Management Information System

MANAGEMENT INFORAMTION SYSTEMS

Semester – III
B.com

Student Workbook

Edition: 2020
#44/4, District Fund Road, Behind Big Bazaar, Jayanagar 9th Block, Bengaluru, Karnataka 560069

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 Management Information System

INDEX

SL NO MODULE PAGE NO

1 SYLLABUS 3

2 MODULE 1 - Basic concepts of Information Systems 6

3 MODULE 2 - Technical Foundations of MIS 30

4 MODULE 3 - Subsystems of MIS 66

5 MODULE 4 - Information Subsystems and 81

Organization.

6 MODULE 5 - Latest Trends in MIS: 110

7 Case Studies

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 Management Information System

SYLLABUS

Course Outcomes:
CO 1: Attain the knowledge on information systems and its importance in management decision
making process.
CO 2: Identify the technical foundations needed in framing and implementing MIS in an
organization.
CO 3: Acquaint learners the concept of different levels of subsystems used in Strategic planning.
CO 4: Describe Information Systems -such as SCM, E - CRM, ERP etc.
CO 5: Update the latest trends and developments in the field of IS and IT.

Module 1: Basic concepts of Information Systems

Introduction to Management Information Systems, History & Impact of MIS, Role and
Importance, MIS Categories, Managers and Activities in IS, Importance of Information
systems in decision making and strategy building. Information systems and subsystems.
Module 2: Technical Foundations of MIS

Introduction to computer basics. Data and information ,Block Diagram of a computer: Basic
concepts of software and hardware, Computer Languages : System Concepts : Database
and file management , Database Management Systems (DBMS).
Module 3: Subsystems of MIS

 Value Chain concepts

 Transaction Processing Systems (TPS)
 Decision Support Systems (DSS)
 GDSS,EIS,ES, MIS.
 Features, Process, advantages and Disadvantages
 Role of these systems in Decision making process.
Module 4: Information Subsystems and Organization.

 Enterprise Resource Planning (ERP)

 Business Process RE-engineering(BPR)
 Artificial Intelligence (AI)
 Knowledge Management Systems(KMS)
 Electronic Customer Relationship Management(E-CRM).
Module 5: Latest Trends in MIS:

 E-Business
 Digital Marketing
 E-catalogues

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 Supply Chain Management – Logistics, features, stages in SCM.

Module 1: INTRODUCTION TO MIS

A management information system provides information for managing an organization. The idea of
MIS predates the computer age.

Objectives: Main objectives of this module are

 Know why information is important while decision making and strategy building process.
 Understand information systems, types and subsystems
 How system concept underlies the field of information systems?

Management Information Systems (MIS)

1.1 INTRODUCTION

Management Information System, more commonly known as MIS is a computer-based system. MIS
actually helps the organization, especially the managers, to organize and evaluate information and data,
and provide information in a timely and efficient manner. This also helps the managers make decisions
based on the information and analysis the MIS provides.

As a business grows in size, the management of information and the decisions based on such data get
more complicated. MIS helps organize such information, so decision making becomes easier right from
simple low-level decisions to strategic plans made at the top level of management.

Since it is a computer system, it includes elements of the computer system as well. It has software (that
help make the decisions), users (managers), databases, all hardware necessary and applications (people
and project management applications) as well. MIS generally focuses on accounting and economic
aspects of a firm, analyzing problems and providing solutions.

The old management system which was at times random, based on intuition and unscientific approaches
has been replaced by MIS. MIS scientifically collects, stores, process and communicates information
relating to various activities across the organization. This helps managers evaluate progress and delegate
work more efficiently, raising the overall efficiency of the organization.

1.2 HISTORY

While it can be contested that the history of management information systems date as far back as
companies using ledgers to keep track of accounting, the modern history of MIS can be divided into
five eras originally identified by Kenneth C. Laudon and Jane Laudon in their seminal
textbook Management Information Systems.

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 First Era – Mainframe and minicomputer computing

 Second Era – Personal computers

 Third Era – Client/server networks
 Fourth Era – Enterprise computing
 Fifth Era – Cloud computing
The first era (mainframe and minicomputer computing) was ruled by IBM and their mainframe
computers for which they supplied both the hardware and software. These computers would often
take up whole rooms and require teams to run them. As technology advanced, these computers were
able to handle greater capacities and therefore reduce their cost. Smaller, more affordable
minicomputers allowed larger businesses to run their own computing centres in-house / on-site / on-
premises.
The second era (personal computers) began in 1965 as microprocessors started to compete with
mainframes and minicomputers and accelerated the process of decentralizing computing power from
large data centres to smaller offices. In the late 1970s, minicomputer technology gave way to
personal computers and relatively low-cost computers were becoming mass market commodities,
allowing businesses to provide their employees access to computing power that ten years before
would have cost tens of thousands of dollars. This proliferation of computers created a ready market
for interconnecting networks and the popularization of the Internet. (The first microprocessor — a
four-bit device intended for a programmable calculator — was introduced in 1971 and
microprocessor-based systems were not readily available for several years. The MITS Altair 8800
was the first commonly known microprocessor-based system, followed closely by the Apple I and II.
It is arguable that the microprocessor-based system did not make significant inroads into
minicomputer use until 1979, when VisiCalc prompted record sales of the Apple II on which it ran.
The IBM PC introduced in 1981 was more broadly palatable to business, but its limitations gated its
ability to challenge minicomputer systems until perhaps the late 1980s to early 1990s.)
The third era (client/server networks) arose as technological complexity increased, costs decreased,
and the end-user (now the ordinary employee) required a system to share information with other
employees within an enterprise. Computers on a common network shared information on a server.
This lets thousands and even millions of people access data simultaneously on networks referred to
as Intranets.
The fourth era (enterprise computing) enabled by high speed networks, consolidated the original
department specific software applications into integrated software platforms referred to as enterprise
software. This new platform tied all aspects of the business enterprise together offering rich
information access encompassing the complete management structure.
The terms management information systems (MIS), information management systems
(IMS), information system (IS) , enterprise resource planning (ERP), computer science, electrical
computer engineering, and information technology management (IT) are often confused. MIS is a
hierarchical subset of information systems. MIS are more organization-focused narrowing in on
leveraging information technology to increase business value. Computer science is more software-
focused dealing with the applications that may be used in MIS.[9] Electrical computer engineering is
product-focused mainly dealing with the architecture behind computer systems. ERP software is a

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subset of MIS and IT management refers to the technical management of an IT department which
may include MIS.
A career in MIS focuses on understanding and projecting the practical use of management
information systems. It studies the interaction, organization and processes among technology, people
and information to solve problems.[10]

While management information systems can be used by any and every level of management, the
decision of which systems to implement generally falls upon the chief information officers (CIO)
and chief technology officers (CTO). These officers are generally responsible for the overall
technology strategy of an organization including evaluating how new technology can help their
organization. They act as decision makers in the implementation process of new MIS.
Once decisions have been made, IT directors, including MIS directors, are in charge of the technical
implementation of the system. They are also in charge of implementing the policies affecting the
MIS (either new specific policies passed down by the CIOs or CTOs or policies that align the new
systems with the organizations overall IT policy). It is also their role to ensure the availability of data
and network services as well as the security of the data involved by coordinating IT activities.
Upon implementation, the assigned users will have the appropriate access to relevant information. It
is important to note that not everyone inputting data into MIS need necessarily be management level.
It is common practice to have inputs to MIS be inputted by non-managerial employees though they
rarely have access to the reports and decision support platforms offered by these systems.

1.3 Types
The following are types of information systems used to create reports, extract data, and assist in the
decision-making processes of middle and operational level managers.

 Decision support systems (DSS) are computer program applications used by middle and higher
management to compile information from a wide range of sources to support problem solving
and decision making. A DSS is used mostly for semi-structured and unstructured decision
problems.
 Executive information systems (EIS) is a reporting tool that provides quick access to
summarized reports coming from all company levels and departments such as accounting,
human resources and operations.
 Marketing information systems are management Information Systems designed specifically for
managing the marketing aspects of the business.
 Accounting information systems are focused accounting functions.
 Human resource management systems are used for personnel aspects.
 Office automation systems (OAS) support communication and productivity in the enterprise by
automating workflow and eliminating bottlenecks. OAS may be implemented at any and all
levels of management.
 School Information Management Systems (SIMS) cover school administration, often including
teaching and learning materials.
 Enterprise resource planning (ERP) software facilitates the flow of information between all
business functions inside the boundaries of the organization and manage the connections to
outside stakeholders.

