Management Information System Topics:

Definition of Management Information System

Purpose of Management Information System
Advantages of Management Information System
Objectives of Management Information System
Characteristics Management Information System
Models/ types of Management Information Systems
Management Information System Planning, Controlling and Limitations

Definition of Management Information System

Management Information System can be defined as a formal method of

collecting timely information in a presentable form. in order to facilitate
effective decision making and implementation, in order to carry out
organizational operations for the purpose of achieving the organizational goal. A
management information system is a system design to provide selected
decision orientation information needed by management plan, control and
evaluate the activities of the corporation. It is designed within the frame work
that emphasizes profit, planning, performance planning and control at all levels.
It complements the ultimate integration of required business information sub
system both financial with in the company.

According to Philip kolter- A marketing information system consist of

people, equipment and procedures together,sort,analyse,evaluate and distribute
the needed timely and accurate information and marketing decision makers.

Professor Allen S. Lee states that research in the information system field
examines more than the technological system,or just the social system or even
the two side by side in addition it investigates the phenomena that emerge when
the two interact.

An information system can be any organized combination of people, hardware,

software, communication network and data resources that collects, transforms
and disseminates information in an organization.

Purpose of Management Information System

Information processing is a major social activity. A significant part of an

individuals working and personal time is spent in recording, searching for, and
absorbing information, as much as 80% of a typical executives time is spent on
processing and communication information. Their duties involve the production
and use of information outputs documents, reports, analysis, plans, etc.

The system provides information on past, present, and project future and on
relevant events inside and outside the organization in the society. it may be
define as planned and integrated system for gathering relevant data,coverting it
in to right time. The main purpose of management information system is to
provide the right and correct information to the right people at right time.

Another important purpose of management information system is that it is

needed by all business organization because of increased complexity and rate of
change of todays business environment foe example marketing manager needs
information about sales performance and trends financial manager needs
information on returns, production manager needs information analyzing
resources requirement and workers productivity and personnel manager needs
information analyzing resources requirements and workers productivity and
personnel manager needs information concerning employee compensation and
professional development. thus effective managers with the specific
marketing,financial,production and personnel information, and products they
require to support their decision making responsibilities.

Management information system concept is a vital to effective computer use

in business of two or major reason:

1- It serves as a system framework for organizing business computer

applications. business application of computer should be viewed as interrelated
and integrated computer based information system and not as independent data
processing job.

2- It emphasized the management orientation of electronics information

processing in business the primary goal of computer based information should
be the processing of data generated by business operations.

Advantages of Management Information System

1. Management information system helps the managers to make planning and

control decision.

2. Facilitated planning- management information system improves the quality

of plants by providing relevant information for sound decision making due to
increase in size and complexity of organization managers have lost personal
contact with the scenes of operations.

3. Minimize information overload- management information system changes

the larger amount of data into summarized form and thereby avoids the
confusion which may arise when manager are flooded with detailed facts.

4. Bring coordination-management information system facilities integration

of specialized activities by keeping each department aware of the problem and
requirement of their department. it connect all decision centers in the
organization.

5. Make control easier-it serves as a link between managerial planning and

control. It improves the ability of management to evaluate and improve
performance. The use of computers has increased the data processing and
storage capability and reduces the cost.

6. Management information system assembles, processes.stores, retrie,

evaluate, and disseminate the information.

7. It insure that appropriate data is collected from the various sources,

processed, and sent further to all the needy destinations.

8. Management information system helps in strategic planning, management

control, operational control and transaction processing.

9. It helps the clerical personnel in the transaction processing and answer their
queries on the data pertaining to the transaction the status of a particular record
and reference on a variety of documents.

Objectives of Management Information System

1. Management information system main objective is to attain the transaction

processing of data of an organization effectively. Transaction processing is
applied in conversion and analysis of raw data.

2. Management information system is the management of marketing, fianc,

production, and the personnel becomes better trained which result in his
efficiency.

3. Management information system is in making the forecasting and long

term prospective planning more effective.
4. It tries to create a structured database in knowledge base for all the people in
the organization.

Characteristics of Management Information System

Management information system and top management - management

information system is a comprehensive and coordinated set of information
subsystems which are rationally integrated and which transform data
information in a variety of a ways to enhance productivity in conformity with
the managers style and characteristics on the basis of established quality.

1. Management oriented - the system is designed from top to bottom. This

does not mean that the system will be geared to providing information directly
to top management rather it means that the system development starts from an
appraisal of management needs and overall business objectives it is possible
that top management is the focus of the system such as their needs cornerstone
on which the system is built for example- a marketing information system basic
sales order processing the shipment of goods to the customers and the billing of
the goods are fundamental operation control activities. however if the system is
designed properly this transaction information can be traced by salesman, sales
territory, size of order, geography and product line furthermore if designed with
strategic management needs in mind external competition market and economic
data can be created to give a picture of how well the companys product are
faring in their marketing environment and to serve as a basic of new product or
marketplace introduction the initial application can be geared to the operational
and management control areas but in such a way as not preclude its integration
into a strategic planning subsystem for upper management.

2. Management directed - because of the management information system it

is imperative that management actively directs the system development efforts
to determine what information is necessary to improve its control of operation it
is rare to find an management information system where the manager himself
or a high level representative of his department is not spending a good deal of
time in system design it it not a non time involvement for continued review and
participation are necessary to ensure that the implemented system meets the
specification of the system that designed therefore management is responsible
for setting system specification and it must play a major role in subsequent trade
off decision that inevitably occur in system development. An important element
of effective system planning is the process for determining the priority of
application development. Management must control this process if a
management information system is the objectives. A company without a
formal application approval cycle and a management steering to determine
priorities will never develop an management information system.

3. Integrated - integration is significant because of the ability to produce more

meaningful management information for example in order to develop an
effective production scheduling system we must balance such factors as:

A. Set up cost.
B. Work force.
C. Overtime rates.
D. Production capacity.
E. Capital requirement
D. Customer service.

4. Common data flows - Because of the integration concept of management

information system there is an opportunity to avoid duplication and
redundancy in data gathering storage and dissemination for example customer
orders are the basic for billing the customer for goods ordered setting up the
accounts receivable initiating production activity sales analysis sales forecasting
and so on it is prudent to capture this data closest to the source where the event
occur and use it throughout the functional area it is also prudent to capture it
once and thus avoid the duplicate entry of sources data into several system.

5. Heavy planning elements - Management information system do not occur

overnight they take from three to five years and longer to get established firmly
within a company a heavy planning element must be present in management
information system development the management information system
designer must have the future objectives and needs of the company firmly in
mind. the designer must avoid the possibility of system obsolescence before the
system planning is an essential ingredient to successful management
information system the management information system provides
meaningful direction towards which one strives.

6. Sub-system concept - In tackling a project as broad and complex in scope as

a management information system, one just avoid losing sight both the forest
and the trees. Even though the system is viewed as a single entity, it must be
broken down into digestible sub-system that can be implemented one at a time.
The breakdown of management information system into meaningful
subsystems set the stage for prioritized implementation. The subsystem analysis
is essential for applying boundaries to the problem, thus enabling the designer
to focus on manageable entities that can be assigned and computerized by
selected system and programming team.
7. Flexibility and ease of use - Despite a careful analysis of the future
management information needs it is impossible to predict what is desire their to
five year hence. This is true in most industries and especially in industries with
rapid change patterns, it is nave to think that if anyone possesses the
omniscience to predict the future with this aa a premise, the next best thing an
management information system developer can do is to built in the flexibility
to incorporate as many manufacture nuances as possible.

8. Data base - The data is the mortar that holds the functional system together
each system requires access to a master file or data covering inventory,
personnel, vendors, customers, general ledger, work in progress and so on. If the
data is stored efficiently and with common usages in mind one master file can
provide the data needed by any of the functional system. It seems logical to
gather data once, properly validate it and place it on a central storage medium
that can be accessed by any system. However it is not unusual to find a
company with multiple data files, one serving one functional system and
another serving another system.

9. Distributed data processing - The majority of the companies implementing

management information system have a geographic network of sale office,
distribution channel, manufacturing plants,divison,subdivision and so on some
of these entities are operated in a completely independent fashion and therefore
may not be part of the integrated management information system more often
than not, the remote site to have the connection with each other and with a host
of operation in order to create a effective management information system
with geographical boundaries some from of distributed data processing is
necessary. Distributed data processing can be thought of as the delivery system,
placing information in the hands of those who need it when they need it.

10. Information as a resource - Providing the entire organization must be a

concept that information is a valuable resource particularly in the management
control and strategic planning areas must be properly managed. This is a subtle
but important change in thinking. It was a common in the past to view the data
processing.

Models/ Types of Management Information Systems

1. Accounting management information systems - All levels of accounting

managers share all accounting reports. 2. Financial management information
systems - It provide financial information to all financial managers within an
organization include the chief financial officer. The chief financial officer. The
chief financial officer analyzes historical and current financial activity.
3. Manufacturing management information systems - More than any
functional area great advance in technology have impacted operations, as a
result manufacturing operations have changed. For instance, inventories are
provided just in time so that great amounts of money are not spent for
warehousing huge inventories in some instance raw material are even proceeds
on rail load cars waiting to be sent directly to the factory thus there is no need
for warehousing.

4. Marketing management information system - A marketing management

information system support managerial activity in the area of product
development, distribution, pricing decision, promotional effectiveness and sales
forecasting more than any other functional area.

