Q1 Short note on Information System

“An information system (IS) is a set of interrelated elements or components that collect (input), manipulate
(process), store, and disseminate (output) data and information and provide a corrective reaction (feedback
mechanism) to meet an objective.”

Information system: Three activities produce information organizations need ›

Input: Captures raw data from organization or external environment

› Processing: Converts raw data into meaningful form ›

Output: Transfers processed information to people or activities that use it

Feedback: › Output returned to appropriate members of organization to help evaluate or correct input stage

(A) Formal Information System (B) Informal Information System (C) Computer Based Information System
Formal Information System : It is based on organizational chart represented by the organization.
Informal Information System : It is an employee based system designed to meet personal and vocational
needs and to help in the solution of work related problems. It also funnels information upward through
indirect channels. It works within the framework of the business and its stated policies.
Computer Based Information System (CBIS) :
This category of information system depends mainly on the computer for handling business application.
System analysis develops different types of information system to meet variety of business needs. There is
class of system collectively known as computer based information system. They can be classified as :
Transaction Processing System (TPS)
Management Information System(MIS)
Decision Making System (DSS)
Office Automation System (OAS)

Characterstics of I.S.

Relevance

The information a manager receives from an MIS has to relate to the decisions the manager has to make. An effective MIS
takes data that originates in the areas of activity that concern the manager at any given time, and organizes it into forms that
are meaningful for making decisions. If a manager has to make pricing decisions, for example, an MIS may take sales data
from the past five years, and display sales volume and profit projections for various pricing scenarios.

Accuracy

A key measure of the effectiveness of an MIS is the accuracy and reliability of its information. The accuracy of the data it
uses and the calculations it applies determine the effectiveness of the resulting information. The sources of the data
determine whether the information is reliable. Historical performance is often part of the input for an MIS, and also serves
as a good measure of the accuracy and reliability of its output.

Usefulness

The information a manager receives from an MIS may be relevant and accurate, but it is only useful if it helps him with the
particular decisions he has to make. For example, if a manager has to make decisions on which employees to cut due to staff
reductions, information on resulting cost savings is relevant, but information on the performance of the employees in
question is more useful. The MIS has to make useful information easily accessible.
Timeliness

MIS output must be current. Management has to make decisions about the future of the organization based on data from the
present, even when evaluating trends. The more recent the data, the more these decisions will reflect present reality and
correctly anticipate their effects on the company. When the collection and processing of data delays its availability, the MIS
must take into consideration its potential inaccuracies due to age and present the resulting information accordingly, with
possible ranges of error.

Completeness

An effective MIS presents all the most relevant and useful information for a particular decision. If some information is not
available due to missing data, it highlights the gaps and either displays possible scenarios or presents possible consequences
resulting from the missing data. Management can either add the missing data or make the appropriate decisions aware of the
missing information. An incomplete or partial presentation of information can lead to decisions that don't have the
anticipated effects.

Q2 & 3: levels of management decision making

The levels of management decision making that must be supported by information technology in a

successful organization (independently of its size, shape, and participants), are often shown as a managerial

pyramid

Strategic management: As part of a strategic planning process top executives

i. develop overall organizational goals, strategies, policies, and

ii. monitor the strategic performance of the organization and its overall direction in the political,

economic, and competitive business environment

Tactical management: Business unit managers and business professionals in self-directed teams
 i. develop short- and medium-range plans, schedules, budgets and specify policies, procedures,

and business objectives for their sub-units of the company, and

ii. allocate resources and monitor the performance of their organizational sub-units, including

departments, divisions, process teams, project teams, and other workgroups.

Operational management: Operating managers and members of self-directed teams

i. develop short-range plans (e.g. weekly production schedules), and

ii. direct the use of resources and the performance of tasks according to procedures and within

budgets and schedules they establish for the teams and other workgroups of the

organization.