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1.4 Advantages and disadvantages

The following are some of the benefits that can be attained using MIS:

 MIS reports allow for evaluation of the performance of employees, machinery, and even money
(investment). This allows the management to make decisions about the future.

 Helps in cost control by pointing out turnovers, idle times, wastage of resources etc.

 Compares budgets and plans to actual performances and figures. So, MIS can pinpoint variances
and help the management in taking appropriate actions to correct the situation.

 MIS also identifies the strengths of the organization, allowing the management to take the
opportunity to exploit it more

 Takes away the uncertainty and risks involved with managerial decision making

 Allows for data to flow smoothly along all the various levels of the organization with minimal
effort, and allows for more effective communication as well

 And finally, as far as accounting is concerned, MIS is the source for information regarding the
company’s financial health and current financial situation.

 Improve an organization's operational efficiency, add value to existing products, engender

innovation and new product development, and help managers make better decisions.[13]
 Companies are able to identify their strengths and weaknesses due to the presence of revenue
reports, employee performance records etc. Identifying these aspects can help a company
improve its business processes and operations.
 Giving an overall picture of the company.
 Acting as a communication and planning tool.
 The availability of customer data and feedback can help the company to align its business
processes according to the needs of its customers. The effective management of customer data
can help the company to perform direct marketing and promotion activities.
 MIS can help a company gain a competitive advantage.
 MIS reports can help with decision-making as well as reduce downtime for actionable items.
Some of the disadvantages of MIS systems:

 Retrieval and dissemination are dependent on technology hardware and software.

 Potential for inaccurate information.

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1.5 Enterprise applications

 Enterprise systems—also known as enterprise resource planning (ERP) systems—provide

integrated software modules and a unified database that personnel use to plan, manage, and
control core business processes across multiple locations. Modules of ERP systems may include
finance, accounting, marketing, human resources, production, inventory management, and
distribution.
 Supply chain management (SCM) systems enable more efficient management of the supply chain
by integrating the links in a supply chain. This may include suppliers, manufacturers,
wholesalers, retailers, and final customers.
 Customer relationship management (CRM) systems help businesses manage relationships with
potential and current customers and business partners across marketing, sales, and service.
 Knowledge management system (KMS) helps organizations facilitate the collection, recording,
organization, retrieval, and dissemination of knowledge. This may include documents,
accounting records, unrecorded procedures, practices, and skills. Knowledge management (KM)
as a system covers the process of knowledge creation and acquisition from internal processes
and the external world. The collected knowledge is incorporated in organizational policies and
procedures, and then disseminated to the stakeholders.

1.6 Importance of Information to decision making and strategy building

Data : Data is the raw facts and figures or observations about a physical phenomenon or business
transactions. Data is also objective measurements of the attributes of entities such as people, places,
things and events.

Information: Information is the data placed in a meaningful format and useful context for an end user.

CRITICAL for Hence MIS has

INFORMATION CRUCIAL managers emerged to facilitate

PIVOTAL and organizations effective & efficient

Decision making

1.7 ROLE OF MANAGEMENT INFORMATION SYSTEM

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The role of the MIS in an organization can be compared to the role of heart in the body. The
information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure
blood to all the elements of the body including the brain. The heart work faster and supplies more
blood when needed. It regulates and controls the incoming impure blood, processed it and sends it to
the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal
course and also in crisis.

The MIS plays exactly the same role in the organization. The system ensures that an appropriate data
is collected from the various sources, processed and send further to all the needy destinations. The
system is expected to fulfil the information needs of an individual, a group of individuals, the
management functionaries: the managers and top management.

Here are some of the important roles of the MIS:

i. The MIS satisfies the diverse needs through variety of systems such as query system, analysis
system, modelling system and decision support system.

ii. The MIS helps in strategic planning, management control, operational control and transaction
processing. The MIS helps in the clerical personal in the transaction processing and answers the
queries on the data pertaining to the transaction, the status of a particular record and reference on a
variety of documents.

iii. The MIS helps the junior management personnel by providing the operational data for planning,
scheduling and control , and helps them further in decision-making at the operation level to correct
an out of control situation.

iv. The MIS helps the middle management in short term planning, target setting and controlling the
business functions. It is supported by the use of the management tools of planning and control.

v. The MIS helps the top-level management in goal setting, strategic planning and evolving the
business plans and their implementation.

vi. The MIS plays the role of information generation, communication, problem identification and
helps in the process of decision-making. The MIS, therefore, plays a vital role in the management,
administration and operation of an organization.

1.8 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM

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MIS plays a very important role in the organization; it creates an impact on the organization’s
functions, performance and productivity.

The impact of MIS on the functions is in its management with a good MIS supports the management
of marketing, finance, production and personnel becomes more efficient. The tracking and
monitoring of the functional targets becomes easy. The functional managers are informed about the
progress, achievements and shortfalls in the activity and the targets. The manager is kept alert by
providing certain information indicating and probable trends in the various aspects of business. This
helps in forecasting and long-term perspective planning. The manager’s attention is bought to a
situation which is expected in nature, inducing him to take an action or a decision in the matter.
Disciplined information reporting system creates structure database and a knowledge base for all the
people in the organization. The information is available in such a form that it can be used straight
away by blending and analysis, saving the manager’s valuable time.

The MIS creates another impact in the organization which relates to the understanding of the
business itself. The MIS begins with the definition of data, entity and its attributes. It uses a
dictionary of data, entity and attributes, respectively, designed for information generation in the
organization. Since all the information systems use the dictionary, there is common understanding of
terms and terminology in the organization bringing clarity in the communication and a similar
understanding of an event in the organization.

The MIS calls for a systematization of the business operations for an effective system design. This
leads to streaming of the operations which complicates the system design. It improves the
administration of the business by bringing a discipline in its operations as everybody is required to
follow and use systems and procedures. This process brings a high degree of professionalism in the
business operations.

The goals and objectives of the MIS are the products of business goals and objectives. It helps
indirectly to pull the entire organization in one direction towards the corporate goals and objectives
by providing the relevant information to the organization.

A well-designed system with a focus on the manager makes an impact on the managerial efficiency.
The fund of information motivates an enlightened manager to use a variety of tools of the
management. It helps him to resort to such exercises as experimentation and modelling. The use of
computers enables him to use the tools and techniques which are impossible to use manually. The
ready-made packages make this task simple. The impact is on the managerial ability to perform. It
improves decision-making ability considerably high.

Since, the MIS work on the basic system such as transaction processing and database, the drudgery
of the clerical work is transferred to the computerized system, relieving the human mind for better
work. It will be observed that lot of manpower is engaged in this activity in the organization.
Seventy (70) percent of the time is spent in recording, searching, processing and communicating.
This MIS has a direct impact on this overhead. It creates information –based working culture in the
organization.

The impact of MIS on the functions is in its management. With a good MIS support, the
management of marketing, finance, production and personnel becomes more efficient, the tracking

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and monitoring the functional targets becomes easy. The functional managers are informed about the
progress, achievements and shortfalls in the activity and the targets. The manager is kept alert by
providing certain information indicating the probable trends in the various aspects of business. This
helps in forecasting and long-term perspective planning. The manager'' attention is brought to a
situation which is exceptional in nature, inducing him to take an action or a decision in the matter. A
disciplined information reporting system creates a structured database and a knowledge base for all
the people in the organization. The information is available in such a form that it can be used straight
away or by blending and analysis, saving the manager's valuable time.

The MIS creates another impact in the organization which relates to the understanding of the
business itself. The MIS begins with the definition of a data entity and its attributes. It uses a
dictionary of data, entity and attributes, respectively, designed for information generation in the
organization. Since all the information systems use the dictionary, there is common understanding of
terms and terminology in the organization bringing clarity in the communication and a similar
understanding of an event in the organization.

The MIS calls for a systemization of the business operations for an effective system design. This
leads to streamlining of the operations which complicate the system design. It improves the
administration of the business by bringing a discipline in its operations everybody is required to
follow and use systems and procedures. This process brings a high degree of professionalism in the
business operations.

Since the goals and objective of the MIS are the products of business goals and objectives, it helps
indirectly to pull the entire organization in one direction towards the corporate goals and objectives
by providing the relevant information to the people in the organization.

A well-designed system with a focus on the manager makes an impact on the managerial
efficiency. The fund of information motivates an enlightened manager to use a variety of tools of
the management. It helps him to resort to such exercises as experimentation and modelling. The use
of computers enables him to use the tools and techniques which are impossible to use manually. The
ready-made packages make this task simpler. The impact is on the managerial ability to perform. It
improves the decision-making ability considerably.