5. Human resource management information system - It concern with

activity related workers, managers and other individual employed by an
organization because the personnel function relates to all other areas in business
the human resource management information system playa a valuable role in
ensuring organization system include work-force analysis and planning, hiring,
training, and job assignment.

6. Structure of management information system - The management

information system has been described in terms of support for decision making
management activity and organization functions.

7. Conceptual structure - The conceptual structure of a management

information system is defined as a federation of functional subsystem each of
which is divided into four major information processing components transaction
processing, operational control information system support, managerial control
information system, managerial control information system and strategic
planning information system which has some unique data files which are used
by only that sub system.

8. Physical structure - The physical structure of an management information

system would be identical to the conceptual structure of all applications
consisting of completely separate programs used by only one function but this is
frequently not the case substantial information can be achieved from

1 - Integrated processing
2 - Use of common modules

Integrated processing is achieved by designing several related applications as a

single system in order to simplify the interconnection and reduce the duplication
of input. A good example is an order entry system. The recording of an order
initiates a sequence of processing. Each step using new data but also most of the
data from prior processing. In other words, an integrated order entry system
crosses functional boundaries.

Management Information System Planning, Controlling and Limitations

Planning - The top level management is mainly concerned with strategic

planning for example the strategic planning activities of top management
involve future interaction between the organization and its external
environment.

Computational support for planning:

1. An analysis of historical data to obtain relationship useful for projection.

2. Various projection and forecasting techniques to estimate future value.

4. Computations internal to the plan and computation required for outputs.

5. Output of the results in a meaningful planning format.

Historical data analysis techniques

Historical data analyzed to discover pattern or relation that will be useful in
projecting the future value of significance variables. Even when the quantitative
relations are not sufficiently stable to use in forecasting data analysis is useful
for input into the judgmental forecast.

Historical extrapolation techniques

Historical data describes the past planning that involve the future estimating is
generally based on analysis of past history combined with various technique to
generate data for planning purposes.

Financial planning computation

Models that involve financial plan need to provide for various computation and
analyses commonly required for measuring or evaluating profitability example
are depreciation computation rate of return analysis and break even analysis.
Depreciation is a significant computation in most financial planning it affect
profit computation because it is an expense and it effect cash flow because of its
impact on taxes. There are several methods for computing deprecation all of
which should be available to the planner. These methods are straight line double
declining balance sum of the year digits and production or use basis.
Controlling - At the middle level management, information is management
control. Middle level managers such as departmental heads are concerned with
the current and future performance of their units. Therefore they need aggregate
information on the sales, profit etc.of their units such information is available
from both within the organization as well as outside the organization, for
example, financial data for budgets and ratio analysis are available from the
companys records. However market data can be collected through special
surveys and reports from outside the organization. Top level managers also
require management control information. But these information must be more
detailed narrower in scope and more accurate than information required for
strategic planning. It should also generate at more frequent because the time
horizon of decision is shorter.

At the supervisory level of management operational control is exercised

production scheduling, cost and credit control, etc. are examples of operational
control. Therefore a detailed report on a daily and weekly basis is required,
inventory report, operating cost, production rate, etc are examples of such
information. Such information available from with in the organization.

The control feedback loop is basic to system design. The computer can improve
the control process in several ways:

1. The standard can be complex. Computational simplifications are not

necessary.

2. The computation of deviation and identification of cause can be more

sophisticated.

3. Reporting with computers can use irregular time interval which is very
difficult with manual processing and can be done more frequently.

Limitation

1. Aggression - The people may hit back at the system and may even sabotage
it by using equipment incorrectly by putting incomplete information into the
system or buy actual destruction of hardware or software.

2. Projection - It is a psychological mechanism of blaming difficulties on

someone or something else. When employees blame the management
information system for problems caused by human error or other factors
unrelated to the system, projection is taking place.
3. Avoidance - It occurs when individuals defend themselves by withdrawing
from or avoiding a frustrating situation. Managers may avoid the system by
ignoring its output, in favour of their own information sources.

Management Information System Planning - Management information

system general business planning initiates from the following concepts :

1. Mission of the corporate.

2. Objectives and goals for the corporate in all key performance areas. These are
in line with the mission of the corporate.

3. Strategic planning for general approach on how to achieve long term

objectives.

4. Operational planning for specific guideline on how to transverse short term

milestones.
Database Management System Topics:
Introduction of Database Management System
Objectives of Database Management System
Functions of Database Management System
Purpose of Database Management System
Relational Database Overview
Object Oriented Database Concept
Data Warehousing
Introduction of Database Management System

A database management system is a complex set of software programs that

controls the organization, storage, management and retrieval of data in a
database. Database management system categorized according to the data
structure or types. It is a set of pre written programs that are use to store, update
and retrieve a database. The database management accepts request for data
from the application program and instructs the operating system to transfer the
appropriate data.
Objectives of Database Management System

An expression of database management system objectives serves and focuses

attention on the needs of the using environment and the system and
administrative requirements for meeting those needs. Some objectives of
database management system derive directly from the assumed context of
organization and management information system.

Shareability
An ability to share data resources is a fundamental objective of database
management. Rather far reaching ramifications stem from the stated objectives
of shareability

- Serving different types of users with varying skill levels.

- Handling different user views of the same stored data.
- Combining inter related data.
- .setting standards.
- Controlling concurrent updates so as to maintain data integrity.
- Co-ordinating restart and recovery operations across multiple users.
Availability
Availability means bringing the data of an organization to the user of that data.
The system which manages data resources should be easily accessible to the
people within organization making the data available when and where it is
needed and in the manner and from in which it is needed. Availability refers to
both the data and the database management system which delivers the data.
Availability function makes the database available to users defining and creating
a database and getting data in and out of the database. These are the direct
function performed by a database management system.

Evolvability
Evolvability refers to the ability of the database management system to
change in response to growing user needs and advancing technology.
Evolvability is the system characteristics system that enhances the future
availability of the data resources. Evolvability is not the same as expandability
or extensibility, which imply extending or adding to the system, which then
grows ever larger. Evolvability covers expansion or contraction, both of which
may occur as the system changes to fit the ever changing needs and desires of
the using environment.

Adaptability
Adaptability is a more advanced form of evolvability in which built in
algorithms enable a system to change itself, rather than having a change made to
it. Adaptability involves purposive, self organizing, self controlling behavior,
that is, self regulation towards a single criterion of success, it is an ultimate long
term survival. System exhibiting adaptive behavior actively seeks a particular
state or goal by changing itself in response to change in it self or its
environment.

Integrity
The three primary facets of database integrity are.

- Protecting the existence of the database.

- Marinating the quality of the database.
- Ensuring the privacy of the database.

In developing database management system, the accountants concept of

internal control has been practically ignored. Computer specialist need such
concept to improve database integrity and enhance management confidence.
Functions of Database Management System

The name database management was chosen recognizing that the different
names are in use and different types of system exist. Substantial generalization
is assumed in any database management system of interest without using it
generalized data is referred over information for the various reasons.

- Define, acquire and retire data according to the user needs.

- Provide tools to access and update the data and produce reports.

- Inform and assist users in planning and using data resources and database
management tools.

- Maintain database integrity protecting its existence, maintain its quality and
controlling access to private data.

- Monitor operations for efficient performance and integrity threats.

- It provides a building block in constructing data processing system for

application requiring database access- MIS or system for the accounting,
production and inventory control or customer support.

- It helps the DBA perform certain managerial duties.

Purpose of Database Management System

The purpose of database management system is to store and retrieve the

information in an efficient manner. The most important duty of a database is to
protect the data. Creating is also one of the purposes of the database
management system.

Creating
The needed information which is to be stored in the database is created first
using the appropriate software.

Storing
The created data are then stored up in the appropriate location in the database
file.

Protecting
The most important duty of the database is to protect the data stored.

Retrieving
Database management system derives from the data a logical record needed by
the application program.

Conclusion
We have seen briefly about the database management systems various
objectives, functions and purpose which provide a convenient accessibility in
managing the database of the management.

Entity relationship diagram

There are two entities; both of them are of the person type. There is a
relationship called, is-married-to between these two persons. In this
relationship, each of these two person entities has a role. One person plays the
role of husband and another person plays the role of wife.

The Entity- Relationship (ER) diagram

One of the key techniques in ER modeling is to document the entity and
relationship types in a graphical form called, entity relationship ER diagram
mention figure is a typical ER diagram. The entity types such as EMP and
depicted as rectangular boxes, and the relationship types such as WORK FOR
are depicted as diamond shaped box. The value sets domains such as EMP
NAME and PHONE are depicted as circles, while attributes are the mappings
from entity and relationship types to the value sets. The cardinality information
of relationship is also expressed. For example I or N on the lines between the
entity types and relationship types indicated the upper limit of the entities of
that entity type participating in that relationship.
Relational Database Overview

A database is a means of storing information in such a way that information can

be received from it. In simplest terms, a relation database is one that present
information in tables with row and columns. A table is referred as a relation in
the sense that is a collection of objective of the same type (rows).
Data in a table can be related according to common keys or concepts, and the
ability to retrieve related data from a table is the basis for the term relation
database. A database management system handles the way data is stored,
maintained, and retrieved. In the case of relationship database management
system performs these tasks. Database management system as used in this
book is a general term that includes RDBMS.

