1. Management Information System Session 2 nd Dated: -14-03-2010 BY: - Neeraj Gupta Figure 1.3 Several subsystems make up this corporate accounting system.

2. Classification of IS Information Systems Operations Support System Management Support System Transaction processing systems Process control systems Office automation systems Management information systems Decision support systems Executive information systems

3. Enterprise Information System Information systems can be grouped into business function categories; however, in the real world information systems are typically integrated combinations of functional information systems. Functional business systems are composed of a variety of types of information systems (transaction processing, management information, decision support, etc) that support the business functions of:  Accounting  Finance  Marketing  Productions/operations management  Human resource management  Manufacturing Information Systems  Cross-functional Information systems  Transaction Processing Systems

4. Information Systems in Business ISs in Functional Business Areas  Accounting Record business transactions, produce periodic financial statements, and create reports required by law  Finance Organize budgets, manage the flow of cash, analyze investments, and make decisions that could reduce interest payments and increase revenues  Marketing Analyze demand for various products in different regions and population groups  Human Resources Help with record keeping and employee evaluation  Manufacturing Allocate resources such as personnel, raw material, and time Control inventory, process customer orders, prepare production schedules, perform quality assurance, and prepare shipping documents

5. An Organization’s MIS Financial MIS Marketing MIS Human Resources MIS Etc. Accounting MIS Drill down reports Exception reports Demand reports Key-indicator reports Scheduled reports Databases of external data Databases of valid transactions Transaction processing systems Business transactions Extranet Internet Figure 9.3 Etc.

6. Quality control reports Process control reports JIT reports Operational databases Databases of valid transactions for each TPS Transaction processing systems Business transactions Internet or Extranet Figure 9.6 Manufacturing MIS Business transactions Databases of external data Databases of internal data Manufacturing DSS Manufacturing ES Manufacturing applications databases Customers, Suppliers MRP reports Production schedule CAD output

7. Sales by customer Sales by salesperson Sales by product Operational databases Databases of valid transactions for each TPS Transaction processing systems Business transactions Figure 9.9 Marketing MIS Databases of external data Databases of internal data Manufacturing DSS Manufacturing ES Marketing applications databases Pricing report Total service calls Customer satisfaction

8. Benefit reports Salary surveys Scheduling reports Operational databases Databases of valid transactions for each TPS Transaction processing systems Business transactions Figure 9.12 Human Resource MIS Databases of external data Databases of internal data Manufacturing DSS Manufacturing ES Human resource applications databases Training test scores Job applicant profiles Needs and planning reports

9. Accounting Figure 3.3 Accounting information systems include features that reflect up-to-date performance of the organization in financial terms.

10. Information Systems in Business Financial MIS: - Provides financial information to all financial managers within an organization. Manufacturing MIS: -Provides ways to reduce the time taken to complete various processes of manufacturing using the newer technologies. Marketing MIS: -Supports managerial activities in product development, distribution, pricing decisions, and promotional effectiveness HR MIS: -Concerned with all of the activities related to employees and potential employees of the organization Accounting MIS: -Provides aggregated information on accounts payable, accounts receivable, payroll, and other applications.

11. Information Systems in Business Cross Functional MIS: - Many e-business applications are integrated cross-functional enterprise applications like enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM), which also reengineers the business processes involved. Enterprise collaboration systems (ECS) support and enhance communication and collaboration among the teams and workgroups in an organization. Transaction Processing Systems: Online transaction processing systems play a vital role in e-commerce. Transaction processing involves the basic activities of (1) data entry, (2) transaction processing, (3) database maintenance, (4) document and report generation, and (5) inquiry processing.

12. Sales and Marketing Information System They need information about:  Customers  End-users  Resellers  Competitors,  Government regulations  Other forces in the marketplace

13. Activities or functions of Marketing IS Assessing Information Needs Developing Information Information Analysis Distributing Information

14. Activities or functions of Marketing IS Interactive Marketing Targeted Marketing  Community  Content  Context  Demographic/Psychographic  Online Behavior

15. Manufacturing IS Information system helps in these manufacturing activities:  Plant activity scheduling  Material requirement assessment  Material reallocation between orders  Dynamic inventory management  Grouping work orders by "characteristics"  Resource qualification for task completion Computer Integrated manufacturing used to: -  Simplify  Automate  Intregrate Goal of CIM  Agile  Flexible  Total Quality management Results CIM  Implementing such manufacturing concepts enables a company to quickly respond to and fulfill customer requirements with high-quality products and services.

16. Manufacturing IS Uses of computers in manufacturing include:  Computer-aided Engineering (CAE)  Computer-aided Design (CAD)  Computer-aided Process Planning (CAPP)  Material Requirements Planning (MRP)  Manufacturing Resource Planning (MRP-II)  Computer-aided Manufacturing (CAM) Manufacturing execution systems: MES are performance monitoring information systems for factory floor operations. They monitor, track, and control the five essential components involved in a production process:  Materials, Equipment, Personnel, Instructions and specifications, Production facilities. MES includes:  Shop floor scheduling and control systems  Machine control systems  Robotics control systems  Process control systems

17. Benefits of CIM Increased efficiency through:  Work simplification and automation,  Better production schedule planning  Better balancing of production workloads in production capacity Improved utilization of facilities, higher productivity, better quality control through:  Continuous monitoring  Feedback and control of factory operations, equipment and robots. Reduced investments in production inventories and facilities  Work simplification  Just-in-time inventory policies  Better planning and control of production  Better planning and control of finished goods requirements Improved customer service  Reducing out-of-stock situations  Producing high-quality products that better meet customer requirements