1.9 IMPORTANCE OF MIS

It goes without saying that all managerial functions are performed through decision-making; for
taking rational decision, timely and reliable information is essential and is procured through a logical
and well-structured method of information collecting, processing and disseminating to decision
makers. Such a method in the field of management is widely known as MIS. In today’s world of
ever-increasing complexities of business as well as business organization, in order to service and
grow , must have a properly planned, analysed, designed and maintained MIS so that it provides
timely, reliable and useful information to enable the management to take speedy and rational
decisions.

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MIS has assumed all the more important role in today’s environment because a manager has to take
decisions under two main challenges:

First, because of the liberalization and globalization, in which organizations are required to compete
not locally but globally, a manager has to take quick decisions, otherwise his business will be taken
away by his competitors. This has further enhanced the necessity for such a system.

Second, in this information age wherein information is doubling up every two or three years, a
manager has to process a large voluminous data; failing which he may end up taking a wrong
decision that may prove to be very costly to the company.

In such a situation, managers must be equipped with some tools or a system, which can assist them
in their challenging role of decision-making. It is because of the above cited reasons, that today MIS
is considered to be of permanent importance, sometimes regarded as the nerve center of an
organization. Such system assists decision makers in organizations by providing information at
various stages of decision making and thus greatly help the organizations to achieve their
predetermined goals and objectives. On the other hand, the MIS which is not adequately planned for
analysed, designed, implemented or is poorly maintained may provide developed inaccurate,
irrelevant or obsolete information which may prove fatal for the organization. In other words,
organizations today just cannot survive and grow without properly planned, designed, implemented
and maintained MIS. It has been well understood that MIS enables even small organizations to more
than offset the economies of scale enjoyed by their bigger competitors and thus helps in providing a
competitive edge over other organizations.

1.10 Characteristics of MIS:

1. MIS is a consciously developed master plan for information flow. It is an ongoing process. It
operates continuously.

2. We have the best integration and coordination among functional departments, executives and
specialists such as systems analyst, programmer, and computer expert.

3. We have some kind of data processing equipment usually operated electronically. The computer is
the modern equipment for MIS.

4. MIS is future oriented. It anticipates and prevents problems as well as it solves marketing
problems. It is both a preventive as well as curative process in marketing.

5. The gathered data is processed with the help of management science or operations research
techniques. Modern mathematical and statistical tools are available for problem solving in the field
of marketing.

6. Systems analyst designs and operates MIS. It is operated through computers. Operations research
analyst offers solutions to the marketing problem with the help of quantitative decision-making
tools.

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7. Management gets a steady flow of information on a regular basis the right information, for the
right people, at the right time and cost.

1.11 HOW INFORAMATION IS IMPORTANT IN STRATEGY BUILDING

Competition is increasing in all fields and is intensifying as the trend is towards globalization;
leading to intense competitive strategy. In order to succeed ,survive and prosper in the present
scenario strategic competition would have to be achieved by the corporate not only to be in line with
others but also to exceeding to prevailing global standards. This depends on:

 The ability to capture useful information

 Transform it into usable knowledge,
 Disseminate it throughout the organization.

1.12 The Value Chain Concept (Porter’s Value Chain)

The value chain is an analytical frame work to disaggregate a firm into the different
interdependent activities that ass value to its raw materials and bring the firm’s product or
services to a customer, it was developed by Porter and later considered by Porter and Miller in an
information system (IS) context.

The Value chain comprised of primary and supporting activities. Primary activities are those
involved in the physical creation of the product, its marketing and delivery to buyers, and its
support and servicing after sale.

According to Porter (1985), the primary activities are:

1. Inbound Logistics - involve relationships with suppliers and include all the activities required
to receive, store, and disseminate inputs.
2. Operations - are all the activities required to transform inputs into outputs (products and
services).
3. Outbound Logistics - include all the activities required to collect, store, and distribute the
output.
4. Marketing and Sales - activities inform buyers about products and services, induce buyers to
purchase them, and facilitate their purchase.
5. Service - includes all the activities required to keep the product or service working effectively
for the buyer after it is sold and delivered.

Support activities are:

1. Procurement - is the acquisition of inputs, or resources, for the firm.

2. Human Resource management - consists of all activities involved in recruiting, hiring,
training, developing, compensating and (if necessary) dismissing or laying off personnel.
3. Technological Development - pertains to the equipment, hardware, software, procedures and
technical knowledge brought to bear in the firm's transformation of inputs into outputs.

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4. Infrastructure - serves the company's needs and ties its various parts together, it consists of
functions or departments such as accounting, legal, finance, planning, public affairs,
government relations, quality assurance and general management.

1.13 EFFECT OF IT ON STRATEGY AND COMPETITION

IT can support many competitive strategies like

 Operate at reduced costs

 Differentiate and innovate products & services
 Promote growth
 Develop alliances
 Lock in customers and suppliers
 Create switching costs
 Raise barriers to entry
 Leverage investments in IT resources

Alliance Cost leadership

Five Basic
Strategy Strategy
Competitive

Strategies
Differentiation
Growth
Strategy
Strategy Innovative

Strategy

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1.14 INFORMATION SYSTEMS AND SUBSYSTEMS

MIS - Management Information System

Management information system (MIS) refers to the processing of information through computers
and other intelligent devices to manage and support managerial decisions within an organization.

Definition of MIS
MIS - Management Information System can be defined as "a system providing management with
accurate and timely information necessary to facilitate the decision-making process and enable the
organizations planning, control, and operational functions to be carried out effectively".

Conceptual classification of information systems can be divided into two categories

a. Operation support systems (OSS)- basic subsystems of the business firm which
consists of Input Process and Output .
i.

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b. Management Support Systems (MSS)

Subsystems of MIS
Systems may consist of numerous sub-systems, each of which has elements, interactions, and
objectives. Subsystems perform specialized tasks related to the overall objectives of the total system.
A system exists on more than one level and can be composed of subsystems or element parts.

Following are the subsystems of Management Information System:

1. Transaction Processing System

2. Management Reporting System
3. Decision Support System
4. Office Information System
5. Business Expert System

Transaction Processing System - A transaction is defined as an exchange between two or more

business entities. Overall transaction processing, also known as data processing, reflects the
principal business activities of a firm like - sales, production, inventory, shipping, receiving, billing,
accounts payable, accounts receivables, payroll, general ledger, etc. .Transactions are important
events for an organization, and collecting data about them is called transaction processing.
Transaction Processing System's 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.
Transaction processing systems are cross-functional information systems that process data resulting
from the occurrence of business transactions.

 A TPS records internal and external transactions for a company.

 A TPS performs routine and 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 files are updated
periodically; and in online mode, each transaction is recorded as it occurs.
 TPS is a six-step process - Data entry, Data capture, Data validation, Processing and re-
validation, Storage, Output generation, and Query support.

Management Reporting System - Management Reporting Systems are the most elaborate of
management-oriented MIS components. Its main objective is to provide lower and middle
management with printed reports and inquiry capabilities to help maintain operational and
management control of enterprise.

 MRSs are usually developed by information system professionals, rather than by end users.
 MRSs are oriented towards reporting on the past and the present, rather than projecting the
future.
 MRSs largely report on internal company operations.
 MRSs generally have limited analytical capabilities.
 MRSs do not directly support the decision-making process

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 MRSs provide Scheduled or Periodic Reports, Exception Reports, and Demand or Ad-hoc
Report.

Decision Support System - Decision Support Systems are a class of computerized information
systems that support decision-making activities. DSS are interactive computer-based systems and
subsystems intended to help decision makers. A DSS may present information graphically and may
include an expert system or artificial intelligence. DSS tend to be designed primarily to serve
management control level and strategic planning level managers.

 DSSs support for decision-makers in semi-structured and unstructured problems.

 DSSs are more focused on specific decision rather than routine flows of information.
 DSS present information graphically and may include an expert system or artificial
intelligence.
 DSSs are adaptive over time.

Office Information System - Office Information System is an information system that uses
hardware, software, and networks to enhance work flow and better communication between
employees. Office automation refers to the application of computer and communication technology
to office functions. Office automation systems are meant to improve the productivity of managers at
various level of management by providing secretarial assistance and better communication facilities.
Office automation systems are the combination of hardware, software and people in information
systems, that process office transactions and support office activities at all levels of the organization.
These systems include a wide range of support facilities, which include word processing, electronic
filing, electronic mail, message switching, data storage, data and voice communication etc.

Business Expert System - Business expert system is a knowledge-based information system that
uses its knowledge about a specific, complex application area to act as an expert. This system is one
of the knowledge-based information systems. Expert system provides decision support to managers
in the form of advice from an expert in a specific problem area. Expert systems find application in
diverse areas, ranging from medical, engineering and business.