Integrity rules

Relation table follow certain integrity rules to ensure that the data they contain
stay accurate and are always accessible. First, the rows in a relational table
should all be distinct. If there are duplicate rows, there can be problem resolving
which of two possible selections the correct one is. For most DBMS the user
can specify that duplicate rows are not allowed, and if that is done, the DBMS
will prevent the addition of any rows that duplicate an existing row. A second
integrity rule of the traditional relational model is that column values must not
be repeating groups or arrays. A third aspect of data integrity involves the
concept of a null valve. A database takes care of situation where data may not be
available by using a null value to indicate that a value is missing it does not
equate to a blank or zero. A blank is considered equal to another blank, a zero is
equal to another zero, but two null values are not considered equal.
Object Oriented Database Concept

Agenda

Database
Manipulation of database
Types of database
Object oriented database
Basic concept of database management system (DBMS)
Common features of old and new database
The object oriented data model
Object oriented language
Some of the approaches to make object persistent

Database

A database is repository of collection of related data and facts, it arranges them

in a specific structure the entire collection or related data in one table is referred
to as file or a table. Each row in a table represents a record, which is a set of
data for each database entry. Each table column represents a field, which groups
each piece or item of data among the records into specific categories or types of
data.

Manipulation of Database

We may manipulate the database in one or more of the following ways.

Searching
Sorting
Merging
Performing calculation on data
Filtering
Editing the database
Report generation

Types of Database

Flat- file database

Relational database
Hierarchical database
Network database
Object oriented database

Basic concept of Database Management Systems (DBMS)

A DBMS is a program, or collection of programs that allows any number of

users to access data, modify it (if necessary) and construct simple and complex
requests to abtain and work with selected records. The biggest asset of the
DBMS , especially when it is running on powerful hardware, can find any speak
of data in an enormous database in minutes- sometimes even seconds or
fractions of a second. The management tasks in a DBMS fall into one of the
following three general categories.

1. Entering data into the database.

2. Recording records in the database.
3. Obtaining subsets of the data.

Common features of the old database are

 Uniformity
Record orientation
Small data items
Atomic fields

Uniformity
All the similarly sutured data items have the same size (in bytes).

Record orientation
The basic data items consist of fixed length records.

Small data items

Each record is mostly short.

Atomic fields
Field within the record are short and of fixed length. Each fixed length holds
only atomic values. The database introduced recently may fail to have at leas
one of the preceding features.

The new database applications include the following:

CAD (computer aided design)

CAD database stores data pertaining to engineering design including the
components of the items being designed, the relationship between the
components etc.
A CASE database stores data required to assist S/W developers. The data
include.

1. Sources code.
2. Definition and use of variable.
3. Dependencies among software modules.
4. History of software system.

Multimedia databases
Multimedia database contains images, spatial data, audio, video, etc.

Hypertext database
Hypertext database supports the ability to retrieve document based on links and
to query documents.
Object - oriented database
An object oriented database is a newer structure that has been generating a great
deal of interest in recent years. It represents very different approach to the way
data is treated by database developers and users. The object oriented structure
groups data item and their associated characteristics, attributes, and procedures
into complex items called objects. Physically an object can be anything a
product, or event such as a house, an appliances, an art piece, a customer
complaints, or even a purchase, an objects is defined by its characteristics
attributes and procedures. An object characteristics can be text, sound, graphics,
and video. Examples of attributes might be color, size, style, quantity, and price.
A procedure refers to the processing or handling that can be associated to the
object.

The Object Oriented Data Model

1. Object structure
2. Object classes
3. Inheritance
4. Multiple
5. Object identity
6. Object containment

Object oriented languages

The concept of object oriented data model are incorporated into language that is
used to manipulate the.

Possible languages into which the object oriented feature can be integrated
are:
Data manipulation language.
Persistent programming languages.

Persistent programming languages

Object oriented programming language can be extended to deal with database
such languages are called persistence programming languages.

Persistent data
Data that continue to exist even after the program that created it has terminated.

Persistence of objects
Object oriented programming language has the concept of objects, which are
transient i.e. they vanish when the program terminates. If we wish to turn such a
language into a database programming language, first step to provide a way to
make objects persistent.
Data Warehousing

Advantages of Data Warehouse

A data warehouse provides a common data model for all data of interest
regardless of the datas source. This makes it easier to report and analyze
information than it would be it multiple data models where used to retrieve
information such as sales invoices order receipts, general ledger charger, etc.

Prior to loading data into the data warehouse, inconsistence are identified and
resolved. This greatly simplifies reporting and analysis.

Information in the data warehousing is under the control of data warehouse

users so that even if the source system data is purged over time, the information
in the warehouse can be stored safely for extended period of time. Data
warehousing can work operational system, data warehousing provide retrieval
of data without slowing down operational system.

Data warehouse facilitate decision support system applications such as trends

report ( e.g the items with the most sales in a particular area within the last two
years),exception reports that show actual performance versus goals,
consolidated /standardized comprehensive, rapidly available information.

Features of Data Mining

i) Provides insight into hidden patterns and relationships in your data.

A classic example of data mining is a retailer who uncovers a relationship
between sales of diapers and beer on Sunday afternoons- two items you
wouldnt normally consider as linked. The explanation is that husbands who are
sent out to pick up a fresh supply of diapers are also likely to pick up some beer
while they happen to be in the store something that hadnt been recognized as
a significant sales driver before data mining uncovered it.

ii) Enables you to exploit these correlations to improve organizational

performance.
Continuing the example above, very often retailers act on the relationships they
discover by using tactics such as placing linked items together on end-of-isle
displays as a way to spur additional purchases. All organizations can benefit
from acting in a similar way using newly discovered patterns and correlations
as the basis for taking action to improve their efficiency and effectiveness.

iii) Provides indicators of future performance.

Those who do not learn from history are doomed to repeat it is a famous
quote from philosopher George Santayana. In the case of data mining, being
able to predict outcomes based on historic data can dramatically improve the
quality and outcomes of decision making in the present. As a simple example, if
the best indicator of whether a customer will pay on time turns out to be a
combination of their market segment and whether or not they have paid
previous bills on time, then this information you can usefully benefit from in
making current credit decisions.

Advantages of Data Mining

Marketing / retailing
Data mining can aid direct marketers by providing them with useful and
accurate trends about their customers purchasing behavior. Based on these
trends, marketers can direct their marketing attentions to their customers with
more precision. For example, marketers of a software company may advertise
about their new software to consumers who have a lot of software purchasing
history. In addition, data mining may also help marketers in predicting which
products their customers may be interested in buying. Through this prediction,
marketers can surprise their customers and make the customer's shopping
experience a pleasant one.

Retail stores can also benefit from data mining in similar ways. For example,
through the trends provided by data mining, the store managers can arrange
shelves, stock certain items, or provide a certain discount that will attract their
customers.

Banking / crediting
Data mining can assist financial institution in areas such as credit reporting and
loan information for example, by examining previous customers with similar
attributes, a bank can estimate the level of risk associated with each given loan.
In addition, data mining can also assist credit cards issuers in detecting
potentially fraudulent credit card transaction. Although the data mining
technique is not 100% accurate in its prediction about fraudulent charges, it
does help the credit card issuers reduce their losses.
Law enforcement
Data mining can aid law enforcers in identifying criminal suspects as well as
apprehending these criminal by examining trends in location, crime type, habit,
and other patterns of behaviors.

Researchers
Data mining can assist researchers by speeding up their data analyzing process
thus, allowing them more time to work on other projects.
Decision Making Topics:
Definition of Decision Making
Types of Decision Making
Objects of Decision Making
Advantages of Decision Making
Group Decision Making
Phases of Decision Making Process
Models of the Decision Making Process
Steps in the process of Decision Making
Information System
Components of Decision Support System
Function of Decision Support System
Definition of Decision Making

A decision is a choice made between two or more available alternatives

decision making is a process of choosing the best alternative for reaching
objectives decision making is covered in the planning section of this text
managers must also make decision when performing the other three managerial
function-organizing, influencing, and controlling- the subject requires a separate
chapters.

Managers make decision affecting the organization daily and communicate that
decision to other organizational members. Not at all managerial decision is
equal significance to the organization, some affect the large number of
organization members, cost a great deal of money to carry out, or have a long
term effect on the organization.
Types of Decision Making

There are two types of decision making:

- Programmed decision making

- Nonprogrammed decision making

Programmed decision making - Programmed decisions are routine and

repitative, and the organization typically develops specific ways to handle them.
A programmed decision might involve determining how product will be
arranged on the selves of the supermarket. For this kind of routine, repetitive
problem, standard-arrangement decisions are typically made according to
established management guidelines.

Nonprogrammed decision making - Nonprogrammed decision, in contrast is

typically on shot decision that are usually less structured than programmed
decision. An example of the type of nonprogrammed decision that more and
more and more managers are having to make is whether a supermarket should
carry an additional type of bread.

Objects of Decision Making

Problem finding - Problem finding, as part of the intelligence phase, in

conceptually defined as finding a difference between some existing situation
and some desired state. This is compared to reality, difference and identified and
the difference are evaluated as to whether they constitute a problem.

Organizational models

1. Historical models in which the expectation is based on an extrapolation of

past experience.

2. Planning models in which the plan is expectation.

3. Models of other people in the organization, such as superiors, subordinates,

other departments etc.

4. Extra organizational models in which expectations are derived from

competition, customers and professional organization.

Problem formulation
There is always a significant danger, when a problem is identified, as solving
the wrong problem. The purpose of problem formulation is to clarify the
problem, so that design and choice activities operate on the right problem.

1. Determining the boundaries i.e. clearly identifying what is included in the

problem.

