (DSS)
DSS components
Model of DSS
Present status of MIS in organisations
Importance of MIS in organisations
8.3 Artificial Intelligence (AI)
Introduction to Artificial Intelligence (AI)
Introduction to Neural Networks (NN)
Artificial intelligence and neural networks
Introduction to Expert Systems (ES)
Expert systems structure
Differences between DSS and ES
Business applications
8.4 Online Analytical Processing (OLAP)
8.5 Open Source Software
8.6 Software as a Service (SaaS)
8.7 Summary
8.8 Glossary
8.9 Terminal Questions
8.10 Answers
8.11 Case Study

8.1 Introduction
In the earlier unit, you have learnt about the enterprise business systems in
detail. In this unit, you will learn about the trends in MIS that prevail in
organisations. For the last few decades MIS is perceived by different people
in various organisations in diverse views. This is because the MIS has been
evolving in a variety of forms under different levels of management. Some of
the developments are recent additions and some are still in the development
stage.
Objectives:
After studying this unit, you should be able to:
explain the recent trends in MIS
analyse decision support systems and its components
describe expert systems and its structure
analyse artificial intelligence and neural networks

8.2 Recent Trends in MIS
Information technology has grown as a powerful tool and is omnipresent in a
business enterprise. Old traditional MIS tools and techniques are displaced
by new set of software. Let us now learn about the various MIS currently
used in business.
8.2.1 Introduction to Decision Support Systems (DSS)
Decision Support System (DSS) is an interactive, flexible, computer based
information system. It uses rules and models for processing data to support
various managerial levels, ranging from top executives to managers in their
decision making. It supports all phases of decision making such as
intelligence, design, choice and implementation.
DSS is usually built to support the solution of a certain problem and it does
not replace the decision maker. It is user-friendly with strong graphical
capabilities.
8.2.2 DSS components
The components of a DSS include a database for query and analysis,
software with models, data mining and other analytical tools and a user
interface. The DSS database is a collection of current or historical data from
a number of applications or groups. It can be a small database or a
massive date warehouse. The DSS software system includes software tools
for data analysis. They contain various Online Analytical Processing
(OLAP) tools, data mining tools or a collection of mathematical and
analytical models. A model can be a physical model, a mathematical model
or a verbal model. Most commonly used are the statistical functions such as
means, medians, deviations and scatter plots. Optimisation models, such as
linear programming are used to determine optimal resource allocation.
Figure given below depicts the components of a DSS.

Fig. 8.1: Components of a Decision Support System
8.2.3 Model of DSS
The model of a DSS may be represented as a block diagram as depicted in
figure 8.2.

Use
Of
Appropriate
decision
Support
Software
Database
management to
support decision
making process

Managing the
decision models
MANAGER

Fig. 8.2: Model of DSS
8.2.4 Present status of MIS in organisations
The modern and scientific managements studied the potential information
after collecting various data from several departments for an initial analysis.
As this analysis helped the management of the organisation, new software
and hardware were introduced and the organisations started to install them
for easy operation and maintenance. The built-in tools were helpful to arrive
at a conclusion within a short span of time. It has now become compulsory
for every employee of the organisation to provide the data related to their
departments.