1.15 The Decision-making Process

Managers frequently perceive business challenges in the environment. They set the organizational
strategy and allocate sufficient resources to achieve it. They have to exercise good leadership
qualities to fulfil the above objective. Managers also have to create new products and services and
revitalize the organization frequently with organizational changes and developments. Here IT plays a
vital role in redirecting and redesigning (Business Process Reengineering(BPR)) the organizations.

Management roles and decisions vary at different levels of the organization.

Senior managers make long term strategic decisions about products and services to produce.

Middle level managers carry out the program and plans of the senior management

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Operational level managers take the responsibility for monitoring the firms’ daily activities.

Still all levels of managers are expected to be

 Creative in their own way

 Take decisions to the best of their capabilities
 Develop best solutions to a host of problems which they come across.

The systems developed should give proper support to the managers of all levels in all stages of
planning, controlling and decision making. IT infrastructure provides the foundation or platform on
which the firm can build its specific information systems.

Corporate / Strategic /Long term decisions – Executive Support Systems, Expert systems

Business /Tactical/Short term decisions – DSS,MIS

Functional/Operational/Very short-term decisions – TPS,PCS,OAS

1.16 Systems concept.

A mode of description, which explains an aspect of an object in terms of a set of interacting

elements. The object can, in principle, be anything: a physical object, a body of work, an idea, or an
enterprise.

A system is a group of interacting or interrelated entities that form a unified whole. A system is
described by its spatial and temporal boundaries, surrounded and influenced by its environment,
described by its structure and purpose and expressed in its functioning. Systems are the subjects of
study of systems theory.

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Environment and boundaries

Systems theory views the world as a complex system of interconnected parts. One scopes a
system by defining its boundary; this means choosing which entities are inside the system
and which are outside—part of the environment. One can make simplified representations
(models) of the system in order to understand it and to predict or impact its future behaviour.
These models may define the structure and behaviour of the system.
Natural and human-made systems
There are natural and human-made (designed) systems. Natural systems may not have an
apparent objective but their behaviour can be interpreted as purposeful by an observer.
Human-made systems are made with variable purposes that are achieved by some action
performed by or with the system. The parts of a system must be related; they must be
"designed to work as a coherent entity" — otherwise they would be two or more distinct
systems.

Open systems have input and output flows, representing exchanges of matter, energy or information
with their surroundings.
Theoretical framework
Most systems are open systems, exchanging matter and energy with its surroundings; like a
car, a coffeemaker, or Earth. A closed system exchanges energy, but not matter, with its
environment; like a computer or the project Biosphere 2. An isolated system exchanges

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neither matter nor energy with its environment. A theoretical example of such system is
the Universe.
Process and transformation process
An open system can also be viewed as a bounded transformation process, that is, a black
box that is a process or collection of processes that transforms inputs into outputs. Inputs are
consumed; outputs are produced. The concept of input and output here is very broad. For
example, an output of a passenger ship is the movement of people from departure to
destination.
System model
A system comprises multiple views. Man-made systems may have such views
as concept, analysis, design, implementation, deployment, structure, behaviour, input data,
and output data views. A system model is required to describe and represent all these views.
Systems architecture
A systems architecture, using one single integrated model for the description of multiple
views, is a kind of system model.
Elements of a System? Types of Systems
The basic three elements of a system are:

1. Input
2. Processing
3. Output

In addition of this, four more elements play an important role. These are:

1. Control
2. Feedback
3. Environment

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4. Boundaries & Interface

Therefore, the key elements of a system are: Output

First of all, we must determine what the objectives or goals are, what we intend to achieve. Once we
know our aim, we can try to achieve it in the best possible way.

Input : Once we know the output, we can easily determine what the input should be.

Processes :Here we come to the details of how the inputs & files are converted into outputs.
Processes may modify the input totally or partially depending on the specifications of the output.

Control :Control of the system is the decision-maker that controls the activities of accepting input
processing and producing output.

For E.g. In an organizational context, management as a decision-making body controls the inflow,
handling, and outflow of activities that affect the welfare of the business.

Feedback :The feedback of the output allows it to be measured against some standards&
making adjustments in the processing accordingly.

Environment :The environment is the source of external elements that have an effect on the
system. In fact, it determines how a system must function.

Boundaries & Interfaces :A system should be defined by its boundaries- the limits that identify
its components, processes & interrelationships when interfaces with another system.

For E.g. A teller system in a commercial bank is restricted to the deposits, withdrawals & related
activities of customers checking and savings accounts.

Types of Systems -- Common classifications are

Open & closed systems

Deterministic & probabilistic systems

Physical or abstract systems

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Main Made information systems

1. Open & Closed Systems

An open system is a system that interacts freely with its environment.

This type of system can adapt to changing internal & environmental conditions.

E.g. Business organization, human being.

A closed system is one which is self-contained.

It has no interaction with its environment.

For E.g. A computer program which processes predefined input in a predefined way.

2. Deterministic & Probabilistic Systems

The behaviour of a deterministic system is completely known.

There is no uncertainty involved in defining the outputs of the systems knowing the inputs. This
implies that the interaction between various subsystems is known with certainty.

E.g. Computer Program.

In the probabilistic systems, the behaviour cannot be predicted with certainty, only probabilistic
estimates can be given.

In this case, the interactions between various subsystems cannot be defined with certainty.

3. Physical and Abstract systems

Physical systems are tangible or visible systems. That is a tangible system can be seen, touched,
counted, etc.

Physical systems may operate statically or dynamically.

For E.g. A programmed computer is a dynamic system because of data, program& output change as
the user’s demand changes.

For E.g. A model, an algorithm or an equation.

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3. Man- Made Information System

It is generally believed that information reduces uncertainty about a state or event.

For E.g. Information that the weather will be good tomorrow reduces over uncertainty about
whether or not a football game will be played.

Information System

An information system is an organized set of components for collecting, transmitting, storing&

processing data in order to deliver information for action.

The major information systems are

1. Formal Information Systems

2. Informal Information Systems
3. Computer Based Information Systems

Formal Information Systems

A formal information system is based on the organization represented by the organization chart.

Types of Floral Information System

1. Strategic Information System

2. Tactical Information System
3. Operational Information System

Informal Information Systems

An informal information system is an employee based system designed to meet personnel &
vocational needs & to help in the solution of work-related problems.

It also directs information upward, through indirect channels. In this way, it is considered to be a
useful system because it works within the framework of the business & its stated policies.

Computer-Based Information Systems:

Common computer-based information systems are

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TPS(Transaction Processing System)

The system required to obtain operational information is known as TPS. These systems are
concerned with carrying out simple but repetitive computations on a large number of records like
maintenance of inventory records, payroll preparation, etc.

MIS (Management Information System)

The system required to obtain tactical information is known as MIS. These systems assist lower
management in problem-solving & making a decision. They use the results of transaction processing
& some other information also.

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DSS(Decision Support System)

The system required to obtain strategic information is known as DSS. These systems assist higher
management to make long term decisions. These types of systems handle the unstructured or semi-
structured decision.

1.17 Summary

MIS are made for a speedy access to accurate data and to help the managers achieve their goals.
Management Information System (MIS) is so useful in the organization which it creates an impact
on the organization's performance, functions, and of course productivity. In an organization,
Managers has to take decisions and Management Information System (MIS) is a good help to
support them in making decision by providing information at various stage of decision
making.

An efficient information system creates an impact on the organization's function, performance, and
productivity.
Nowadays, information system and information technology have become a vital part of any
successful business and is regarded as a major functional area like any other functional areas such
as marketing, finance, production and human resources, etc.
Thus, it is important to understand the functions of an information system just like any other
functional area in business. A well-maintained management information system supports the
organization at different levels.
Many firms are using information system that cross the boundaries of traditional business functions
in order to re-engineer and improve vital business processes all across the enterprise. This typical
has involved installing –

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 Enterprise Resource Planning (ERP)

 Supply Chain Management (SCM)
 Customer Relationship Management (CRM)
 Transaction Processing System (TPS)
 Executive Information System (EIS)
 Decision Support System (DSS)
 Knowledge Management Systems (KMS)
 Content Management Systems (CMS)
The strategic role of Management Information System involves using it to develop products,
services, and capabilities that provides a company major advantages over competitive forces it faces
in the global marketplace.
We need an MIS flexible enough to deal with changing information needs of the organization. The
designing of such a system is a complex task. It can be achieved only if the MIS is planned. We
understand this planning and implementation in management development process.
Decision support system is a major segment of organizational information system, because of its
influential role in taking business decisions. It helps all levels of managers to take various
decisions.