2. Examining changes that may have precipitated the problem.

3. Factoring the problem into smaller sub problems.

4. Focusing on the controllable elements.

Development of alternative - A significant part of the process of decision

making is the generated of alternatives to be considered in the choice phase.
The act of generating alternative is creative and creativity may be taught. Basic
creativity may be also be enhanced by alternative generation procedure and
support mechanisms. The creative process requires that there be adequate
knowledge of the problem area and its boundaries domain knowledge and
motivation to solve the problem.
Advantages of Decision Making

Life is full of difficult decision for us to make, and no matter how simple we try
to make our lives, how many self help books or articles we read, how much we
try to learn from other peoples experience, etc.we always end up confronted
with a hard decision to make. There simply is no escape from it.
Group Decision Making

Abstract
Many managers like to believe that they are accomplished in such group
decision making processes as action planning goal setting and problem setting
and problem solving. However their ability to implement such techniques
effectively is often hindered by their lack of understanding of the dynamics of
these group decision making processes. As a result these managers often end
up perpetuating problems that they themselves create through their insensitivity
to the needs of other group members.

Decision by lack of response (the plop method)

The most common and perhaps least visible- group decision making method is
that in which someone suggest an idea and before anyone else has said anything
about it someone else suggests another idea until the group eventually finds one
it will act on.
Decision by authority rule
Many groups start out with-or quickly set up-a power structure that makes it
clear that the chairman or someone else in authority will make the ultimate
decision. The group can generated ideas and hold free discussion but at any time
the chairman may say that having heard the discussion, he or she has decided
upon a given plan.

Decision by minority rule

One of the most often heard complaints of group members is that they feel
railroaded into some decision usually this feeling result from one , two, or three
people employing tactics that produce decision and therefore must be
considered decision but which are taken without the consent of the majority. A
single person can enforce a decision particularly if he or she is in some kind of
chairmanship role by not giving opposition an opportunity to build up.

Decision by majority rule (voting and polling)

More familiar decision making procedures are often taken for granted as
applying to any group situation because they reflect our political system. One
simple version is to poll everyones opinion following some period of
discussion. If the majority of participants feel the same way, it is often assumed
that is the decision. The other method is the more formal one of stating a clear
alternative and asking for votes in favor of it, votes against it, and abstentions.

The better way

Because there are time constrains in coming to a group decision and because
there is no perfect system, a decision by consensus is one of the most effective
methods. Unfortunately, it is also quit important to understand that consensus is
not the same thing as unanimity. Rather it is states of affairs where
communication have been sufficiently open and the group climate has been
sufficiently supportive to make everyone in the group feel that they have had
their fair chance to influence the decision.

What are the actual steps in a decision made by a group?

1. Identify the problem

2. Clarify the problem
Phases of Decision Making Process

Phase 1 - Identification
This is the first phase in the decision making process. It involves identification
and the clear definition and formulation of the problem. In this phase a written
problem statement is prepared, which specifies the nature and magnitude of the
problem. It is necessary to determine how important and urgent the problem is
not well defined, the decision instead of solving the problem may complicate it.
This phase requires the manager to use his imagination, experience and
judgment in order to identify the real nature of the problem.

Phase 2 - Analysis
The second phase of the decision making process involves determining the
causes and scope. The problem should be classified to determine the futurity,
periodicity and impact of the decision required as well as limiting or strategic
factor relevant to the decision. The most important part in this phase is to find
out the real cause or source of the problem. Analyzing the real problem implies
knowing the cause of gap between what is and what should be and
understanding the problem in relation to the objectives of organization. In some
cases all the required information might not be available. In such a case, the
manager has to judge the risk involved in the decision.

Phase 3 - Search
After defining and analyzing the problem, the next phase of the decision
making process involves the search for the several possible alternatives. A
problem can be solved in several ways all of which are not equally good. A wide
range of alternative should be prepared this also increase the managers freedom
of choice. This is done in order to ensure effective decision making but it is
advisable for the manager to limit his discovery of those alternative which are
strategic or critical to the problem.

Phase 4 - Selection
The forth phase of the decision making process deals with comparing and
scrutinizing the various developed alternative to identify the pros and cons of
each. Also this phase requires certain criteria like feasibility, cost, organizational
goals, risk, timing, economy of effort, limitation of sources etc.

Phase 5 - Selection
The last phase is the most critical part of the decision making process. A wrong
choice would negate all effort made in the previous steps. The judgment may be
influenced by the intuition and personal value system of the decision maker. The
selected solution must be acceptable to those who must implement it and who
are affected by it.
Models of the Decision Making Process

Models are the tools of the decision making process which help the managers
to assess the situations before they have happened by mimicking the real
experiences and situation, without the expense of developing the situation for
real. Here the decision makers use simulation to try to mimic the way that the
firm or elements within the firm, will respond to changes in operating
characteristics sometimes mathematical techniques such as queuing theory or
linear programming are applied to mimic the real life situation.

Models can be classified into various categories

- Conceptual models
- Iconic models
- Analog models
- Schematic models

Conceptual models
Conceptual models are those formed through our experience, knowledge and
intuition. They are further subdivided as

- Descriptive models - Verbal models - Mental models

Descriptive models represent a higher level of conceptualization and may be

articulated and communicated.

Iconic models
Iconic models are those that resemble what they represent, although the
properties of an iconic model may not be the same as those of the real system it
represent iconic models include physical and pictorial models.

Analog models
Analog models are those that are built to act like real system, although they look
different from what they represent. These models employ one set of properties
to represent some other set of properties possessed by the real system. An
artificial kidney dialysis machine that provides life support is an example of an
analog model.

Symbolic models
Symbolic models use symbols to designate the components of a system and
relationship among those components. They are abstract models in which
symbols are substituted for systems characteristics.

They are of three types:

- Graphical representation
- Schematic models, and
- Mathematical equations
Steps in the process of Decision Making

1. Identifying and diagnosing the real problem

Understanding the situation that sets the stage for decision making by a manager
is an important element in decision making. Pre determined objectives past acts
and decision and environment consideration provide the structure for current
decisions. Once this structure is laid, the manager can proceed to identify and
determine the real problem.

2. Discovery of alternatives
The next step is to search for available alternatives and assess their probable
consequences. But the number of forces reacting upon a given situation is so
large and varied that management would be wise to follow the principle of the
limiting factor. That is management should limit itself to the discovery of those
key factors which are critical or strategic to the decision involved.

3. Analysis and evaluation of available alternatives

Once the alternatives are discovered, the next stage is to analyze and compare
their relative importance. This calls for the listing of the pros and cons and
different alternatives in relation to each other. Management should consider the
element of risk involved in each of them and also the resources available for the
implementation.

4. Selection of alternatives to be followed

Defining the problem, identifying the alternatives and their analysis and
evaluation set the stage for the manager to determine the best solution. In this
matter, a manager is frequently guided by his past experience. If the present
problem is similar to one faced in the past, the manager has a tendency to decide
on the basis past experience is a useful guide for the decision in the present. But
it should not be followed blindly. Changes in the circumstances and underlying
assumption of decisions in the past should be carefully examined before
deciding a problem on the basis of experience.

5. Communicate of the decision and its acceptance by the organization

Once decision is made, it needs to be implemented. This calls for laying down
derivative plans and they communicate to all those responsible for initiating
action on them. It will be better if the manager takes into account beliefs,
attitude and prejudices of people in the organization and is also aware of his
own contribution to implantation of the decision. It is further required that
subordinates are encouraged to participate in decision making process so that
they feel committed and morally bound to support the decisions.
Information System

An information system differs from other kinds of system in that its objectives
is to monitor/document the operations of some other system which we can call a
target system an information system cannot exist without such a target system.

Areas of work
Information system has a number of different areas of work:

- Information system strategy

- Information system management
- Information system development

Each of which branches out into a number of sub disciplines, that overlap with
other science and managerial disciplines such as computer science, pure and
engineering sciences, social and behavioral sciences and business management.

Types of Information Systems

Information system can be classified in many ways, but for our purposes here,
we will consider their classification based on the model of processing, on the
system objectives, and on the nature of interaction of the system with its
environment.

Individual and Organizational Decision Making Process

Meaning
Decisions taken by a single individual are called individual decision.
Organizational decisions are those taken by a group of persons. Organizational
decision making is considered better because the knowledge and imagination of
a group is better than individual. Organization decision making also factors co-
operation and co-ordination in the organization. But group decision are those
which an executive takes in his official capacity and on behalf of the
organization.

Models
There are three models in decision making process they are as follows:

(i) Rational Model

Rational model is based on optimal choice that would maximize value for the
organization. The manager is assumed to be an objective, totally informed
person who would select the most efficient alternative, and maximize whatever
amount and type of the values.

(ii) Administrative Model

The quest for a more realistic description of organization decision makes a
variation called administrative. This model allows decision makers with
different degree of motivation and find shortcut for acceptable solution. Under
this model no optimizing if decision making instead satisfaction by choosing the
best from two or more when a decision has been made, the solution to the
problem is found to be acceptable than ornaganisation institutionalized the
procedure called standard operating procedure. Its rules, progress and routine
are invoked by manager to gain time and avoid problems that occur. Sops are
not always the time savers as they are supposed to be. Problems are broken
down and assigned to specialized units within the organization that develop
goals. These goals are termed as sub goals that may not agree with the overall
goals. This phenomenon is called local responsibility.

(iii) Political Model

The contrast to the rational model, players in the political model often referred
to as incremental do not focus on a single issue but on many intra organizational
problem that reflect their personal goals. This concept of decision making as a
political process empathizes the natural multiplicity of goals, value and interest
in a complex environment. The political model views decision making as a
process of conflict resolution and census building and decision as products of
compromise.

