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MANAGEMENT INFORMATION SYSTEM
DATA:
Data can exist in a variety of forms -- as numbers or text on pieces of paper, as bits and bytes
stored in electronic memory, or as facts stored in a person's mind.
RECORDS: Records are composed of similar type of information. A set of records constitutes a file.
DATA MANAGEMENT: Administrative process by which the required data is acquired, validated,
stored, protected, and processed, and by which its accessibility, reliability, and timeliness is ensured
to satisfy the needs of the data users.
DATA MANAGEMENT SYSTEM: A data management system (DMS) is computer software designed
for the purpose of managing data on a variety of models
Administrative process by which the required data is acquired, validated, stored, protected,
and processed, and by which its accessibility, reliability, and timeliness is ensured to satisfy
the needs of the data users.
The management of many business areas needs information to operate effectively.
Administration, counseling, engineering, education, personnel, public health and sales are all
the departments managing relevant data.
System:
A system is a group of elements that are integrated with a common purpose of achieving a common
objective. An organization contains resources, they work hard towards achieving particular objectives
that are specified by the management.
1) Input element.
2) Transformation element.
3) Output element.
4) Control mechanism.
5) Objectives.
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System Elements:
fig 2.2
An open loop system does not have a feedback or control mechanism. These are very simple
systems that do not require monitoring. For example simple space heaters.
In case of closed loop systems there is a feedback mechanism that monitors the output with respect
to objectives. For example room air conditioners. Refer fig 2.1
Open systems are connected to their environment through resource flows. These systems require the
help of systems in the environment to accomplish their completion. For example, a centralized air
conditioning system requires a cooling plant for it to cool the entire building, here the centralized air
conditioning system is an open system.
A closed system does not have connection with the environment with which its connected. Closed
systems exist in controlled laboratory conditions. They are kept in ideal conditions which are not
possible in actual environment.
A sub-system is a system that exists in another system. Its existence depends up on the existence of
its super-system. The sub-system contributes in the proper working of the entire system. The proper
functioning of the sub-systems ensure proper functioning of the entire system. For example an
Automobile system, it consists of many sub-systems like acceleration system, fuel injection system,
breaking system etc., every sub-system is responsible for the proper functioning of the entire
automobile system.
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A super-system is a system which contains many sub-systems. The super-system is responsible for
monitoring the overall working of its sub-systems. The super-system decides the constrains and
resources to be put on its sub-systems. For example, a Central government system, it is a super-
system which has under its control the state government systems which form the sub-systems.
Physical Systems use physical resources or tangible resources. A physical system represents a
working model for any conceptual system. A physical system is completely practical oriented and
interacts continuously with the environment. For example, a computer is a physical system which has
practical implementations and inter acts a lot with the users.
Conceptual Systems use abstract and conceptual resources. Conceptual systems can make the
physical resources work in a proper manner. They basically consist of data, information and mental
concepts.
Both Physical and Conceptual systems require each other for proper functioning and effective
practical implementation respectively.
The Initial Focus on Data During the first half of twentieth century, when punch cards were used,
firms generally ignored the information needs of managers. The first computers were only used for
accounting applications. The name given to these early computer based applications was Electronic
Data Processing (EDP). Now a days the term Accounting Information System (AIS) is used to
describe those applications.
The New Focus on Information In 1964, a new generation of computing equipment was introduced
that influenced strongly on the manner in which computers were employed. They were the computers
using the silicon technology. The concept of using computers as Management Information System
was promoted.The MIS initiated that the computers should be applied for the management of
information. This concept was adopted slowly by larger firms.
The revised focus on Decision Support A Decision Support System (DSS) is an information-producing
system aimed at a particular problem that a manager must solve and the decisions the manager must
take. The manager can be located any where, at any level in the organization. These DSS were used
widely in the organizations.
The Current Focus on Communication: During the time DSS evolved, interest was focused on
another computer application called Office Automation (OA) which facilitates communication and
increases productivity among the managers and office workers through the use of electronic devices.