DSS database
TPS External data
DSS software system
Models
OLAP tools
Data mining tools
User Interface
User
8.2.5 Importance of MIS in organisations
Many organisations in the world make use of MIS as it plays an important
role in every business towards its growth. It is used as a tool in management
to perform a SWOT (Strength, Weakness, Opportunity, and Threat)
analysis, etc., to find facts about the organisation.
Let us see the importance of MIS
It helps and provides facts of data in decision making.
It provides some alternatives by which the management can come to a
decision on various issues. From the available alternatives a best
alternative can be chosen to obtain a desired result.
Lateral communication in the organisation is generally increased by the
use of MIS.
MIS helps in planning, organising, controlling and directing the activities
of the organisation.
The management, on the basis of the MIS reports compare the past and
present data to take informed decisions.
These types of data in MIS are used to apply for an effective controlling
of measures.
MIS supports decentralisation of the organisation. Through
decentralising activities the management is able to approach the lower
level of employees.
1. Contribution of new trends
As information technology has grown more powerful and ubiquitous in
business settings, the role of the traditional MIS has been discarded after
the arrival of new software applications.
A trend replacing conventional MIS since the 1980s has been the adoption
of Executive Information Systems (EISs) and other high-level decision
support systems. EISs are designed for top executives to gather important
information from all major business systems such as finance, inventory,
payroll, etc. and process it in very sophisticated ways and possibly even
integrate it with outside data such as competitive intelligence or industry
statistical norms. By providing such highly refined control over strategic
information, EISs have slowly lost their importance because the MIS
provides more routine kinds of analyses.
2. Networking capability
Another trend in MIS is the ability for companies to network with other
companies for business purposes. Manufacturing firms can shorten their
supply chain using Electronic Data Interchange (EDI) to transfer the
necessary information for ordering more products. Networking also allows
companies to transfer money through several bank accounts, creating a
quicker process for paying bills and purchasing materials. An MIS ensures
that management has all the required information on the business
operations and allows them to review the effectiveness of operations.
3. Data mining tools
An important trend in MIS is the ability of companies and other organisations
to use data mining tools to find patterns in consumer purchases and other
business trends. This allows management to translate the information into
goals and directions for future business operations. Most MIS software
contain trending or forecasting models that allow companies to project
emerging consumer markets for profitable operations. Companies can use
their internal figures in the MIS to measure the effectives of their external
data mining techniques.
Example I:
Population of Delhi, India: This shows the projected population of Delhi in
2011.
Table 8.1: Projected Population Characteristics as on 1st March 2001 - 2026
Indicator 2001 2006 2011 2016 2021 2026
i) Population in (000)
Total 13851 16021 18451 21285 24485 27982
Male 7607 8835 10215 11827 13650 15645
Female 6243 7186 8235 9458 10835 12337
Sex ratio 821 813 806 800 794 789
Density per
sq Km
9340 10803 12441 14353 16511 18868
ii) Age group in (000)
age18 above 8466 10551 12876 15346 17891 20530
Age 0 to 14 age 4500 4450 4514 4848 5548 6248
Age 15 to 59 8651 10662 12744 14847 16804 18929
Age 60 plus 700 909 1193 1589 2131 2805
iii) % of population
Age 0 to 14 32.5 27.8 24.5 22.8 22.7 22.3
Age 15 to 59 62.5 66.5 69.1 69.8 68.6 67.6
Age 60plus 5.1 5.7 6.5 7.5 8.7 10.0
Age 15to 49 female 55.6 59.2 61.1 61.1 59.3 58.0
Source: Population projection (Trend) by Govt. of India
As depicted in table 8.1, the density of population per square kilometre
increases to 18868, almost double the population of the year 2001.
The MIS states the growing trend of the population. Therefore, the
government can use the above data to take necessary control measures to
reduce the population.
Example II
Trends in Indian banking industry
Jyothi Kumar Pandey, (College of Agricultural Banking, Reserve Bank of
India, Pune, indicated that there are several road blocks to creativity in
banking industry and the only way is to move towards technology and
electronic clearing environment in banking industry. The banking industry
will stand to gain
Recognition Automation
Improve telecom networks
Rapid restructuring programmes.
After the successful implementation of MIS in the banking sector:
There is successful transformation to a sales culture:
o Branches of banks are called as stores.
Stresses on the employees of banks to focus on sales at all levels.
o Focus on customer experience:
Friendly banker with a service motive.
o Shift from brick to mortar to high level of web and Internet banking
system including mobile banking.
Brick and mortar refers to the type of business where business is physically
and practically done in a stores, etc. Wherein anyone can go in see, touch
and test articles for its working condition so as to purchase them from these
shop keepers. In general this term is used for businesses where products
are sold in physical locations. In the case of dotcom businesses is done
through a mail order.
Other trends
More stress on e-money, plastic money and Internet based delivery
channel.
Lower credit to manufacturing and productive sectors.
Higher growth in housing and auto finance.
Needs to treat the customers fairly.
Need for banks to have a fair practice code.
Customer service committee at board level.
Each bank to have a nodal department.
Financial inclusion.
Need for customer education efforts by banks.
Revised banking Ombudsman scheme to cover redress of banking
products deficiency.
Service of loans, advances, credit cards, etc.