Decision makers need information products whose characteristics, attributes or quality are having the three

dimensions of time, content, and form – see the figure below

Types of Decisions

Decision maker at different levels of the organization are making more or less structured decisions. Typically

there are three types of decision structure:

Unstructured decisions (usually related to the long-term strategy of the organization);

Semi-structured decisions (some decision procedures can be pre-specified but not enough to lead to a

definite recommended decision);

Structured decisions (the procedure to follow, when a decision is needed, can be specified in advance).

Earlier in this course we discussed the concept of system as a set of interrelated components, with a clearly

defined boundary, working together to achieve a common set of objectives. With respect to

the information system, it can be any organized combination of people, hardware, software,

communication networks, data resources, and policies and procedures that stores, retrieves, transforms,

and disseminates information in an organization.

There are three vital roles that information systems can perform for a business enterprise: support of

business processes and operations, support of decision making by employees and managers, and support of

strategies for competitive advantage – see the figure below

Q4: Steps in decision making process

HERBERT SIMON MODEL Decision-making is a process in which the decision-maker uses to arrive at a decision. The
core of this process is described by Herbert Simon in a model.

Four stages of decision making

1. Intelligence
  Discovering, identifying, and understanding the problems occurring in the organization
 Scan the environment to identify problem situations or opportunities  Identify
organizational goals and objectives  Determine whether they are being met  Explicitly
define the problem
Outcome: Problem statement
2. Design
 Identifying and exploring solutions to the problem
 Generating, developing, and analyzing possible courses of action
 Includes  Understanding the problem 
 Testing solutions for feasibility 
 A model is constructed, tested, and validated Modeling 
 Conceptualization of the problem 
 Abstraction to quantitative and/or qualitative forms
3. Choice
 Choosing among solution alternatives
 Search, evaluation, and recommending an appropriate solution to the model 
 Specific set of values for the decision variables in a selected alternative
 The problem is considered solved after the recommended solution to the model is
successfully implemented
4. Implementation
 Making chosen alternative work and continuing to monitor how well solution is working
Q5 Types of Information Systems

Transaction Processing Systems

What is a Transaction Processing System?

Transaction Processing System are operational-level systems at the bottom of the

pyramid. They are usually operated directly by shop floor workers or front line staff,
which provide the key data required to support the management of operations. This
data is usually obtained through the automated or semi-automated tracking of low-level
activities and basic transactions.

Functions of a TPS

TPS are ultimately little more than simple data processing systems.

Functions of a TPS in terms of data processing requirements

Inputs Processing Outputs

Validation
Sorting Lists
Transactions Listing Detail reports
Events Merging Action reports
Updating Summary reports?
Calculation
Some examples of TPS

 Payroll systems
 Order processing systems
 Reservation systems
 Stock control systems
 Systems for payments and funds transfers

Management Information Systems

What is a Management Information System?

For historical reasons, many of the different types of Information Systems found in
commercial organizations are referred to as "Management Information Systems".
However, within our pyramid model, Management Information Systems are
management-level systems that are used by middle managers to help ensure the
smooth running of the organization in the short to medium term. The highly structured
information provided by these systems allows managers to evaluate an organization's
performance by comparing current with previous outputs.

Functions of a MIS

MIS are built on the data provided by the TPS

Functions of a MIS in terms of data processing requirements

Inputs Processing Outputs

Internal Transactions Sorting Summary reports

Internal Files Merging Action reports
Structured data Summarizing Detailed reports

Some examples of MIS

 Sales management systems

 Inventory control systems
 Budgeting systems
 Management Reporting Systems (MRS)
 Personnel (HRM) systems

Decision Support Systems

What is a Decision Support System?

A Decision Support System can be seen as a knowledge based system, used by senior
managers, which facilitates the creation of knowledge and allow its integration into the
organization. These systems are often used to analyze existing structured information
and allow managers to project the potential effects of their decisions into the future.
Such systems are usually interactive and are used to solve ill structured problems.
They offer access to databases, analytical tools, allow "what if" simulations, and may
support the exchange of information within the organization.

Functions of a DSS

DSS manipulate and build upon the information from a MIS and/or TPS to generate
insights and new information.