OA got started in 1964, when IBM announced its Magnetic tape and electronic typewriter (called
Selectric typewriter). The selectric typewriter could type the information stored in the magnetic tapes.
This lead to an OA application called word processing. The Office Automation grew to such levels
that applications such as video conferencing, e-mail, desktop publishing etc started. In a collective
term it was given the name Virtual Office.
Potential Focus on Consultation : The development of computers had made it possible to perform
tasks of logical reasoning just like humans. The application called Artificial Intelligence (AI) were
developed. Now a days a subclass of AI known as Expert Systems are growing which works as a
specialist in a particular area. To solve the problems using AI the applications were given the name
Knowledge-based Systems. From 1990s the use of knowledge-based systems were extensively used
by large firms. 4
• Information is presented both in oral as well as in written form using information processors.
• The computer portion of the information processors contain each of the computer based
application areas :- AIS ( Accounting Information System), MIS (Management Information
System), DSS (Decision Support System), Virtual Office and Knowledge Based Systems. They
are collectively called CBIS ( Computer Based Information System).
The firms using computers realized that there was a need to form separate organizational units of
specialists who would be responsible for implementing the systems. These specialists were known as
Information Specialists.
Information Specialists : Information specialists have the complete responsibility of developing and
managing the computer based systems in the firm.There are five main categories of information
specialists.
1) System Analyst.
2) Database Administrators.
3) Network Specialists.
4) Programmers.
5) Operators.
The concept of Traditional Communication Chain connects the Users, Information Specialists and the
Computer. This communication is named traditional because they have been communicating with each
other traditionally (since old times). From fig 2.4 it can be seen the various levels in a communication
chain. The functions of the members of a traditional communication chain are as follows.
System Analysts
• They work with the users to develop new systems and in improving the present system.
• They are expert in defining problems and at preparing written documents on how the computer
will assist in solving the problem.
• They are expert in computer systems as they require to know the capabilities of the software and
hardware in which the solution of the problem is to be accomplished.
Network Specialists
• They work with systems analysts and users to establish the data communication networks that
would connect users with the required systems that are widespread.
• They combine the expertise from the fields of computing and telecommunications.
• Another form of Network specialists are called Web Masters who are expert on the World Wide
Web.
Programmers
• They use the documentation prepared by the System analysts to encode the instructions.
• They require to be very conversant with the software they are working on.
Operators
End-User Computing:
In the late 1970s the trend of end user computing started growing. The users started growing interest in
developing their own computer applications. Following are the reasons for the development of en-user
computing.
1. Increase in Computer Literacy. During the early 1980s, good education programs related to
computers were conducted in colleges and institutions which caused a computer awareness
between the students. The management ranks, especially on the lower levels started filling up
with computer literate people.
2. The Information services backlog The situation of the information specialists became critical
during early 1980s when the work load increased beyond accepted limits as the users started
demanding more information services and so the specialist could not cope up with the demands.
3. Low-Cost Hardware The market got filled up low cost minicomputers, so the users could afford
them at their homes making it easier for them to develop applications.
4. Prewritten Software Both the hardware and software companies produced software that would
do the accounting, word processing, facilitate development of applications etc. made it easy for
the users to rely more up on themselves rather that in information specialists.
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FINANCIAL DATA: Financial data includes information on how the organization resources
translate into money. Reports on an organization profit and loss, assets and liabilities and other
resources of value would result from use of financial data.
RESEARCH DATA: Research data includes analysis of past performance and plans for future
projects.
PRODUCTION DATA: Production data involves information about the actual products made.
Products sold, or services provided.
PERSONNEL DATA:
i.e. Circulam vita (CV), Vacations timing , Over time/ pensions/ sick leaves, Wages.