Fig. 8.3: Technology and Electronic Clearing Environment

Self Assessment Questions
1. DSS uses rules and models for processing data, to support various
managerial levels, ranging from top executives to managers, in their
decision making. (True/False)
Key recent initiatives by
Reserve Bank of India
1. Real Time Gross
Settlement (RTGS)

2. National Electronic Fund
Transfer (NEFT)

3. Cheque truncation
(equivalent to 21-pilot posting)

4. National Settlement System
(NSS)
Client needs
1. Expedite the collection
of receivables from
across the country

2. Electronic banking
interfaces to automate
disbursements

3. Implement efficient
account structure for
concentration of funds

4. Minimise excess cash
and overdraft balances

5. Sound MIS for effective
planning and decision
making

6. End to end integration
with bank`s interface and
ERP systems.
2. The Transaction Processing System (TPS) is a collection of
current or historical data from a number of applications or groups.
(True/False)
3. Manufacturing firms can shorten their supply chain using electronic
data ________________.
4. __________, such as linear programming are used to determine
optimal resource allocation.
5. The _____ database is a collection of current or historical data from a
number of applications or groups
8.3 Artificial Intelligence (AI)
In the previous section, you learnt the recent trends in MIS. You will now
learn about Artificial Intelligence. Artificial Intelligence (AI) is the skill and
engineering which includes several scientific mathematical functions to
formulate an organisational system that can conceive and discharge work
like a human being. Let us discuss AI for our basic understanding.
8.3.1 Introduction to Artificial Intelligence (AI)
AI can understand, examine and resolve problems. Such a system that uses
the ingredients artificially is known as artificial intelligent systems. The
artificial intelligence system functions like a human being and helps a
manager in taking quick decisions.
Software developed for AI is created using computer language like Prolog,
C++, Java, LISP, etc. To develop an AI for business application the concept
of fuzzy logic is used. With regard to business problems related to finance
applications apart from fuzzy logic concepts, two other concepts of AI
namely genetic algorithm and chaotic models are used.
8.3.2 Introduction to Neural Networks (NN)
Neural Networks (NN) is modelled on the basis of the neuron structure of
the human brain.
Neuron is a micro cell which is connected to thousands of other micro cells
in the brain. It is a system which tries to learn from the database and the
manager then decides as to what the right answer is. The entire neural
network is realised in the form of software. The software renders the
computer as a problem solver.
The neural networks build strong databases for problem solving depending
upon the decisions taken by the manager in the form of response
confirmation given to the system. Neural networks can be used in various
business applications like forecasting, stock analysis, market analysis etc.
Advantages of neural networks
Neural networks are used to forecast some complex data patterns. When
designed properly, they can be used as experts for a particular project. They
have the ability to adjust to the changing environment and thus are very
flexible. For example, it can forecast net asset values of mutual funds with
40% accuracy. They take into account all variables and relationships
between the data and detect patterns and trends in any set of data.
Disadvantages of neural networks
The process of designing the neural networks is very complex and time
consuming. The network needs to be trained continuously with different sets
of data. In the training phase, large volumes of examples are used. Without
repeated training the accuracy of the network will decline. Over-training with
large amounts of data also leads to inaccuracy. Sometimes, there is
instability in problem solving. With the data constantly changing, it is difficult
to repeat a solution to a problem and explain how it arrived at that solution.
Neural networks results are often criticised because of the fact that it is
unable to give justification of how a particular solution has been arrived at.
The rules are completely not understood.
8.3.3 Artificial intelligence and neural networks
Artificial intelligence is an area of science and technology based on fields
that come under computer science, biology, psychology, linguistics,
mathematics and engineering. The aim of AI is to promote computers that
can simulate the ability to think, see, hear, walk, talk and feel. In other
words, simulation of computer functions normally is linked with human
intelligence, such as logical thinking, finding out reasons and solving
troubles.
AI can be grouped under three major areas namely cognitive science,
robotics and natural interfaces. Cognitive science focuses on researching on
how the human brain does work and how human beings imagine and find
out. Applications in the cognitive science area of AI include the exploitation
of proficient systems and other knowledge-oriented systems that add a
knowledge base and some reasoning capacity to information systems. Also,
included are accommodative learning systems that modify their activity
based on information it posses as it operates. Chess-playing methods are
some examples of such systems.
Fuzzy logic systems can process data that are fractional or equivocal. Thus,
they solve semi-structured problems with partial knowledge by developing
estimated inferences and answers, as done by humans.
Neural network software can learn by treating sample problems and their
solutions. As neural networks begin to distinguish designs, they can start
programming themselves to solve such problems on their own.
Neural networks are computing systems that are similar to human brains
which are interconnected through neurons. The neurons are called as brain
cells. The human brain is estimated to have over 100 billion neuron brain
cells. The neural networks are lot simpler in architecture. Like the brain, the
neutral network operates through coordinated processors in parallel and
dynamically with one another.
This helps the network to operate and learn from the data it processes,
similar to the human brain. The network distinguishes patterns and
relationships in the data. Hence, as and when more data and examples are
received as input, the better it can learn to replicate the results of the
examples it processes. It is now clear that, the neural networks can change
the strengths of the links between the processing elements in response to
changing patterns in the data it receives and results that occur.
Genetic algorithm software uses Darwinian principle (survival of the fittest),
randomising and other mathematics functions to imitate evolutionary
processes that can generate increasingly better solutions to problems.