18. HRIS Designed to support:  Planning to meet the personnel needs of the business.  Development of employees to their full potential.  Control of all personnel policies and programs. Traditionally, businesses used computer-based information systems to:  Produce pay checks and payroll reports  Maintain personnel records  Analyze the use of personnel in business operations. Many firms have gone beyond these traditional personnel management functions and have developed human resource information systems (HRIS) that also support:  Recruitment, selection and hiring, Job placement, Performance appraisals, Employee benefit analysis, Training and development, Health, safety, and security

19. HRIS HRM and internet HRM and Corporate intranet Staffing the organization Training and development

20. Cross Functional Enterprise System Information systems typically are integrated combinations of cross-functional business systems. Such systems support business processes, such as:  Product development  Production  Distribution  Order management  Customer support etc.

21. Enterprise Application Architecture Enterprise Application architecture translates the logical design into a physical structure that includes hardware, software, network support, and processing methods. The end product of the systems design phase is the preparation of the system design specification document. Design Checklist  Enterprise resource planning  Initial cost and TCO  Scalability  Web integration  Legacy interface requirements  Security  Processing options

22. Enterprise Application Integration Many companies have moved from functional mainframe legacy systems to integrated cross-functional enterprise applications. This typically has involved installing:  Enterprise resource planning (ERP) s/w  Supply chain management (SCM) s/w  Customer relationship management (CRM) s/w It enables users to: -  model business processes involved in interactions that should occur between business applications.  Provide middleware that performs data conversion and coordination, application communication & messaging services, & access to application interfaces involved.  Integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users.  Integrate the front-office and back-office applications of an e-business, so they work together in a seamless, integrated way. This is a vital capability that provides real business value to an e-business enterprise that must respond quickly and effectively to business events and customer demands.

23. Enterprise Collaboration Systems Communicate: Sharing information with each other. Coordinate: Coordinating our individual work efforts and use of resources with each other. Collaborate: Working together cooperatively on joint projects and assignments.

24. Transaction Processing Systems (TPS) Primary purpose is to record, process, validate, and store transactions that take place in the various functional areas/of a business for future retrieval and use. Types of Transactions  Internal transaction-Internal to a company and related to internal working of an organisation  External transaction-External to a company and related with external sources

25. Characteristics & Features of TPS Characteristics: -  It records internal and external transactions for a company. It is a repository of data that is frequently accessed by other systems  It performs routine, repetitive tasks. It is mostly used by lower-level managers to make operational decisions  Transactions can be recorded in batch mode or online. In batch mode, the files are updated periodically; in online mode, each transaction is recorded as it occurs.  There are six steps in processing a transaction. They are data entry, data validation, data processing and revalidation, storage, - output generation, and query support. Features: -  Supports different tasks by imposing a set of rules and guidelines that specify how to record, process, and store a given transaction.  The data life-line for a company because it is the source of data for other information systems  The main link between the organization and external entities  TPS exist for the various functional areas in an organization, such as finance, accounting, manufacturing, production etc.

26. Decision Support Systems Used for unstructured problems Characteristics  Data from multiple sources internal and external to organization  Presentation flexibility  Simulation and what-if capability  Support for multiple decision approaches  Statistical analysis

27. Decision Making Systems Applications  Where time is critical  Where participants are geographically dispersed  Where authority obstructs communication  Military  Business  Government

28. DSS Supplements an MIS Pulls information from variety of databases Interactive Non-routine decision-making Model – mathematical representation of real-life system Simulation – using a computer model to reach a decision about a real-life situation

29. Management Information System Use recorded transactions and other data to produce information for problem solving and decision making. Data + Organization Set of formal business systems designed to provide information for an organization Routine information for routine decisions  Operational efficiency  Use transaction data as main input  Databases integrate MIS in different functional areas

30. MIS vs. DSS MIS  Planned reporting  Standard, scheduled, structured, and routine  Constrained by the organizational system DSS  Decision making  Unstructured and by request  Immediate and friendly

31. Executive Information System (EIS) Executive Support Systems (ESS) supply the necessary tools to senior management. The decisions at this level of the company are usually never structured and could be described as "educated guesses." Executives rely as much, if not more so, on external data than they do on data internal to their organization. The Role of ESS in the Organization  Alleviate information overload for executives  Select most relevant data for analysis Drilling down  Consolidate and summarize data  Display data graphically

32. Benefits of EIS Provide necessary information Gives summarized data as wanted by executives Get information in graphic form

33. Advantages and Disadvantages of EIS Advantages: -  Simple for high-level executives to use Operations do not require extensive computer experience  Provides timely delivery of company summary information  Provides better understanding of information  Filters data for better time management  Provides system for improvement in information tracking Disadvantages: -  Computer skills required to obtain results  Requires preparation and analysis time to get desired information  Detail oriented Provides detailed analysis of a situation  Difficult to quantify benefits of DSS How do you quantify a better decision?  Difficult to maintain database integrity  Provides only moderate support of external data and graphics capabilities

34. Functional Perspectives of Information System Sales and Marketing Systems Manufacturing and Production Systems Finance and Accounting Systems Human Resources Systems

35. Interrelationships among Systems

36. That’s all for Today!