Features

1. Decision making is a process of selection, which aim to result a best

alternative.
2. It aims to achieve the objectives of the organization.

3. It involves the evolution of alternative, only through evaluation one can come
to know the best alternative.

4. Decision making is a mental process, because the final selection is made after
a thorough consideration.

5. It involves certain commitments.

Components of Decision Support System

A Decision Support System consist of two major sub-system- human decision

making and computer system. Interpreting a Decision Support System as only
a computer hardware and software system is a common misconception. An
unstructured or semi structured decision by definition can not be programmed
because its precise nature and structure are elusive and complex Simon 1960.
the function of a human decision maker as a component of Decision Support
System is not to enter data to build a database, but to exercise judgment or
intuition throughout the entire decision making process. Imagine a manager
who has to make a five year production planning decision, the first step to the
decision making process begins with the creation of a decision support model
using an integrated Decision Support System program Decision Support
System generator such as Microsoft excl lotus 1-2-3 interactive financial system
IFPS/personal or

Express /PC the user interface sub-system or dialogue generation or

management system is the getaway to both database management system and
model-based management system.DBMS are set of computer programs that
create and manage the database, as well as control access to the data stored
within it. The DBMS can be either an independent program or embedded with
in a Decision Support System generator to allow user to create a data base file
that is to be used as an input to the Decision Support System. DBMS is a set of
computer program embedded within a Decision Support System generator that
allow user to create, edit, update, and/ or delete a model. Users create models
and associated database file to make specific decision the created model and
database are stored in the model base and database in the direct assess storage
device such as hard disks. From a users view point the user interface subsystem
in the only part of Decision Support System components with which they have
to deal.

Todays decision support system generator provide the user with a wide variety
of interface modes styles menu based interaction mode command language style
question and answer interaction natural language processing based dialogue,
and graphical user interface use icon, button, pull down menus, bars and boxes
extensively and have become the most widely implemented and versatile type.
The interface system allows users access to.

1. The data sub-system:

(a) database
(b) database management software; and

2. The model sub-system:

(a) model base
(b) model base management software.
Function of Decision Support System

Decision Support System provide varying analysis without much programming

efforts and usually directed towards non technical users/manager. Managers
main use for a Decision Support System include searching retrieving and
analyzing decision relevant data to allow them to summarize main points which
assist them in making more informed and educated decisions. Users often
search for correlation between data without rewriting the underlying MIS or
software application and most Decision Support System allows graphic
capability which not only allows Trent analysis and alternative scenarios to
answer what if queries consequently, Decision Support System supports both
tactical and strategic decision and are employed to leverage managers expertise
in a certain field.

Decision Support System varies in scope- some are intended for multiple users
more common nowadays and other is stand alone units common in the past in
addition to that, Decision Support System can take a many different forms and
can be used in many different ways i.e. some Decision Support System focus
on modes. Other on data and other on communication the better the manager
understand the different categories, scope and uses of Decision Support
System the better he will be able to specify requirements for a Decision
Support System that he wants to implement or buy.
Decision Support System provides varying analysis without much
programming efforts and is usually directed towards non technical
users/managers. Managers main uses for a Decision Support System include
searching retrieving and analyzing decision relevant data to allow them to
summarize main points which assist them in making more informed and
educated decision user often search for correlation between data without
rewriting the underlying MIS or software application and most Decision
Support System allows graphic capability which not only allows trend analysis
and reporting for top executive, but also assists managers in mapping out
conjoint analysis and alternative scenario to answer what is quires.
Consecuenlty, Decision Support System support both tactical and strategically
decision and are employed to leverage managers expertise in a certain field.

Decision Support System varies in scope- some are intended for multiple users
more common nowadays and other is stand alone units common in the past. In
addition to that can take on many different forms can be used in many different
ways i.e. some Decision Support System focus on models, other on
communication the better the manager understand the different categories,
scope and uses of Decision Support System the better he will be able to specify
requirement for a Decision Support System that he wants to implement or buy.
Strategic Planning Topics:
Features of Strategic Planning
Purpose of Strategic Planning
The Advantages of Strategic Management
Analysis of Organizational Information Requirements
Define and Evaluate Information Requirements for Organizational
Subsystem
Limitation of Management Information System
Development and Implementation of Managerial Information System
Implementation of Managerial Information System
Features of Strategic Planning

1. They are proactive and non re-active.

2. They are internal in source, and the business venture has absolute control
over their application.

3. Strategy can apply once after that it is process of application with no unique
element remaining.

4. The outcome is normally a strategic planning which is used guidance to

define functional and divisional plan including technology, marketing etc.
5. Strategic planning is the formal consideration of an organizations future
course. All strategic planning deals with al least one of three keys question

a) What do we do?
b) For whom do we do it?
c) How do we excel?

In business strategic planning the third question is better how can we beat or
avoid competition? In many organizations this is viewed as a process for
determining where an organization is going over the next year or more-
typically 3 to 5 years, although some extended their vision to 20 years.
Purpose of Strategic Planning

1. Clearly define the purpose of the organization and establish realistic goal and
objectives consistent with that mission in a defined time frame within the
organizations capacity for implementation.

2. Communicate those goals and objectives to the organization constituents.

3. Develop a sense of ownership of the plan.

4. Ensure the most effective use in made of the organization resources by

focusing the resources on the key priorities.

5. Provide a base from which progress can be measured and establish a

mechanism for informed change when needed.

6. Bring together everyones best and most reasoned efforts to have important
value in building a consensus about where an organization is going.

7. Provide cleaner focus of organization producing more efficiency and

effectiveness.

8. Bridges staff and board of directors in the case of corporation.

9. Builds strong teams in the board and the staff in the case of corporation.

10. Provides the glue that keeps the board together in case of corporation.
11. Produce great satisfaction among planners around a common vision.

12. Increase productivity from increased efficiency and effectiveness.

13. Solves major problems arising in the business.

The Advantages of Strategic Management

Discharge board responsibility - the first reason that most organization state
for having a strategic management process is that it discharges the responsibility
of the board of directors.

Facilitate an objective assessment - Strategic planning provide a discipline

that enables the board and senior management to actually take a step back from
the day to day business to think about the future of the organization without this
discipline the organization can become solely consumed with working through
the next issue or problem without consideration of the larger picture.

Provide a framework for decision making - Strategy provide a framework

within which all staff can make day to day operational decisions and understand
that those decision are all moving the organization in a single direction it is not
possible nor realistic or appropriate for the board to know all the decision the
executive director will have to make nor it is possible nor realistic or practical
for the executive director to know all the decision the staff will make. Strategy
provides a vision of the future confirm the purpose and values of an
organization, sets objectives, clarify threats and opportunity determines methods
to leverage strengths, and mitigate weaknesses at a minimum. As such it sets a
framework and clear boundaries within which decision can be made.

Support understanding and buy-in - Allowing the board and staff

participation in the strategic discussion enables them to better understand the
direction why that direction was chosen, and the associated benefits. Fore some
people simply knowing is enough for many people to gain their full support
requires them to understand.

Enables measurement of progress - A strategic management process forces an

organization to set the objectives and measures of success the setting of
measures of success requires that the organization first determine what is critical
to its ongoing success and then forces the establishment of objectives and keeps
these critical measures in front of the board and senior management.

Provides an organizational perspective - Addressing operational issues rarely

looks at the whole organization and the interrelatedness of its varying
components. Strategic management takes an organizational perspective and look
at all the components and the interrelationship between those components in
order to develop a strategy that is optimal for the whole organization and not a
single component.
Analysis of Organizational Information Requirements

Information requirements are the prerequisites in an organization for

information system, planning identifies application and planning an information
architecture. More detailed information requirement are required for design of
application. Although the level of specification is different for the organization
and applications many of the methods for obtaining requirements are the same.

The method is a synthesis of several existing approaches. In this method

obtaining organizational information requirements consists of several steps.

Define underlying organizational subsystem

The first phase of analysis is to define underlying organization subsystem. The
purpose of activity subsystem identification is to subdivide requirement
determination by major organization activity and make the process more
manageable. For the home leasing company, the major subsystem are:

- Credit
- Leasing
- Maintenance
- Eviction and delinquency
- Marketing
- Advertising
- Accounts receivable and collection
- Corporate accounting
- Market and product analysis
- Client reporting
- Appraisal
- Insurance
- Sales
- Personnel
- Inspection
- Audit
- Inventory
- Legal

These subsystems are obtained by an interactive process of discussing all

organization activities with managers and defining the activity as belonging to
broad categories of subsystem. As new activities are considered, they are placed
in previously defined categories or a new category is created.

Develop subsystem manager matrix

Once the underlying organizational subsystems are defined the next step of the
organizational subsystem.
The matrix is prepared by reviewing the major decision making responsibility
of each middle top level manager and association decision making with specific
subsystem. The purpose of this step is to clarify responsibilities and identify
those managers to be interviewed relative to each subsystem.
Define and Evaluate Information Requirements for
Organizational Subsystem

This step obtains the information requirements of each organizational subsystem

by group interview of those managers having major decision making
responsibility for the subsystem merely asking managers to define their
information requirements is frequently not satisfactory because of the limitation
on humans as information processor.

- what problem do you have and what information is needed for solving them?

- what decision do you make and what information do you need for decision
making?

- what factors are critical to the success of your activity and what information
do you need to achieve success in them or monitor progress?

- what resources are used in producing the end what information is needed to
measure efficiency in use of the resources.

Statement of purpose - the first step of the interview is to get the managers to
define a statement of purpose for the subsystem under consideration for
example, the purpose of maintenance was defined as maintain rental property at
satisfactory level with minimal cost and process vendor payments.