•Provides middle level management with reports that summarize and categorize information
derived from company databases. (In pre determined format)
•Supplements Transaction processing Systems
•Able to produce detailed information, summary information, exception information
•Information produced is based on accepted management or mathematical/statistical models
•Provides its users with decision oriented information whenever a decision-making situation
arises
•Analyses information already captured by TPS and MIS in order to support unstructured
decision making at top management level
•Facts
•DSS does not make decisions, it helps some one to make a decision by providing
information
•TPS or MIS does not analyze information they produce
Executive Information System (EIS)
Is a DSS which is especially meant for top level management and specifically support
unstructured decision making. Also called Executive Support Systems (ESS)
Information in an EIS are presented in charts and tables that show trends, ratios and other
managerial statistics and is stored in data warehouses. Draws data not only from the
organization, able to draw information from outside sources such as news services and marketing
research databases.
Output Subsystem
• The Product Subsystem provides information about the firm’s products. 12
• The Place Subsystem provides information about the firm’s distribution network.
• The Promotion Subsystem provides information about the firm’s advertising and selling
activities.
***|Notes By: Shashi Kant
• The Price Subsystem helps the managers to make decisions related to fixing or changing
the price of a product.
• The Integrated Mix Subsystem helps the managers to develop strategies on those areas
which are effected from all the above mentioned subsystems, example – sales forecast.
The users category mainly consists of managers.
• The Accounting Information System gathers internal data describing the manufacturing
operation and environmental data that describes the firm’s transactions with its suppliers.
The manufacturing Intelligence Subsystem gathers data from the environment. The data
collected includes recent updates from the activities of labor unions and suppliers.
Output Subsystem
• The Production Subsystem measures the production process in terms of Time i.e.
tracking the work flow step by step.
• The Quality Subsystem measures the quality of materials as they are transformed during
the production process.
The Cost Subsystem monitors and measures the cost required during the production process.
HR helps bring new employees into the firm by publishing ads through media ( audio &
visual )
To enhance the employees’ job related skills and knowledge the firms conduct
educational and induction programs. 15
A motivation factor is added like promotion benefits for those who attend and learn from
the induction programs.
***|Notes By: Shashi Kant
Basic HR activities contd..
Data Management
HR maintains a database of employees related data and processes those data to meet the
information needs of the users ( usually sister concerns)
During employment the employees receive in addition to their basic salary, additional
benefits like hospital, housing, profit sharing etc.
When employees leave their jobs or are terminated, the HR processes the necessary
paperwork and often conducts exit interviews.
HR administers the firm’s retirement program for the former employees who are eligible.
HRIS Model:
Personal data elements :- they are relatively permanent and non financial in nature.
These personnel data elements are created by HR at the time of employment and are kept
updated as long as the employee is working for the firm. Similar data is kept for retired
employees.
Accounting data elements :- they are financial and tend to be more dynamic like monthly
salary, income tax etc.
Succession studies :- are conducted for the purpose of identifying those people in the
firm who are candidates for the positions that become available including promotions.
Job analysis and evaluation :- is done to identify the scope, qualifications and skills
required for all the jobs in the firm.
Grievance studies :- are conducted for the solution of the problems faced by the
employees, where employees file complaints.
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HRIS model contd..
Supplier Intelligence :- Here the suppliers mean such firms and organizations which
provide employee benefits like insurance companies. Also employment agencies. They
provide data and information that help the firm for recruitment and hiring of people.
Labor Union Intelligence :- The data and information provided by the labor unions are
used for administering labor contracts between the unions and firms.
Competitor Intelligence :- Includes the data and information about the employees of
the competitors who are very efficient, also called potential recruits and various effective
strategies for better human resource development & management used by the
competitors.
Compensation Subsystem
Benefits Subsystem
It includes the activities related to defined contribution and defined benefits plans that
allow the employees to accumulate retirement funds to meet a specified standard of
living.
Flexible benefits plans enable employees to select the benefits that they want to take,
which they are eligible for.
It includes reporting of firm’s personnel policies and practices to the government and
also the labor unions.
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