Figure 8.4 depicts few applications of AI.

Expert systems Visual perception Natural languages
Learning systems Tactility Speech recognition
Fuzzy logic Dexterity Multi-sensory interfaces
Genetic algorithms Locomotion Virtual reality
Neural networks Navigation
Intelligent agents
Fig. 8.4: Applications of AI
Cognitive Science
Cognitive science is nothing but the mental representations correspondent
to computer data structures, and computational processes similar to
computational algorithms.
Robotics: Engineering and physiology are the basic subjects of robotics.
Robotic machines are produced using robotic applications along with
computer intelligence and physical movements are controlled by computers.
The robotic applications are developed in such a way to give power to robot
to view, feel and physical movement. The robotic application also enables
the robot to walk in any terrain and helps the robot to navigate and reach the
destination correctly.
Natural interfaces: The development of natural interfaces is indispensable
to the use of computers by people. Development of normal languages and
speech recognition are major thrusts in this area of AI. The goal of the AI
research is to make the computers and robots to talk and understand each
other through conversational language as practised by human beings. Other
natural interface research applications include the development of multi-
sensory devices that utilise the body movements to control computers. This
is related to the emerging application area of virtual reality. Virtual reality
involves using multi-sensory humancomputer interfaces that enable human
users to experience computer simulated objects, spaces, activities and
worlds as if they actually exist.
8.3.4 Introduction to Expert Systems (ES)
An expert system is a knowledge-based information system that uses its
knowledge about a specific, complex application area to act as an expert
consultant to end users. It is a component of AI. ES is a specialised
knowledge base which is able to answer to questions after thorough
analysis of the problems. Expert systems is like an expert consultant which
can support in decision making to end users.
8.3.5 Expert systems structure
The components of an expert system include software modules and
knowledge base. These components help to infer information from
knowledge base and furnish answers to questions of the user. The
knowledge base of an expert system contains the facts about a specific
area; Heuristics (thumbs of rule-means of estimation made according to a
rough and ready practical rule, not based on science or measurement)
express the reasoning procedures of an expert on the subject. There are
many ways that knowledge is represented in expert systems:
Case-based reasoning: Representing knowledge in an expert systems
knowledge base in the form of cases.
Frame-based knowledge: Frame base knowledge represented in the
form of a power structure or electronic network of frames. Collection of
knowledge about an entity consisting of a complex package of data
values describing its properties is termed as a frame.
Object-based knowledge: Object based knowledge is knowledge
represented as a network of objects. The data element of the knowledge
that includes both data and the method to act on those data is termed as
an object.
Rule-based knowledge: Rule based knowledge is represented in the
form of rules and statements of fact. Rules are statements that typically
take the form of a premise and a conclusion such as: IF (condition),
Then (conclusion).
Software resources: An expert system software package includes an
inference engine and other programmes for elaborating knowledge and
communicating with users. The inference engine programme is
concerned with processes of knowledge (such as rules and facts)
related to a specific problem. The inference engine recommends the
inferences and the course action to be taken to the user. It then makes
associations and inferences resulting in recommended courses of action
for a user. In addition to the above, the software includes user interface
programmes and explanation programmes. These programmes help to
communicate and furnish explanations to end users.
8.3.6 Differences between DSS and ES
It is possible to integrate ES with DSS. There may be some components
which may look similar in DSS and ES. But one should understand the
differences between them. It then becomes clear as to how the integration
of ES with DSS can be realised.
DSS helps managers to take decisions whereas an ES acts as a
decision maker or an advisor to the manager.
DSS is meant only for decision making whereas an ES provides
expertise to the manager.
The spectrum of complexity is high in DSS and low in ES since ES
addresses issues related to specific areas only.
DSS does not have the capability to reason whereas an ES has.
DSS cannot provide detailed explanation about the results whereas an
ES can.
Hence by integrating the two it is possible to blend their advantages and
derive the best out of the two.
8.3.7 Business applications
Expert systems help to solve problems encountered in a business and can
offer ways to overcome such problems and can help financial planning. So
from a strategic business point, expert systems can and are being used to
improve every step of the product cycle of a business, from finding
customers to shipping products to providing customer service. ES provides
a cost reduced solution, consistent advice with low level of errors, solution to
handle equipments without human interference. It provides a high degree of
reliability and faster response time. It helps to solve complex problems with
in a small domain.
It is capable of analysing the problem and can construct a business model
appropriate to the characteristics of the application. Based on the model
necessary objectives and constraints are identified. It identifies appropriate
tools to solve the model. It uses the tools to solve the problem sensitivity
analysis.