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Terminal Questions

1. Very short Answer type

a. What is data?
b. Give the meaning of Information
c. What do you mean by a decision?
d. Define the term EDI
e. What do you mean by global competition?
f. What do you mean by switching cost?
g. Define Office Automation System.
h. What are TPs?
i. Name the basic competitive strategies.
j. Define the term system.
k. What are the different levels of management?
l. Define MRS
m. Define an Expert system.
n. What is meant by IPO cycle?
o. Define an Open system.
p. Define Strategy.

2. Short answer type Questions

a. Why is Information important in Business?
b. How Information Helps decision making?
c. Explain the value chain concept.
d. What is the effect of Information Technology on strategy and competition?
e. Discuss the competitive forces model.
f. Explain different types of systems?
g. Explain how an organization can be considered as a system.
h. How do you say that information is important in strategy building?

3. Essay type questions

a. Explain the conceptual classification of Information system with a neat sketch.

b. With the help of a neat diagram explain Value chain concept and its components?
c. What is meant by a system? Explain briefly the systems concept and types with example.
d. Compare and contrast Operation Support systems and Management Support systems.

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MODULE 2 –TECHNICAL FOUNDATIONS

Objectives:

 Understand thoroughly the basic hardware and software concepts.

 Discuss about File and Database management

2.1 Introduction

The information systems model outlined in the text emphasizes four major concepts that can be
applied to all types of information systems: People, hardware, software, data, and networks, are the
five basic resources of information systems.

Conceptual Foundations of Information Systems

In management literature, it is explained that an information system is a specific type of system in

general. A system is a set of components (subsystems) that function together to accomplish certain
objectives. The objectives of a system are realized in its outputs. Mainly, the objective of an
information system is to offer the appropriate outputs to the members of the organization. All
organizations exist as part of a big system. Information systems are used to help management
through giving feedback on the firm's performance. Feedback is described as the outputs of a system
that are transformed back into inputs in order to control the system's operation. Information systems
are used to compare the data on the actual performance with the standards developed earlier. Based
on the information about the discrepancies, managers can devise remedial actions, which are then
fed back into the firm's operations.

Foundation concepts of information systems in business includes fundamental, behavioural,

technical, business and managerial concepts. Technical components perform three vital roles in
strategy planning and development of an organization.

 It includes support of strategies for competitive advantage at the top levels of the
management.
 Support of decision making by its employees and managers – managerial or middle level
decision making.

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 Support of business process and operations at the lower level of the management.

2.2. Technical foundations of IS

Basic computer concepts – Block Diagram of a computer

The computer age introduced a new element to businesses, universities, and a multitude of other
organizations: a set of components called the information system, which deals with collecting and
organizing data and information. An information system is described as having five components.

Computer hardware

This is the physical technology that works with information. Hardware can be as small as
a smartphone that fits in a pocket or as large as a supercomputer that fills a building. Hardware also
includes the peripheral devices that work with computers, such as keyboards, external disk drives,
and routers. With the rise of the Internet of things, in which anything from home appliances to cars
to clothes will be able to receive and transmit data, sensors that interact with computers are
permeating the human environment.

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Computer software

The hardware needs to know what to do, and that is the role of software. Software can be divided
into two types: system software and application software. The primary piece of system software is
the operating system, such as Windows or iOS, which manages the hardware’s operation.
Application software is designed for specific tasks, such as handling a spreadsheet, creating a
document, or designing a Web page.

Telecommunications

This component connects the hardware together to form a network. Connections can be through
wires, such as Ethernet cables or fibre optics, or wireless, such as through Wi-Fi. A network can be
designed to tie together computers in a specific area, such as an office or a school, through a local
area network (LAN). If computers are more dispersed, the network is called a wide area network
(WAN). The Internet itself can be considered a network of networks.

Databases and data warehouses

This component is where the “material” that the other components work with resides. A database is a
place where data is collected and from which it can be retrieved by querying it using one or more
specific criteria. A data warehouse contains all of the data in whatever form that an organization
needs. Databases and data warehouses have assumed even greater importance in information
systems with the emergence of “big data,” a term for the truly massive amounts of data that can be
collected and analysed.

Human resources and procedures

The final, and possibly most important, component of information systems is the human element: the
people that are needed to run the system and the procedures they follow so that the knowledge in the
huge databases and data warehouses can be turned into learning that can interpret what has happened
in the past and guide future action.

IPO stands for Input Process Output. When you work on your PC you give input to the PC with
the help of keyboard or any input device. The CPU then process it and give you your desired output.

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2.3 Categories of computer systems

Supercomputers

A supercomputer is pretty much exactly what it sounds like. It’s a term used to describe computers
that have the most capable processing power of its time. Early supercomputers in the 60s and 70s
used just a couple processors, while the 90s saw supercomputers with thousands of processors at a
time. Today, modern supercomputers run hundreds of thousands of processors, capable of
computing quadrillions of calculations in just a few nanoseconds. You probably won’t be needing
that kind of power to access Facebook. Actually, supercomputers are used in computational science
to calculate and carry out a plethora of complex tasks. Modelling molecular structures, weather
forecasting, and the field of quantum mechanics, among others, rely on supercomputers and their
intense processing power to solve their equations.

Mainframe Computers

Like supercomputers, mainframe computers are huge, towering machines with lots of processing
power. Mainframe computers are mostly used by corporations, government agencies, and banks –
organizations that need a way to store large quantities of information. They are not the same as
supercomputers. The processing capabilities of mainframe computers are measured in MIPS, or
millions of instructions per second. Supercomputers, on the other hand, are measured in FLOPS, or
floating-point operations per seconds.

Minicomputers

A minicomputer is a multiprocessing machine that can support up to about 200 users at the same
time. It’s like a less powerful mainframe computer, and is about the size of a refrigerator. A server
can be an example of a minicomputer, but not all servers are minicomputers. Despite their name, a
minicomputer is not a personal computer like the desktop machine you might have at home or work.
They are much larger than that. Because of the way’s microcomputers – which we’ll cover next –
have excelled in processing power even beyond minicomputers, and at a much smaller size,
minicomputers have become pretty much obsolete.

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Microcomputers

Microcomputers are the ones people are most familiar with on a daily, non-professional basis, but of
course that doesn’t mean they’re exclusive to the home. Microcomputers are smaller computers that
run on microprocessors in their central processing units. They are much, much cheaper than
supercomputers, mainframe computers and even minicomputers, because they’re meant for everyday
uses that are more practical than professional. The range of capabilities for microcomputers are still
vast, though. A film editor might use a microcomputer to run many intensive editing programs at
once, while a student might use a microcomputer for Facebook and word processing.

Mobile Computers

These are exactly what they sound like – computers that are super small and mobile. You could
argue that a desktop computer is mobile if you need it to be, but mobile computers usually describe
computers that are meant to be carried around and taken from place to place. If a desktop computer
is a microcomputer, then a laptop is a mobile computer. There are so many different types of mobile
computers though, even beyond laptop-like devices. Below is a list of devices that could be
categorized as mobile computers.

 Laptops: Portable computers designed to be carried from place to place. All of its
components are contained inside a panel that functions also as the keyboard, with an attached
screen that can be folded over. Because of their size and convenience, these are some of the
most popular computers for everyday use. However, despite the convenience and ease of use,
they aren’t without problems, as outlined in this guide to laptop problems and possible
solutions.
 Netbooks: Much smaller laptops.
 Tablet: A flat, keyboard-less screen (though some of them come with keyboard attachments)
that utilizes touch-screen functionality for navigation and use. Learn more about the history
and function of tablet computers in this course.
 Handheld game console: Devices like the Game Boy, Game Boy Colour, Game Boy
Advance, Sega Nomad, PlayStation Portable (PSP), and PlayStation Vita are handheld game
consoles. Just like regular consoles, these are tiny computers that let people play games on
the go.
 Calculators: Calculators are computers that carry out computers’ most basic tasks –
calculations! There are many different types of calculators. Basic calculators, graphic
calculators, scientific calculators, programmable calculators, and calculators used for
accounting and other financial purposes.
 Portable media players: Also known as MP3 players. That’s right – your iPod is a mobile
computer too.
 Cell phones and smartphones: The iPhone and the Samsung Galaxy are examples of
powerful smartphones that are also mobile computers.

2.4 Hardware of a computer

Computer hardware includes the physical parts of a computer, such as the case, central processing
unit (CPU), monitor, keyboard, computer data storage, graphics card, sound
card, speakers and motherboard.

