Management information system Assignment On Functional areas at different levels related to finance

SUBMITTED TO Prof. A. Anuradha

SUBMITTED BY Md.Ashadulla Reg: no: 6195 MIS-1

Information System
An information system (IS) - or application landscape - is any combination of information technology and people's activities using that technology to support operations, management. In a very broad sense, the term information system is frequently used to refer to the interaction between people, algorithmic processes, data and technology. In this sense, the term is used to refer not only to the information and communication technology (ICT) an organization uses, but also to the way in which people interact with this technology in support of business processes It consists of computers, instructions, stored facts, people and procedures. ISs can be categorized in four parts: 1. Management Information System (MIS). 2. Decision Support System (DSS). 3. Executive Information System (EIS). 4. Transaction Processing System (TPS).

Advantages of Management Information System

The following are some of the benefits that can be attained for different types of information management systems.

The company is able to highlight their strength and weaknesses due to the presence of revenue reports, employee performance records etc. The identification of these aspects can help the company to improve their business processes and operations.

Giving an overall picture of the company and acting as a communication and planning tool.

The availability of the customer data and feedback can help the company to align their business processes according to the needs of the customers. The effective

management of customer data can help the company to perform direct marketing and promotion activities.

Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company.

Levels of Management The term Levels of Management refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories: 1. Top level / Strategical /Administrative level 2. Middle level / Tactical /Executory 3. Low level / Supervisory / Operational/ First-line managers Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. The role of the top management can be summarized as follows a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the performance of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as a. They execute the plans of the organization in accordance with the policies and directives of the top management.

b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees. In other words, they are concerned with direction and controlling function of management. Their activities include a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day to day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation in the organization. e. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers. f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates.

h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with the workers.

Functional Areas in Business

There are mainly three key functional areas in Business namely Marketing Finance Human Resource I am explaining the functional areas at different levels with respect to FINANCE functional area of a company

Operational level
Here we focus on the so called 'human factor' and 'soft skills' involved in the finance context. The functions carried out are 1) The final step in this process is a comprehensive plan to present to senior executives with a financial analysis of each alternative and each alternatives impact on the overall financial position of the company. This plan should use established lean accounting principles, practices & tools in its analysis. 2) The box score should be the primary analysis tool when evaluating the financial benefits of lean. A box score is a one-page summary of operational and financial results of the company along with the state of its productive, nonproductive & available capacity. The box score will illustrate how business decisions that have positive impact on operational and capacity improvement will yield future financial improvement. 3) It is important for this plan to be presented to senior management as soon as possible, after a future state value stream map has been created. The reason this is so important is that it may take some time to implement some of these alternatives and the foundations for new programs, policies and initiatives need to be in place to be immediately implemented as capacity becomes available. 4) One of the roles of finance, and its leadership, in any organization is to be an objective, non-partisan advisor to executives as to the financial soundness of business decisions. Many, but not all, lean initiatives begin at the operational level and at some point need executive approval. By leading the effort to show the financial benefits of lean, the finance team will clearly show to executives that the transformation to a lean company will achieve positive financial results.

Tactical Level
Here decisions are concerned with how efficiently and effectively resources are utilized and how well operational units are performing. Management control involves close interaction with those who are carrying out the tasks of the organization; it takes place within the context of broad policies and objectives set out by strategic planners. Example of Tactical these decisions are mainly for medium to short term, which is one year to 3 months. Some of these decisions are (a) Production Control:-This is related to a scheduling of operations, machines

allocation and monitoring of actual against planned production. The focus is to meet performance objectives in terms of operating costs, timely production, flexibility, agility, set-up time reduction, etc. (b) Stock Control (Material):-This pertains to planning decisions related to stocks of raw material sub-assemblies or finished products. The decisions related to these came under inventory control. This involves decision regarding replenishment quantity and replenishment timing of the stock. (c)Method:-This area is related to decision regarding how to perform a work in the best possible way so that human effort and fatigue are minimum. Measurement and standardization of these methods are treated in the specialized domain of work-study or time and motion study. Work-measurement and ergonomics are other two related areas. (d)Machine:-This involves planning related to acquisition of machine, make or buy decision related to the product, arrangement for developing the capacity of the plant in terms of machine capacity, maintenance planning as a long-term planning, etc. (e) Men:-This involves labor planning for cost effective utilization of manpower. Workcontents for each operator are decided at this stage.

(f) Information and knowledge Management:-Information and knowledge are the key resource these days. In the classical text on PPC, both information and knowledge are ignored. However, with the advent of tremendous leap, in information technology (IT), such as: internet, e-commerce, ERP (enterprise resource planning) associated with ever falling price of hardware (PC, printers, etc) have changed the production scenario. Information and knowledge are the key resource. All the functions of the enterprise need to be integrated (we call it now seamless-integration) with two binding elements: Information and knowledge.

Strategic level
Strategic planning looks beyond the immediate circumstances, in the process clarifying where you want to be in the future. This strategic perspective can be contrasted to the tactical level (which looks at performance of specific products or markets over a shorter time frame) and operational planning (which focuses on the nitty gritty of getting the job done). Following is a somewhat oversimplified but hopefully useful overview of the strategic planning process. Strategic level management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firm in their external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders.

Data Flow diagram For showing how the process is carried out on each level, a data flow diagram is used. Here for explaining the marketing concept in three levels, a data flow diagram of inventory system is shown Inventory Data Flow Diagram

DDData flow diagram for financial management

Explanation Here from this DFD, Operational level Following process are carried out

Here lower level managers works for collecting data

These are the basic frameworks in inventory management normally done by the working executives Tactical level process

These functions explains the logic of the working process mainly carried out by supervisors, Logistics managers and middle level managers Strategic level Process Final decision will be taken by top level managers here

Conclusion
The successful MIS must support a business's Five Year Plan or its equivalent. It must provide for reports based upon performance analysis in areas critical to that plan, with feedback loops that allow for titivation of every aspect of the business, including recruitment and training regimens. In effect, MIS must not only indicate how things are going, but why they are not going as well as planned where that is the case. These reports would include performance relative to cost centers and projects that drive profit or loss, and do so in such a way that identifies individual accountability, and in virtual real-time. Any time a business is looking at implementing a new business system it is very important to use a system development method such as system development life cycle. The life cycle includes analysis, requirements, design, development, testing and implementation.