Subsystem mapping - the step of the group interview is to define the

relationship of the subsystem to all other subsystem internal to the organization
or entities external to the organization. It is constructed by drawing subsystem
under consideration in the center of a chalkboard or flip chart pad and by
drawing around it the subsystem and entities with which it interacts.

Question to elicit requirements - after the subsystem mapping is complete,

information requirements are elicited using the three set of question

Define major information categories and classify information requirements :

Develop information subsystem matrix - The information categories are used

to create a matrix showing which subsystem use an information category.
Rough measures of importance and current availability are specified . the matrix
is used to define and information architecture for categories of information.

Resource requirements - the business requirements which define the high level
customer objectives and vision for the system, are used to determine the scope
of the system. When capturing the business requirements, it is essential that the
project team look at all aspects of the system, including

Functional Requirements - Describing processes and tasks that the consumer

must be able to accomplish through the use of the system. These can typically
be categorized as process that require action an the part of consumer data entry
selection of a system command etc, and those that are not directly related to
human interaction with the system for example off hours processing or the
automated exchange of information between systems.

Technical Requirements - Identifying technical aspects and constrains that

must be considered when defining the new system. Consideration may include
accessibility needs of consumers whether or not the storage and many factors
may impact your choice of approach to follow them developing a system.

Operational Requirements - Specifying may administrative constraints or

expectation that must be supported by the system in a production environment
may include the system performance expectation, technical infrastructure
constraints, security mechanism that must be followed the need to regularly
achieve data, and many mandated audit and control process.

Transitional Requirements - defining the realm of condition that must be

satisfied prior to physically implemented the system in a production
environment or to relegating support responsibilities to the performing
organization. Data conversion requirements and development and delivery of
consumer training programs and materials fall into this category.
Limitation of Management Information System

Although the management information system is becoming interestingly

beneficial some cases even essential to the management of the organization that
very thing that makes it so attractive has also made it difficult to design and
implement. These system are expensive both in term of people needed to
develop them and in term of computer hardware to support them, unfortunately
they also have had a tendency to cost more and require more time than
estimated. The system become rapidly obsolete with changing management
objective, competitive environment and technological advances it can be
difficult and expensive once they installed. A major system can have disastrous
effect on the organization man and machine, which are not always compatible
combination.
Development and Implementation of Managerial Information
System

Managerial information system is an efficient tool of acquisition of real time

information on companys internal process with the option of statistical
processing generating reports for evaluation and decision making correct
interpretation of these results is important for management to the same extent as
correctness of collected data analysis and presentation available for purpose of
decision taking process. This system represents upgrade to system existing in
society which integrated. Corporate information sources at required quality
level and sufficiently detailed.

In conclusion, our management information system solutions provide:

- Simple and fast access to data of various sources both internal and external
without data amount limitation.

- Running of pre processed reports and generation of ad-hoc queries.

- Data analysis from various aspects and e.g time comparison of data product
structure analysis.

- Broad range of analysis and calculation function allowing to analyze trends,

compare different time periods identify critical situations transfer information
into applications etc.

System Development Life Cycle

The material in this section is organized according to a generic system

development life cycle. While no two development efforts are exactly alike, all
projects should progress through the same six phases.

1. System initiation- in which the business case and proposed solution

developed during project origination are re-examined to ensure that they are still
appropriately defined and address an existing organizational need. This
validation efforts provides the project team the basis for a detailed schedule
defining the step needed to obtain a through understanding of the business
requirement and an initial view of staffing needs. In addition a high level
schedule is developed for subsequent system development lifecycle phases.

2. System requirements analysis- in which the needs of the business are

captured in as much detailed the project manager leads the project team in
working with the customers to define what it is that the new system must do. By
obtaining a detailed and comprehensive understanding of the business
requirements the project team can develop the functional specification that will
drive the system design.

3. System design- which builds upon the work performed during system
requirements analysis and result in a translation of the functional requirements
into a complete technical solution. This solution dictates the technical
architecture, standards, specification and strategies to be followed. Throughout
the building, testing, and implementation of the system the completion of
system design also marks the point in the project at which the project manager
should be able to plan in detailed all future project phases.

4. System construction- throughout which the project team builds and tests
various modules of the application including any utilities that will be needed
during system acceptance and system implementation as system components are
built they will be tested both individually and in logically related and integrated
grouping until such time as a full system test has been performed to validate
functionally. Documentation and training materials are also developed during
this phase.

5. System acceptance- during which the focus of system validation efforts

shifts from those team members responsible for developing the application to
those who will be ultimately use the system in the execution of their daily
responsibilities. In addition to confirming that the system meets functional
expectation, activities are aimed at validating all aspects of data conversion and
system deployment.

6. System implementation- the final phase of the life cycle which comprises all
activities associated with the deployment of the application. These efforts
include training, installation of the system in a production setting and transition
of ownership of the application from the project team to the performing
organization.
Implementation of Managerial Information System

The implementation of information technology is a complex task and needs a

detailed and careful planning for successful implementation. A long range
management information system plan provides direction for the development
of the system and provides a basic for achieving the specific targets or tasks
against a time frame.

1. Environmental modeling center - the environmental modeling centre

improves numerical weather, marine and climate predictions at the national
centre for environment prediction through a broad program of research in data
assimilation and modeling in support of the NCEP develops improves and
monitors data assimilation systems and models of the photosphere atmosphere
ocean and coupled system using advance methods developed internally as well
as cooperatively with scientists from universities national laboratories and other
government agencies and the international scientific community.

2. Enterprise information system - an enterprise information system is

generally a kind of computing system that is of enterprise class this means
typically offering high quality of service dealing with large volumes of data and
capable of supporting some large organization an enterprise.
3. Informs - the institute for operational research and the management science
INFORMS is an international society for practitioners in the field of operations
research and management science. It was established in 1995. According to
INFORMS constitution the institutes purpose is to improve operational
processes decision making and management by individual and organization
through operational research the management science and related scientific
methods.

4. Information processing system - an information processing system is made

up of four basic parts, or sub-system.

- input
- processor
- storage
- output

First, information in the form of gravitational force from the earth serves as
input to the system we call a rock. At a particular instant the rock is a specific
distance from the surface of the earth traveling at that instant only may be
considered stored in the rock.

5. Development of managerial information system - management

information system is based on an author co-citation analysis. The resulting
mapping is intended to serve as a bench mark for future assessment of
management information system as a field as well as a means for
documenting the emergency of new research specialties. The study sought to
identify.

6. System/information engineering and modeling - as a software is always of

a large system or business work begun by establishing the requirements for all
system elements and then allocating some subset of these requirements to
software. This system view is essential when the software must interface with
other elements such as hardware, people and other resources.

7. Software requirement analysis - the process is also known as feasibility

study in this phase the development team visits the customer and studies their
system. They investigate the needs for possible software automation in the
given system by the end of feasibility study, the team furnishes a document that
holds the different specific recommendation for the candidate system. It also
includes the personnel assignment, costs, project schedule, target dates etc.
8. System analysis and design - in this phase the software development
process, the softwares overall structure and its nuances are defined in terms of
the client/server technology, the number of tiers needed for the package
architecture the data base design the data structure design etc.

9. Code generation - the design must be translated into a machine readable

form. The code generation step performs this task. If the design is performed in
a detailed manner, code generation can be accomplished without much
complication. Programming tools like compliers, interpreters, debuggers etc.

10. Testing - once the code is generated, the software program testing begins.
Different testing methodologies are available to unravel the bugs that were
committed during the previous phase. Deferent testing tools and methodologies
are already available. Some companies build their own testing tools that are
tailor made for their own development operations.

11. Maintenance - the software will definitely undergo change once it is

delivered to the customer. There can be many reasons for this change to occur.
Change could happen because of some unexpected input values into the system.

Prototyping Model

This is a cycle version of the linear model. Once the requirement analysis is
done and the design for a prototype is made the development process gets
started. Once the prototype is created, it is given to the customer for evaluation.
The customers test the package and given his/her feedback to the developer who
refines the product according to the customers exact expectation. After a finite
number of iteration, the final software package is given to the customer in the
methodology; the software is evolved as a result of periodic shuttling of
information between the customer and developer. This is the most popular
development model in the contemporary IT industry.

Rapid Application Development Model

The RAD model is a linear sequential software development process that

emphasizes an extremely short development cycle. The RAD model is a high
speed adaptation of the linear sequential model in which rapid development is
achieved by using a component based construction approach. Used primarily for
information system application the RAD approach encompasses the following
phases.
1. Business modeling - The information flow among business functions is
modeled in a way that answer following question.

-what information drives the business process?

-what information is generated?
-who generate it?
-where does the information go?
-who processes it?

2. Data modeling - The information flow defined as a part of the modeling

phase is refined into a set of data objects that are needed to support the business.
The characteristic called attribute of each object is identified and the
relationships between these objects are defined.

3. Process modeling - The data objects defined in the data modeling phase are
transformed to achieve the information flow necessary to implement a business
faction. Processing the description is created for adding, modifying deleting or
retrieving a data object.

4. Application Generation - The RAD model assumes the use of the RAD
tools like VB, VC++, and Delphi etc... rather than creating software using
conventional third generation programming languages. The RAD model works
to reuse existing program components (when possible) or create reusable
components (when necessary). In all cases, automated tools are used to facilitate
construction of the software.

5. Testing and Turnover - Since the RAD process emphasizes reuse, many of
the program components have already been tested. This minimizes the testing
and development time.