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Computer hardware includes the physical parts of a computer, such as the case central processing
unit (CPU), monitor, mouse, keyboard, computer data storage, graphics card, sound
card, speakers and motherboard. By contrast, software is the set of instructions that can be stored and
run by hardware. Hardware is so-termed because it is "hard" or rigid with respect to changes,
whereas software is "soft" because it is easy to change.
Hardware is typically directed by the software to execute any command or instruction. A
combination of hardware and software forms a usable computing system, although other
systems exist with only hardware.
The template for all modern computers is the Von Neumann architecture, detailed in a 1945 paper by
Hungarian mathematician John von Neumann. This describes a design architecture for an
electronic digital computer with subdivisions of a processing unit consisting of an arithmetic logic
unit and processor registers, a control unit containing an instruction register and program counter,
a memory to store both data and instructions, external mass storage, and input and
output mechanisms. The meaning of the term has evolved to mean a stored-program computer in
which an instruction fetch and a data operation cannot occur at the same time because they share a
common bus. This is referred to as the Von Neumann bottleneck and often limits the performance of
the system.

Case
Computer case encloses and holds most of the components of the system. It provides mechanical
support and protection for internal elements such as the motherboard, disk drives, and power
supplies, and controls and directs the flow of cooling air over internal components. The case is also
part of the system to control electromagnetic interference radiated by the computer and protects
internal parts from electrostatic discharge. Large tower cases provide extra internal space for
multiple disk drives or other peripherals and usually stand on the floor, while desktop cases provide
less expansion room. All-in-one style designs include a video display built into the same case.
Portable and laptop computers require cases that provide impact protection for the unit. A current
development in laptop computers is a detachable keyboard, which allows the system to be
configured as a touch-screen tablet. Hobbyists may decorate the cases with coloured lights, paint, or
other features, in an activity called case modding.

Power supply
A power supply unit (PSU) converts alternating current (AC) electric power to low-voltage direct
current (DC) power for the internal components of the computer. Laptops are capable of running
from a built-in battery, normally for a period of hours. The PSU typically uses a switched-mode
power supply (SMPS), with power MOSFETs (power metal–oxide–semiconductor field-effect
transistors) used in the converters and regulator circuits of the SMPS.
Motherboard
The motherboard is the main component of a computer. It is a board with integrated circuitry that
connects the other parts of the computer including the CPU, the RAM, the disk drives
(CD, DVD, hard disk, or any others) as well as any peripherals connected via the ports or
the expansion slots. The integrated circuit (IC) chips in a computer typically contain billions of
tiny metal–oxide–semiconductor field-effect transistors (MOSFETs).

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Components directly attached to or to part of the motherboard include:

 The CPU (central processing unit), which performs most of the calculations which enable a
computer to function, and is referred to as the brain of the computer which get a hold of program
instruction from random-access memory (RAM), interprets and processes it and then send it
backs to computer result so that the relevant components can carry out the instructions. The CPU
is a microprocessor, which is fabricated on a metal–oxide–semiconductor (MOS) integrated
circuit (IC) chip. It is usually cooled by a heat sink and fan, or water-cooling system. Most
newer CPU includes an on-die graphics processing unit (GPU). The clock speed of CPU governs
how fast it executes instructions and is measured in GHz; typical values lie between 1 GHz and
5 GHz. Many modern computers have the option to overclock the CPU which enhances
performance at the expense of greater thermal output and thus a need for improved cooling.
 The chipset, which includes the north bridge, mediates communication between the CPU and the
other components of the system, including main memory; as well as south bridge, which is
connected to the north bridge, and supports auxiliary interfaces and buses; and, finally, a Super
I/O chip, connected through the south bridge, which supports the slowest and most legacy
components like serial ports, hardware monitoring and fan control.
 Random-access memory (RAM), which stores the code and data that are being actively accessed
by the CPU. For example, when a web browser is opened on the computer it takes up memory;
this is stored in the RAM until the web browser is closed. It is typically a type of dynamic
RAM (DRAM), such as synchronous DRAM (SDRAM), where MOS memory chips store data
on memory cells consisting of MOSFETs and MOS capacitors. RAM usually comes on dual in-
line memory modules (DIMMs) in the sizes of 2GB, 4GB, and 8GB, but can be much larger.
 Read-only memory (ROM), which stores the BIOS that runs when the computer is powered on
or otherwise begins execution, a process known as Bootstrapping, or "booting" or "booting up".
The ROM is typically a non-volatile BIOS memory chip, which stores data on floating-gate
MOSFET memory cells.
o The BIOS (Basic Input Output System) includes boot firmware and power management
firmware. Newer motherboards use Unified Extensible Firmware Interface (UEFI) instead of
BIOS.
 Buses that connect the CPU to various internal components and to expand cards for graphics and
sound.
 The CMOS (complementary MOS) battery, which powers the CMOS memory for date and time
in the BIOS chip. This battery is generally a watch battery.
 The video card (also known as the graphics card), which processes computer graphics. More
powerful graphics cards are better suited to handle strenuous tasks, such as playing
intensive video games or running computer graphics software. A video card contains a graphics
processing unit (GPU) and video memory (typically a type of SDRAM), both fabricated
on MOS integrated circuit (MOS IC) chips.

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Expansion cards
Expansion card in computing is a printed circuit board that can be inserted into an expansion slot of
a computer motherboard or backplane to add functionality to a computer system via the expansion
bus. Expansion cards can be used to obtain or expand on features not offered by the motherboard.
Storage devices
A storage device is any computing hardware and digital media that is used for storing, porting and
extracting data files and objects. It can hold and store information both temporarily and permanently
and can be internal or external to a computer, server or any similar computing device. Data storage is
a core function and fundamental component of computers.
Fixed media
Data is stored by a computer using a variety of media. Hard disk drives (HDDs) are found in
virtually all older computers, due to their high capacity and low cost, but solid-state drives (SSDs)
are faster and more power efficient, although currently more expensive than hard drives in terms of
dollar per gigabyte, so are often found in personal computers built post-2007. SSDs use flash
memory, which stores data on MOS memory chips consisting of floating-gate MOSFET memory
cells. Some systems may use a disk array controller for greater performance or reliability.
Removable media
To transfer data between computers, an external flash memory device (such as a memory
card or USB flash drive) or optical disc (such as a CD-ROM, DVD-ROM or BD-ROM) may be
used. Their usefulness depends on being readable by other systems; the majority of machines have
an optical disk drive (ODD), and virtually all have at least one Universal Serial Bus (USB) port.
Input and output peripherals
Input and output devices are typically housed externally to the main computer chassis. The following
are either standard or very common to many computer systems.
Input device
Input devices allow the user to enter information into the system, or control its operation. Most
personal computers have a mouse and keyboard, but laptop systems typically use a touchpad instead
of a mouse. Other input devices include webcams, microphones, joysticks, and image scanners.
Output device
Output devices are designed around the senses of human beings. For example, monitors display text
that can be read, speakers produce sound that can be heard could
include printers, speakers, monitors or a Braille embosser.

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2.5 Software of a computer

Computer software, or simply software, is a collection of data or computer instructions that tell the
computer how to work. This is in contrast to physical hardware, from which the system is built and
actually performs the work. In computer science and software engineering, computer software is
all information processed by computer systems, programs and data. Computer software
includes computer programs, libraries and related non-executable data, such as online
documentation or digital media. Computer hardware and software require each other and neither can
be realistically used on its own.