6. _________ is the skill and engineering which includes several scientific
mathematical functions to formulate an organisational system that can
conceive and discharge work like a human being
7. A _______ is a micro cell which is connected to thousands of other
micro cells in the brain.
8. The goal of AI is to develop computers that can ________ the ability to
think, see, hear, walk, talk and feel.
9. The components of an ________ system include software modules and
knowledge base.
Activity 1:
Try to construct a model of a Robot -person and list out what are required
to make him artificial intelligent..
8.4 Online Analytical Processing (OLAP)
In the previous section you have learnt about artificial intelligence. In this
unit you will learn about another MIS trend of Online Analytical Processing
(OLAP).
OLAP allows managers to find patterns, trends and exceptions in large
amount of data from different angles in real time. It involves three analytical
procedures of consolidation, drill down and slicing and dicing.
Consolidation
Inter-related data is grouped according to requirement. This allows the data
to be rolled up to a higher level. For example, it allows the individual sales
representative data to be rolled up to the branch level, branch level data to
be rolled up to the city level and so on.
Drill down
This operation is the reverse of the consolidation process and allows the
manager to look into the particulars. That is the data from the higher level
can be expanded to view the lower level data. For example, city level sales
data can be drilled down to the branch sales data and branch data to
individual sales representative data.
Slicing and Dicing
This operation allows the data to be viewed from different angles based on
time. One slice may show regional sales, another slice sales channel sales
and on. This operation is executed along a time axis to expose trends in
data.

10. _________ OLAP operation allows the data to be viewed from different
angles based on time.
11. _________OLAP operation is the reverse of the consolidation process
and allows the manager to look into the particulars.

8.5 Open Source Software
Open Source software refers to applications that are distributed along with
their source code. This enables the users to modify the working of
application to suit their needs. Users can give the software to others under
the original license. Also the license is free from technology or interface
restriction. The users of such applications can be organisations,
professionals or home users. The open source code is distributed free or for
payment. For example instead of using Microsoft Office Suite organisations
can download OpenOffice.org suite free of cost from the internet.
Open source models in use
Currently there are three models in use
Sponsored open source
Not for profit organisations maintain and organize the development of open
source software. For example Mozilla foundation supports the development
of Firefox web browser. Likewise Oracle distributes OpenOffice.Org suite
with source code.
Open Source Service
The creator of Linux operating system Linus Torvalds distributed the source
code of the operating system to all who were interested in upgrading the
same. This led to the open service model. Even today Linux operating
system license is free but companies like Red Hat Inc charge for installation,
support and training.
Well known companies like Novell, HP and Unisys participate in this
marketplace by distributing open source software like MySql (database
management system), Apache Web server and Linux operating system.
Professional Open Source
A group of professionals like software developers, testers, programmers and
adopters work together to create open source software. They depend on
their understanding of the source code to provide software to the customer
for their requirements.
Advantages of open source
In comparison to proprietary software like Microsoft Windows the open
source software like Linux operating system is crash proof and
consistent. Also the switching costs are lower as customers can modify
code to suit their needs.
It exploits the power of disparate software professional situated all over
the world to create powerful software.
There is no legal constraint on the number of simultaneous users when
setting up and using open source software
Most of the open source software is distributed free of cost.

12. __________ software refers to applications that are distributed along
with their source code.
13. There is legal constraint on the number of simultaneous users when
setting up and using open source software(True/False)
8.6 Software as a Service (SaaS)
SaaS is software delivery model where the application including database is
installed on the data centre owned by the service providers .Multiple entities
access the application interface on the web. The plus point for organisations
using this service is that the organisation need not invest in IT and own the
application but use the internet to access the software. Also the payment
could be in terms of pay per use or subscription or flat licensing fee. The
organisation need not employ IS personnel to troubleshoot and maintain the
system. The service providers do this.
SaaS software ranges from simple free service like email (Gmail, yahoo),
Google analytics and Google labs to complex enterprise systems like
Infosys banking solution software Finnacle and Salesforce.coms SaaS
ERP.
The disadvantage of SaaS is that it is dependent on the Internet and the
service provider. If internet gets disconnected then the application cannot be
used. For example internet service providers like Airtel and BSNL send
messages to inform customers that internet services may be disrupted for
some hours due to maintenance activity. Also if service provider has some
problems at the data centre then the services may not be accessible. For
example Salesforce.com a well known SaaS provider experienced this
problem that resulted in its customer losing sales during the Christmas
season.
14. If internet gets disconnected then the SaaS application cannot be used.
(True/False)
15. SaaS is software delivery model where the application including
database is installed on the organizations computers and servers.
(True/False)