E-Commerce Topics:
Introduction of E-Commere
The Advent of E-commerce
Types of E-commerce
 The Scope of E-commerce
Supply Chain Application
What is E-commerce?
Advantages of E-commerce
The Business Model
Developments in Supply Chain Management
Business-to-business transactions in E-commerce
Business-to-consumer transaction in E-commerce
Electronic Data Interchange (EDI)
Introduction of E-Commere

The astonishing growth of internet and particularly the world wide wed has led
to a critical mass of customer and companies participating in a global on-line
market place. Business owners around the world are increasingly turning to
internet to increase the efficiency and profitability. A large number of companies
have come to the net to maintain a electronic presence, market products,
generate sales leads, provide customer support and open up electronic stores
that can be accessed by the internet users. Some benefit are enjoyed by these
companies include lower purchasing cost, lower overheads etc. the internet also
provides to be a great equalizer, allowing the smallest companies to compete
against the giants in the industry.
The Advent of E-commerce

Electronic commerce is a general term applied to use of computers and

telecommunication technologies to support trading in goods and services. It is
defined as any from of business transaction in which the parties interact
electronically rather than by physical exchanges or direct physical contact. In
other words, it is a term for buying, selling, ordering, or delivering something
electronically. The general idea about e-commerce is that it means online
shopping.

Types of E-commerce

Business-to-business (B2B)
The internet can connect all business all business to each other, regardless of the
location or position in the supply chain. This ability presents a huge threat to
traditional threat to wholesaler and brokers. This category has been well
established for several years.

Business-to-consumers (B2C)
The business-to-consumers is focused on the use of a virtual of the World Wide
Web that allows an internet user to browse and order goods or services from
storefronts online catalogue. This category largely equates to electronic
retailing.

Business-within-business (intra-company)
Companies suited around the world are now implementing the applications of
web based technology to improve and transform their business communication
and processes. The-business-within-business e-commerce takes the intranet
beyond its popular role as a corporate and product information center.
The Scope of E-commerce

E-commerce encompasses a broad range of activities. The core component

includes trading of physical goods and services. The conventional activities
include.

Searching for product information

Ordering product
Paying for goods and services
Customer service

E-commerce also includes the business activities:

Pre-sales and post sales support

Internal electronic mail and massaging
Online publishing of corporate documents and forms
Managing corporate finance and personal systems
Manufacturing logistic management
Supply chain management for inventory
Facilitation of contact between traders
Tracking orders and shipments
Advertising and promotion of products and services

E-commerce beneficiaries:

Benefit to customers
 Access to more information
Rapid response to needs
Lower cost and prices
Global choice
Easier market research and comparison
Benefit and opportunities to suppliers
Shortened supply chain
Substantial cost saving
Mass customization
Global presence
Competition on specialty
Improved competitiveness
Supply Chain Application

Supply chain application delivering the right product to the right place, at the
right time and at the right price is one of the most powerful engines of business
transformation. Supply chain application is a concept that is well known and
well used throughout the business world today. It has brought along many
changes in business that has produced long term benefits for companies and,
most importantly, consumers.

Definition

Supply chain application is the oversight of materials, information, and

finances as they move in a process from supplier to manufacture to wholesaler
to retailer to consumer. Supply chain management involves coordinating and
integrating these flows both within and among companies. It is said that the
ultimate goal of any effective supply chain management system is to reduce
inventory.

Supply chain management flows can be divided into three main flows.

The product flow

The information flow
The finance flow

The product flow includes the movement of goods from a supplier to a

customer, as well as any customer returns or service needs.
The information flows involves transmitting order sand updating the status of
delivery.

The financial flow consists of credit terms, payment schedule and consignment
and title ownership arrangements.

There are two main types of supply chain application software.

Planning application and execution application.

Planning application use advance algorithms to determine the best way to fill an
order. Execution application track the physical status of goods, the management
of materials, and financial information involving all parties supply chain
application is based on open data models that support the sharing of data both
inside and outside the enterprise (this is called the extended enterprise, and
include key suppliers, manufactures, and end customer of specific company).
And downstream (with a companys suppliers) and a downstream (with a
companys clients) supply chain application has the potential to time the time-
to-market of product, reduce costs, and allow all parties in the supply chain to
better manage current resources and plan for future.
What is E-commerce?

1. E-commerce is the buying and selling the goods and service through digital
communication. It also include inter-company function such as marketing,
finance, manufacturing, negotiations and selling, that involves commercial
transactions and use e-mail, edit, eft, file transfer, fax, video conferencing or
interacting with remote computers. E-commerce also includes doing business
on the web.

2. Beginnings of E-commerce
E-commerce started in the 1970s, when some business houses started creating
private networks to share information with business partners and suppliers. This
process, known as Edi, involving transmitting standardizes data, saved a great
deal of paper and reduce the burden on the work force. EDI used the major
components of E-commerce.

3. Benefits
Convenience, speed, reduced costs and wider choice are some of the main
advantages of E-commerce. A seller can have access to a larger number of
customers, even those located physically far away. The customer has a wider
choice of seller are not required to meet at any one particular point, overhead
costs are drastically cut. Customers demand can be met even at the most
awkward hours, for no person is needed to conduct the trade.

These are two basic problem in the field of E-commerce security and privacy.
In the absence of stringent and well defined cyber laws, money transfer has
latent risks. Several cases of shipping off money illegally from customers
accounts have come to light. Secondly, people feel very uncomfortable while
giving information about their business on the net, for they are not sure of the
confidently of this information. But these are teething troubles and will be taken
care of in due course.
Advantages of E-commerce

Lower transaction costs - if an e-commerce is implemented well, the web can

significantly lower both order taking costs up front and customer service costs
after the sale by automating processes. 24/7- online shop dont close.

Larger purchases per transaction - Amazon offers a feature that no normal

store offers. When you read the description if the book, you also can see what
other people who ordered this book also purchased. That is you can see the
related books that people are actually buying. Because of features like these it is
common for people to buy at a normal bookstore.

Integration into the business cycle - a web site that is well- integrated into the
business cycle can offers customers more information than previously available.
For example, if Dell tracks each computers through the manufacturing and
shipping process customer can see exactly where their order is at any time. This
is FedEx did when they introduced on-line package tracking-FedEx made more
information available to the customer.

People can shop in different ways

Traditional mail order companies introduce the concept of shopping from home
in your pajamas, and e-commerce offers this same luxury. New features that
web sites offer include.

The ability to build an order over several days

The ability to configure products and see actual prices
 The ability to easily build complicated custom orders
The ability to compare price between multiple vendors easily
The ability to search large catalogs easily

Larger catalogs - a company can build a catalog on the web that would never
fit in an ordinary mailbox. For example, Amazon sells 4,000,000 books and
associated items. Imagine trying to fit all of the information available in
Amazons database into a paper catalog.

Improved customer relations - with automated tools it is possible to interact

with a customer in richer ways at virtually no cost. For example, the customer
might get an email when the order is confirmed, when the order is shipped, and
after the order arrives. A happy customer is more likely to purchase something
else from the company.
The Business Model

E-commerce allows people to create completely new business models. In a

mail order company there is a high cost of printing and mailing catalogs that
often end up in the trash. There is also a high cost in staffing the order taking
department that answers the phone. In e-commerce both the catalog distribution
cost and the order taking cost fall towards zero. That means that it may be
possible to offer products at a lower price, or to offer products that could not be
offered before because of the change in cost dynamics.

Definition

For purpose of this policy, electronic commerce is defined as the use of

electronic ordering and payment mechanisms via an interactive electronic
mechanism such as the World Wide Web to effect remote payment for Stanford
university goods or services. This policy does cover business-to-business e-
commerce pursuant to which the university purchase goods or services or to
electronic ordering and payment mechanism that are typically used between
other business or institution and Stanford university, usually referred to as
electronic data interchange or electronic funds transfer.

Purpose

Electronic commerce provides a convenient way to handle business transaction

such as conference registration or the purchase of course materials. However,
reasonable step should be taken to protect the personal information and privacy
of purchasers. It is also in the universitys best interest to facilitate the transfer
of electronic commerce transaction data to its financial system. The purpose of
this policy is to establish guidelines for electronic commerce.

Policy

a. relation to university mission - any use of electronic commerce at Stanford

must be consistent which guide memo 15.3, unrelated business activity. Which
prohibits the use of Stanford resources for any activity not related to the
universitys mission.

b. authorized vendor - Stanford has contracted with an internet commerce

transaction services vendor to handle the authorization and management of
electronic orders. This arrangement allows the university to.

Consistently require the vendor to take necessary and reasonable steps to

ensure that transactions are secure.

Assure appropriate integration with university financial systems.

Ensure that parties comply with Stanford names use the private policies.

Use tested emergency response and recovery producers.

Leverage university transaction to reduce costs, and

Provide current technology and support for developing applications.

Developments in Supply Chain Management

Six major movements can be observed in the evolution of supply chain

management studies creation, integration, and globalization (lavassani et al.,
2008), specialization phases one and two, and SCM 2.0.

1. Creation Era

The term supply chain management was first coined by an American industry
consultant in the early 1980s however the concept of supply chain in
management, was of great importance log before in the early 20th century,
especially by the creation of the assembly line, the chacteristics of this era of
supply chain management include the need for large scale changes,
reengineering, downsizing driven by cost reduction programs, and widespread
attention to the Japanese practice of management.

2. Integration Era

This era of supply chain management studies was highlighted with the
development of electronic data interchange system in 1960s and developed
through the 1990s by the introduction of enterprise resource planning systems.
This era has continued to develop into the 21st century with the expansion of
internet- based collaborative systems. This era SC evolution is characterized by
both increasing value-added and cost reduction through integration.