Functions of a DSS in terms of data processing requirements

Inputs Processing Outputs

Modelling
Internal Transactions Summary reports
Simulation
Internal Files Forecasts
Analysis
External Information? Graphs / Plots
Summarizing

Some examples of DSS

 Group Decision Support Systems (GDSS)

 Computer Supported Co-operative work (CSCW)
 Logistics systems
 Financial Planning systems
 Spreadsheet Models?

Executive Information Systems

What is an EIS?

Executive Information Systems are strategic-level information systems that are found at
the top of the Pyramid. They help executives and senior managers analyze the
environment in which the organization operates, to identify long-term trends, and to
plan appropriate courses of action. The information in such systems is often weakly
structured and comes from both internal and external sources. Executive Information
System are designed to be operated directly by executives without the need for
intermediaries and easily tailored to the preferences of the individual using them.

Functions of an EIS

EIS organizes and presents data and information from both external data sources and
internal MIS or TPS in order to support and extend the inherent capabilities of senior
executives.

Functions of a EIS in terms of data processing requirements

Inputs Processing Outputs

External Data Summarizing Summary reports

Internal Files Simulation Forecasts
Pre-defined models "Drilling Down" Graphs / Plots
Some examples of EIS

Executive Information Systems tend to be highly individualized and are often custom
made for a particular client group; however, a number of off-the-shelf EIS packages do
exist and many enterprise level systems offer a customizable EIS module.

Q6 Enterprise Applications
Enterprise System

In the book "Enterprise Information Systems: Contemporary Trends and Issues," David Olson states that enterprise systems
integrate a number of different applications, protocols and formats. In doing so, an enterprise system allows companies to
integrate business processes, such as sales, deliveries and accounts receivable, by sharing information across business
functions and employee hierarchies. Enterprise systems can replace multiple independent systems that may or may not
interact with other systems and that process data to support particular business functions or processes. For example,
enterprise resource planning supports the entire sales process that includes pre-sales activities, sales orders, inventory
sourcing, deliveries, billing and customer payments. Enterprise resource planning, supply chain management and customer
relationship management systems are each examples of enterprise systems.

1)Customer Relationship Management

Customer relationship management systems were developed to address the need to raise a sales department’s productivity
and make the management of a company’s customers an effective way to increase sales. With CRM functions, such as sales
opportunity management, a company learns more about its customers’ needs and buying behavior and combines this
information with market information to enhance the quality of the company’s marketing plans and sales forecasts. Other
attributes of the CRM system, including the integration of this system with other systems and system access via mobile
devices, allow employees to update and compare data regardless of the system it’s in and to access information from any
client site or other location. Equally important, CRM supports mass e-mail communications and automates the sales process
workflow to improve employee productivity.

2)Supply Chain Management

A supply chain refers to the collection of people, tasks, equipment, data and other resources required to produce and move
products from a vendor to a customer. Dr. Robert Hanfield of Bank of America describes supply chain management as the
management of supply chain activities by the supply chain firms in an effective and efficient way. According to Hanfield,
such activities include product development, material sourcing, production and logistics as well as the information systems
that coordinate these activities. Information flows allow supply chain partners to coordinate their strategic and operational
plans as well as the day-to-day flow of goods and materials through the supply chain. The physical flows include the
manufacture, transport and storage of goods or materials.

3)Enterprise Resource Planning

The enterprise resource planning system integrates software applications just as a company integrates business processes,
such as purchasing, finance, human resources and inventory management. Within an ERP system, the integrated software
modules, such as sales, quality management and accounts receivable, communicate and share data. Each of these modules
consists of multiple applications that perform the functions required to execute particular end-to-end business processes. For
example, the sales module includes the applications necessary to create and manage sales contracts, sales orders, sales
invoices and sales order pricing. ERP applications support not only various operational and administrative tasks, such as the
creation of an account payable or a time sheet, they may also be customized to support a number of different industries,
including oil and gas, retail and banking

Q8: As a manager how will you resolve business IT disconnect

http://www.apmdigest.com/apm-bridge-gap-between-it-and-business