At the lowest programming level, executable code consists of machine language instructions
supported by an individual processor—typically a central processing unit (CPU) or a graphics
processing unit (GPU). A machine language consists of groups of binary values signifying processor
instructions that change the state of the computer from its preceding state. For example, an
instruction may change the value stored in a particular storage location in the computer—an effect
that is not directly observable to the user. An instruction may also invoke one of many input or
output operations, for example displaying some text on a computer screen; causing state changes
which should be visible to the user. The processor executes the instructions in the order they are
provided, unless it is instructed to "jump" to a different instruction, or is interrupted by the operating
system. As of 2015, most personal computers, smartphone devices and servers have processors with
multiple execution units or multiple processors performing computation together, and computing has
become a much more concurrent activity than in the past.
The majority of software is written in high-level programming languages. They are easier and more
efficient for programmers because they are closer to natural languages than machine
languages.[1] High-level languages are translated into machine language using a compiler or
an interpreter or a combination of the two. Software may also be written in a low-level assembly

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language, which has strong correspondence to the computer's machine language instructions and is
translated into machine language using an assembler.
On virtually all computer platforms, software can be grouped into a few broad categories.
Purpose, or domain of use
Based on the goal, computer software can be divided into:

 Application-software
which is software that uses the computer system to perform special functions or
provide entertainment functions beyond the basic operation of the computer itself. There are
many different types of application software, because the range of tasks that can be performed
with a modern computer is so large—see list of software.
 System-software
which is software for managing computer hardware behaviour, as to provide basic
functionalities that are required by users, or for other software to run properly, if at all. System
software is also designed for providing a platform for running application software,[11] and it
includes the following:
o Operating-systems
which are essential collections of software that manage resources and provide common
services for other software that runs "on top" of them. Supervisory programs, boot
loaders, shells and window systems are core parts of operating systems. In practice, an
operating system comes bundled with additional software (including application software) so
that a user can potentially do some work with a computer that only has one operating system.
o Device-drivers
which operate or control a particular type of device that is attached to a computer. Each
device needs at least one corresponding device driver; because a computer typically has at
minimum at least one input device and at least one output device, a computer typically needs
more than one device driver.
o Utilities
which are computer programs designed to assist users in the maintenance and care of their
computers.
 Malicious-software or malware
which is software that is developed to harm and disrupt computers. As such, malware is
undesirable. Malware is closely associated with computer-related crimes, though some malicious
programs may have been designed as practical jokes.
Nature or domain of execution

 Desktop applications such as web browsers and Microsoft Office, as well

as smartphone and tablet applications (called "apps"). (There is a push in some parts of the
software industry to merge desktop applications with mobile apps, to some extent. Windows 8,
and later Ubuntu Touch, tried to allow the same style of application user interface to be used on
desktops, laptops and mobiles.)
 JavaScript scripts are pieces of software traditionally embedded in web pages that are run
directly inside the web browser when a web page is loaded without the need for a web browser
plugin. Software written in other programming languages can also be run within the web
browser if the software is either translated into JavaScript, or if a web browser plugin that

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supports that language is installed; the most common example of the latter
is ActionScript scripts, which are supported by the Adobe Flash plugin.
 Server software, including:
o Web applications, which usually run on the web server and output dynamically generated
web pages to web browsers, using e.g. PHP, Java, ASP.NET, or even JavaScript that runs on
the server. In modern times these commonly include some JavaScript to be run in the web
browser as well, in which case they typically run partly on the server, partly in the web
browser.
 Plugins and extensions are software that extends or modifies the functionality of another piece of
software, and require that software be used in order to function;
 Embedded software resides as firmware within embedded systems, devices dedicated to a single
use or a few uses such as cars and televisions (although some embedded devices such as wireless
chipsets can themselves be part of an ordinary, non-embedded computer system such as a PC or
smart-hone). In the embedded system context, there is sometimes no clear distinction between
the system software and the application software. However, some embedded systems
run embedded operating systems, and these systems do retain the distinction between system
software and application software (although typically there will only be one, fixed application
which is always run).
 Microcode is a special, relatively obscure type of embedded software which tells the
processor itself how to execute machine code, so it is actually a lower level than machine code.
It is typically proprietary to the processor manufacturer, and any necessary correctional
microcode software updates are supplied by them to users (which is much cheaper than shipping
replacement processor hardware). Thus, an ordinary programmer would not expect to ever have
to deal with it.
Programming tools
Programming tools are also software in the form of programs or applications that software
developers (also known as programmers, coders, hackers or software engineers) use to
create, debug, maintain (i.e. improve or fix), or otherwise support software.
Software is written in one or more programming languages; there are many programming languages
in existence, and each has at least one implementation, each of which consists of its own set of
programming tools. These tools may be relatively self-contained programs such
as compilers, debuggers, interpreters, linkers, and text editors, that can be combined together to
accomplish a task; or they may form an integrated development environment (IDE), which combines
much or all of the functionality of such self-contained tools. IDEs may do this by either invoking the
relevant individual tools or by re-implementing their functionality in a new way. An IDE can make it
easier to do specific tasks, such as searching in files in a particular project. Many programming
language implementations provide the option of using both individual tools or an IDE.
System software is a type of computer program that is designed to run a computer's hardware and
application programs. If we think of the computer system as a layered model, the system software is
the interface between the hardware and user applications.

System software is software designed to provide a platform for other software. Examples of system
software include operating systems like macOS, GNU/Linux and Microsoft
Windows, computational science software, game engines, industrial automation, and software as a
service applications.

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In contrast to system software, software that allows users to do user-oriented tasks such as create text
documents, play games, listen to music, or browse the web are collectively referred to as application
software.
In the early days of computing most application software was custom-written by computer users to
fit their specific hardware and requirements. In contrast, system software was usually supplied by the
manufacturer of the computer hardware and was intended to be used by most or all users of that
system.
The line where the distinction should be drawn is not always clear. Many operating systems bundle
application software. Such software is not considered system software when it can be uninstalled
usually without affecting the functioning of other software. Exceptions could be e.g. web
browsers such as Internet Explorer where Microsoft argued in court that it was system software that
could not be uninstalled. Later examples are Chrome OS and Firefox OS where the browser
functions as the only user interface and the only way to run programs (and other web browsers
cannot be installed in their place), then they can well be argued to be (part of) the operating system
and hence system software.
Another borderline example is cloud-based software. This software provides services to a software
client (usually a web browser or a JavaScript application running in the web browser), not to the user
directly, and is therefore systems software. It is also developed using system
programming methodologies and systems programming languages. Yet from the perspective of
functionality there is little difference between a word processing application and word processing
web application.

Operating systems or system control program

The operating system (prominent examples being Microsoft Windows, macOS, Linux, and z/OS),
allows the parts of a computer to work together by performing tasks like
transferring data between memory and disks or rendering output onto a display device. It provides a
platform (hardware abstraction layer) to run high-level system software and application software.
A kernel is the core part of the operating system that defines an API for applications programs
(including some system software) and an interface to device drivers.
Device drivers, including also computer BIOS and device firmware, provide basic functionality to
operate and control the hardware connected to or built into the computer.
A user interface "allows users to interact with a computer." Either a command-line interface (CLI)
or, since the 1980s a graphical user interface (GUI). Since this is the part of the operating system the
user directly interacts with, it may be considered an application and therefore not system software.

Utility software or system support programs

For historical reasons, some organizations use the term systems programmer to describe a job
function which is more accurately termed systems administrator. Software tools these employees use
is then called system software. This so-called Utility software helps to analyze, configure, optimize
and maintain the computer, such as virus protection. In some publications, the term system
software also includes software development tools (like a compiler, linker or debugger).
Application software (app for short) is a program or group of programs designed for end users.
Examples of an application include a word processor, a spreadsheet, an accounting application,

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a web browser, an email client, a media player, a file viewer, simulators, a console game or a photo
editor. The collective noun application software refers to all applications collectively. This
contrasts with system software, which is mainly involved with running the computer.
Applications may be bundled with the computer and its system software or published separately, and
may be coded as proprietary, open-source or university projects. Apps built for mobile platforms are
called mobile apps.
There are many different and alternative ways in order to classify application software.
By the legal point of view, application software is mainly classified with a black box approach, in
relation to the rights of its final end-users or subscribers (with eventual intermediate and tiered
subscription levels).
Software applications are also classified in respect of the programming language in which the source
code is written or executed, and respect of their purpose and outputs.
By property and use rights
Application software is usually distinguished among two main classes: closed source vs open source
software applications, and among free or proprietary software applications.
Proprietary software is placed under the exclusive copyright, and a software license grants limited
usage rights. The open-closed principle states that software may be "open only for extension, but not
for modification". Such applications can only get add-on by third-parties.
Free and open-source software shall be run, distributed, sold or extended for any purpose, and -being
open- shall be modified or reversed in the same way.
FOSS software applications released under a free license may be perpetual and also royalty-free.
Perhaps, the owner, the holder or third-party enforcer of any right (copyright, trademark, patent,
or ius in re aliena) are entitled to add exceptions, limitations, time decays or expiring dates to the
license terms of use.
Public-domain software is a type of FOSS, which is royalty-free and - openly or reservedly- can be
run, distributed, modified, reversed, republished or created in derivative works without
any copyright attribution and therefore revocation. It can even be sold, but without transferring the
public domain property to other single subjects. Public-domain SW can be released under a licensing
legal statement, which enforces those terms and conditions for an indefinite duration (for a lifetime,
or forever).
By coding language
Since the development and near-universal adoption of the web, an important distinction that has
emerged, has been between web applications — written with HTML, JavaScript and other web-
native technologies and typically requiring one to be online and running a web browser, and the
more traditional native applications written in whatever languages are available for one's
particular type of computer. There has been a contentious debate in the computing community
regarding web applications replacing native applications for many purposes, especially on mobile
devices such as smart phones and tablets. Web apps have indeed greatly increased in popularity for
some uses, but the advantages of applications make them unlikely to disappear soon, if ever.
Furthermore, the two can be complementary, and even integrated.
By purpose and output