3. Globalization Era

The third movement of supply chain management development, globalization

era, can be characterized by the attention towards global systems of supplier
relation and the expansion of supply chain of organization can be traced back to
several decades ago(e.g the oil industry), it was not until the late 1980s that
considerable number of organization started to integrate sources into their core
business. This era is characterized by the globalization with the goal of
increasing competitive advantage, creating more value-added, and reducing
costs through global sourcing.

Supply Chain Management Objectives

The objective of every supply chain is to maximize the overall value generated.
The value supply chain generates is the difference between what the final
products is worth to the customer and the effect of supply chain expends in
filling the customers request the difference between the revenue generated from
the customer and overall cost across the supply chain. For example a customer
purchasing a computer from dell pays 2000 which represents the supply chain
receives. Dell and other stages of the supply chain incur cost to convey
information and transport the item and transfer find of 2000 that the customer
paid and sum of all the cost incurred.

Principles of Supply Chain Management

1. Introduction

Supply chain management has received a lot of attention and the terminology
has been used (sometimes misused) by companies to describe the set of
manufacturing and logistics processes the result in delivering a product to their
customers. The supply chain encompasses all activities associated with the
flow and transformation of goods from the raw materials stage, through to the
end use as well as the associated information flows. Supply chain
management is the integration of these activities through improved supply
chain relationship to achieve a competitive advantage.

2. Supply chains extend beyond immediate customer and supplier.

If your company produces many product which have different customers,

suppliers and delivery methods, how do you deal with the complexity of your
supply chain? One approach used in the DAMA project was to pick a specific
product, like a mens nylon parka and trace the entire process step for the
product from raw materials to its purchase by a consumer.

3. Supply chains are not constant.

Knowing that integration is difficult to accomplish, why would the companies

want to spend the resources to synchronize their business processes? The study
below shows why. There are big rewards for the successful partnerships.

4. Parallel data sharing is better than serial.

There is a somewhat obvious relationship between forecasting and lead-time

that is frequently overlooked in supply chain planning. If a company could
produce near perfect forecasts, the lead-time to acquire the forecasted product
would be unimportant. The lead time could be very long, although the dilemma
is in reality, the further out the selling period; the less accurate that forecast is
likely to be. The forecast accuracy would not be as important because the
company could respond to whatever the current demand was in a very short
time.

5. Forecasting and lead-time are symbiotic.

The globalization of the US soft goods industry has caused many companies to
examine the total cost of procurement. In general, the further the product is
made from the US market, the lower manufacturing cost and the higher the
logistics cost. A source on the side of the world may have the cheapest
manufacturing cost, but it will cost more to deliver. Keeping the correct balance
will pay off at the companys bottom line.
6. Manufacturing and logistics cost have inverse relationship.

The voluntary inter- industry commerce standards group has developed a set of
business processes called collaborative planning, forecasting and replenishment
which start with the premise that there should be one agreed upon view of
demand.CPFR pilots between retailers and their suppliers have shown that
sharing views of demand data demand data and collaborative on the differences
result in increased sales, higher in-stock positions and lower inventory. This is
accomplished because forecasting and planning processes increase in accuracy,
which makes the supply chain responsive to the consumer.
Business-to-business transactions in E-commerce

Introduction

The real power of e-commerce lies not in the direct sale of product to consumer
but in the integration of relationship among merchants and suppliers for prompt,
quality customer service. Business-to-business e-commerce is industrial and
marketing among the processes it handles are fulfillment and procurement. As
soon as an online purchase is entered and payment is approved through a credit
card clearance procedure a message is generally displayed saying, thank you for
your order. The amount of Sxxx will be charged to your credit card. The product
should reach within 5 to 7 working days. The moment the message is displayed
on the customers monitor, an electronic order is sent to the vendor to fill the
order and ship it directly to the customer. Doing this electronically means
reduced inventory and quicker service. However business to business is more
than fulfillment there is the potential for the internet to become like a central
computer system for all industries. Companies can conveniently and quickly
check their suppliers inventories or make instant purchases. Overhead should
decline as web- driven systems eliminate many of the traditional workers who
do the faxing and handle purchase orders. Competing online should also force
prices for materials and supplies to drop dramatically. An extranet is shared
intranet, deploying e-commerce within the larger community of an organization,
including its vendors, contractor, and key customer. Extranet is an extended
networks that share information with business partners via the internet. It is said
that more than 90% of business that sell goods to other companies will be doing
business on the web.

Supply chain management

It means integrating the networking and communication infrastructure between

business and suppliers to ensure the right product in the right place, at the right
time at the right place and in the right condition this is an integral part of the
business-to-business frame work. Supply chain management cuts across
application infrastructure and business relationship. it transforms the way
companies deal with suppliers, partners, and even customers. The goal is to
improve efficiency and profitability, but it also means creating new
opportunities for everyone involved. Supply chain management employs
powerful tool that allow companies to exchange information in an effort to
reduce cycle times, to have quicker fulfillment of orders, to minimize excess
inventory, and to improve customer service. This communication is done
quickly from one database to another. According to information week research
survey of 300 IT executive using supply chain system are better collaboration
with business partners, lower operational costs, and reduced cycle times. In
supply chain management, the name of the game is collaboration with
business partners, lower operational costs, and reduced cycle times. Business-
to-business pave the way for a new business model for the digital economy. It is
distinct network of suppliers, distribution, internet service providers, and
customer that use the internet for communication and transaction handling. As
communication tools get better and cheaper, transaction costs should drop. With
the internet,many transaction costs are approaching zero. People around the
world can now quickly and cheaply access the information that need almost
instantly. Companies can also add value to a product or service from any
location, at any time, day or night.
Business-to-consumer transaction in E-commerce

Introduction

Business-to-consumer is the interface where consumers access a merchants

web site for the purpose of buying merchandise or requesting service. The focus
of this e-commerce application is on the consumers use of a merchants web
storefront or website. Consumers anywhere can browse and order goods or
services online anytime. This approach is modeled on the traditional shopping
experience found in stores like Safeway, K-mart.
Electronic Data Interchange (EDI)

Electronic data interchange (EDI) is the inter organizational exchange of

business documents in structured machine process able form.
Electronic data interchange can be used to electronically transmit document
such as purchase orders, invoices, shipping bills, receiving advice and other
standard business correspondence between trading partners.

EDI can also be used to transmit financial information and payments carried out
over EDI are usually referred to as electronic funds transfer (EFT).

EDI should not be viewed as simply a way of way of replacing paper documents
and traditional methods transmission such as mail phone or in person delivery
with electronic transmission.

But it should be seen not as end but as means to streamline procedures and
improve efficiency and productivity.

Electronic data interchange is a structured transmission of data between

organizations by electronic means. It is more than mere E-mail; for instance,
organization might replace bills of lading and even cheques with appropriate
EDI message.

It also refers specially to a family of standard, including the X12 series. EDI
also exhibits its pre-internet roots, and the standard tend to focus on ASCII-
formatted single messages rather than the whole sequence of condition and
exchanges that make up an inter-organization business process.

Electronic data interchange is simply a set of data definition that permit

business forms that would have been exchanged using paper in the past, to be
exchanged electronically. This simple set of definitions has spurred a number of
organization to put in place an operational environment in which the exchange
of electronic business forms substitute for the exchange of paper forms.

This has resulted, in some cases, in the establishment of an EDI environment,

which arguably represent the most advanced state of electronic commerce today,
causing some of view EDI and electronic commerce as one and the same. We
view EDI only as a subset of electronic commerce, albeit a very. As such, EDI
provides an excellent example of working electronic commerce environment
and is a good starting point for examining electronic commerce. Electronic
data interchange aims at single point collection of data for use by various
agencies participating in a common activity.
Objective of EDI

The basic documents for transaction of business will be taken once by one
agency, and other agencies will take the information from the agency,
electronically, avoiding the need to either physically take the document from
one office to another or keying in the data again and again involving the
attendant problems of manual labor and errors creeping in at each stage of data
entry.

Standards of EDI

EDI has been established within various industries as a reliable and efficient
from of data transmission. It is a technical representation of a business
conversation between two entities, either external or internal or internal. From
its inception, EDI was applied differently within these industries and therefore
different standard were set up.

Benefits of EDI

Within various industries, EDI has been used to great advantage, and many
benefits have been expounded in its regard. EDIs benefits relate to environment
impact, improved time efficiency, improved accuracy and increased flexibility,
enhanced partnership, labor cost, shipping. EDI creates a system where by
documents and data can easily be transported from one source to another, and is
able to overcome incompatibility issues.

Specifications of EDI

Organizations that send or receive documents from each other are referred to as
trading partners in EDI terminology. The trading partners agree on the specific
information to be transmitted and how it should be used. This is done in human
readable specification. While the standards are analogous to building codes, the
specification are specification are analogous to blue prints. Larger trading hubs
have existing message implementation guideline which mirror their business
processes for processing for processing EDI and they are usually unwilling to
modify their EDI business practices to meet the needs of their trading partners.

Transmission of EDI

Trading partners are free to use any method for the transmission of documents.
In the past one of the more popular methods was the usages of a bisync modem
to communicate through a value added network (VAN). Some organization
have used direct modem connection and bulletin board system (BBS), and
recently there has been a move towards using some of the many internet
protocols for transmission, but most EDI is still transmitted using a VAN. In the
healthcare industry, a VAN is referred to as a clearing-house.