8.7 Summary
Let us recapitulate the important concepts discussed in this unit
Information technology is omnipresent in a business enterprise.
Artificial Intelligence is the science and technology based on various
functions to develop a system that can think and work like a human
being
NN is modeled on the basis of the neuron structure of the human brain.
An important trend in MIS is the ability for companies and other
organisations to use data mining tools to collect information regarding
consumer purchases and other economic trends
Expert systems help diagnose illness, search minerals, analyse
compounds, recommend repairs and do financial planning.
By integrating DSS and ES, it is possible the blend their advantages and
derive the best out of them.
OLAP allows managers to find patterns, trends and exceptions in large
amount of data from different angles in real time. It involves three
analytical procedures of consolidation, drill down and slicing and dicing.
Open Source software refers to applications that are distributed along
with their source code. This enables the users to modify the working of
application to suit their needs.
SaaS is software delivery model where the application including
database is installed on the data centre owned by the service providers
and multiple entities access the application interface on the web.
8.8 Glossary
Analytical model: A computer based mathematical model created to
explore business alternatives.
Source Code: Instructions written for the software in a programming
language like Java and Visual Basic.
Switching Cost: Cost in terms of cash, effort, hassles and time taken for a
customer to change over to competitors products and services

8.9 Terminal Questions
1. Explain the decision support systems in detail.
2. What is artificial intelligence? How is it different from neural networks?
3. How can expert systems be useful in MIS and management decision
making process?
4. What are the differences between DSS and ES?
5. Describe the three analytical procedures involved in OLAP
6. What is open source software? Discuss the various models.

8.10 Answers

1. True
2. False
3. Interchange
4. Optimisation
5. DSS
6. Artificial Intelligence
7. Neuron
8. Simulate
9. Expert
10. Slicing and dicing
11. Drill down
12. Open Source
13. False
14. True
15. False
Terminal Questions
1. Decision Support System (DSS) is an interactive, flexible, computer
based information system. For details Refer 8.2.1.
2. Artificial Intelligent can understand, examine and resolve the problems.
For details Refer 8.3.
3. An expert system is a knowledge-based information system that uses its
knowledge about a specific, complex application area to act as an expert
consultant to end users. For details refer 8.3.4 and 8.3.5
4. It is possible to integrate ES with DSS only if we understand their
differences. For more details Refer 8.3.6.
5. It involves three analytical procedures of consolidation, drill down and
slicing and dicing. For more details refer 8.4.
6. Open Source software refers to applications that are distributed along
with their source code. For more details refer 8.5.

8.11 Case Study
Reserve Bank of India (RBI) determines the Cash Reserve Ratio (CRR) and
Statutory Liquidity Ratio (SLR) of banks. RBI also monitors the reserve
requirements of individual banks.
To enable RBI to check on the reserve requirements at large and in
individual banks in particular, RBI relies on the report submitted by individual
banks. The individual banks in turn look upon to their branches to provide
information on demand and term liabilities they hold in their branches.
With the advent of computerisation and introduction of core banking system,
the controlling office of the bank is able to call out accurate and real-time
information on demand and time liabilities the bank holds systemically
without having to rely on manual figures. Automation has helped in
achieving speed and accuracy in the process of information gathering. This
has also helped the banks to maintain reserves accurately, thereby saving
huge amount of interest.
Discussion Questions:
1. State one area where core banking system helps in information
gathering.
Hint: Banks are required to submit report to RBI related to information
on lending to different sectors. Banks are able to provide real-time,
accurate figures. They are also able to segregate the dues from
borrowers into different buckets for the purpose of gearing up recovery
in order to avoid an asset becoming a non-performing asset.

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E- Reference:
http://www.ehow.com/about_5623380_trends-management-information-
systems
http://searchcio.techtarget.com/definition/bricks-and-mortar
http://www.phrases.org.uk

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Management Information System Unit 8

Sikkim Manipal University Page No. 149

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