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Application software can also be seen as being either horizontal or vertical. Horizontal applications
are more popular and widespread, because they are general purpose, for example word processors or
databases. Vertical applications are niche products, designed for a particular type of industry or
business, or department within an organization. Integrated suites of software will try to handle every
specific aspect possible of, for example, manufacturing or banking worker, or accounting, or
customer service.
There are many types of application software:
LibreOffice Writer, an open-source word processor that is a component of LibreOffice (running
on Linux Mint)

 An application suite consists of multiple applications bundled together. They usually have
related functions, features and user interfaces, and may be able to interact with each other, e.g.
open each other's files. Business applications often come in suites, e.g. Microsoft
Office, LibreOffice and iWork, which bundle together a word processor, a spreadsheet, etc.; but
suites exist for other purposes, e.g. graphics or music.
 Enterprise software addresses the needs of an entire organization's processes and data flows,
across several departments, often in a large distributed environment. Examples
include enterprise resource planning systems, customer relationship management (CRM)
systems and supply chain management software. Departmental Software is a sub-type of
enterprise software with a focus on smaller organizations or groups within a large organization.
(Examples include travel expense management and IT Helpdesk.)
 Enterprise infrastructure software provides common capabilities needed to support
enterprise software systems. (Examples include databases, email servers, and systems for
managing networks and security.)
 Application platform as a service (aPaaS) is a cloud computing service that offers development
and deployment environments for application services.
 Information worker software lets users create and manage information, often for individual
projects within a department, in contrast to enterprise management. Examples include time
management, resource management, analytical, collaborative and documentation tools. Word
processors, spreadsheets, email and blog clients, personal information system, and individual
media editors may aid in multiple information worker tasks.
 Content access software is used primarily to access content without editing, but may include
software that allows for content editing. Such software addresses the needs of individuals and
groups to consume digital entertainment and published digital content. (Examples include media
players, web browsers, and help browsers.)
 Educational software is related to content access software, but has the content or features
adapted for use in by educators or students. For example, it may deliver evaluations (tests), track
progress through material, or include collaborative capabilities.
 Simulation software simulates physical or abstract systems for either research, training or
entertainment purposes.
 Media development software generates print and electronic media for others to consume, most
often in a commercial or educational setting. This includes graphic-art software, desktop
publishing software, multimedia development software, HTML editors, digital-animation
editors, digital audio and video composition, and many others.[13]

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 Product engineering software is used in developing hardware and software products. This
includes computer-aided design (CAD), computer-aided engineering (CAE), computer language
editing and compiling tools, integrated development environments, and application programmer
interfaces.
 Entertainment Software can refer to video games, screen savers, programs to display motion
pictures or play recorded music, and other forms of entertainment which can be experienced
through use of a computing device.
Applications can also be classified by computing platform such as a particular operating system,
delivery network such as in cloud computing and Web 2.0 applications, or delivery devices such
as mobile apps for mobile devices.
The operating system itself can be considered application software when performing simple
calculating, measuring, rendering, and word processing tasks not used to control hardware
via command-line interface or graphical user interface. This does not include application software
bundled within operating systems such as a software calculator or text editor.
Information worker software

 Accounting software
 Data management
o Contact manager
o Spreadsheet
o Database software
 Documentation
o Document automation
o Word processor
o Desktop publishing software
o Diagramming software
o Presentation software
o Email
o Blog software
 Enterprise resource planning
 Financial software
o Day trading software
o Banking software
o Clearing systems
o Arithmetic software
 Field service management
o Workforce management software
 Project management software
o Calendaring software
o Employee scheduling software
o Workflow software
 Reservation systems

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Entertainment software

 Screen savers
 Video games
o Arcade games
o Console games
o Mobile games
o Personal computer games
 Software art
o Demo
 64K intro
Educational software

 Classroom management
 Reference software
 Sales readiness software
 Survey management
 Encyclopaedia software
Enterprise infrastructure software]
Business workflow software

 Database management system (DBMS)

 Digital asset management (DAM) software
 Document management software
 Geographic information system (GIS)
Simulation software

 Computer simulators
o Scientific simulators
o Social simulators
o Battlefield simulators
o Emergency simulators
o Vehicle simulators
 Flight simulators
 Driving simulators
o Simulation games
 Vehicle simulation games
Media development software

 3D computer graphics software

 Animation software
 Graphic art software
o Raster graphics editor

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o Vector graphics editor

 Image organizer
 Video editing software
 Audio editing software
o Digital audio workstation
 Music sequencer
o Score writer
 HTML editor
 Game development tool
Product engineering software
Hardware engineering

o Computer-aided engineering
o Computer-aided design (CAD)
o Computer-aided manufacturing (CAM)
o Finite element analysis
Software engineering

 Compiler software
 Integrated development environment
o Compiler
o Linker
o Debugger
 Version control
 Game development tool
 License manager
A computer language : Such languages are used to create computer code or program code, the
set of instructions forming a computer program which is executed by a computer. It is one of
two components of the software which runs on computer hardware, the other being the data.
Computers can only execute the machine code instructions which are part of their instruction set.
Because these instructions are difficult for humans to read, and writing good programs in machine
code or other low-level programming languages is a time-consuming task, most programmers write
in the source code of a high-level programming language. This source code is translated into
machine code by a compiler or interpreter so that the computer can execute it to perform its tasks. A
compiler produces object code which is usually in machine language but may also be in an
intermediate language which is at a lower level than the source. A runtime system is often used to
execute object code by linking it with commonly used libraries. Bytecode is a lower level of source
which is designed for more efficient interpretation by interpreters.
A low-level programming language is a programming language that provides little or
no abstraction from a computer's instruction set architecture—commands or functions in the
language map closely to processor instructions. Generally, this refers to either machine
code or assembly language. Because of the low (hence the word) abstraction between the language
and machine language, low-level languages are sometimes described as being "close to the

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hardware". Programs written in low-level languages tend to be relatively non-portable, due to being
optimized for a certain type of system architecture.
Low-level languages can convert to machine code without a compiler or interpreter – second-
generation programming languages use a simpler processor called an assembler – and the resulting
code runs directly on the processor. A program written in a low-level language can be made to run
very quickly, with a small memory footprint. An equivalent program in a high-level language can be
less efficient and use more memory. Low-level languages are simple, but considered difficult to use,
due to numerous technical details that the programmer must remember. By comparison, a high-level
programming language isolates execution semantics of a computer architecture from the
specification of the program, which simplifies development.
In computer science, a high-level programming language is a programming language with
strong abstraction from the details of the computer. In contrast to low-level programming languages,
it may use natural language elements, be easier to use, or may automate (or even hide entirely)
significant areas of computing systems (e.g. memory management), making the process of
developing a program simpler and more understandable than when using a lower-level language.
The amount of abstraction provided defines how "high-level" a programming language is.
In the 1960s, high-level programming languages using a compiler were commonly called auto
codes. Examples of auto codes are COBOL and Fortran.
The first high-level programming language designed for computers was Plankalkül, created
by Konrad Zuse. However, it was not implemented in his time, and his original contributions were
largely isolated from other developments due to World War II, aside from the language's influence
on the "Superplan" language by Heinz Rutishauser and also to some degree Algol. The first
significantly widespread high-level language was Fortran, a machine-independent development of
IBM's earlier Autocode systems. Algol, defined in 1958 and 1960 by committees of European and
American computer scientists, introduced recursion as well as nested functions under lexical scope.
It was also the first language with a clear distinction between value and name-parameters and their
corresponding semantics. Algol also introduced several structured programming concepts, such as
the while-do and if-then-else constructs and its syntax was the first to be described in formal
notation – "Backus–Naur form" (BNF). During roughly the same
period, Cobol introduced records (also called structs) and Lisp introduced a fully general lambda
abstraction in a programming language for the first time.

2.6 File management

A file management system is a type of software that manages data files in a computer system. It has
limited capabilities and is designed to manage individual or group files, such as special office
documents and records. It may display report details, like owner, creation date, state of completion
and similar features useful in an office environment.
A file management system is also known as a file manager.
The system may contain features like:

 Assigning queued document numbers for processing

 Owner and process mapping to track various stages of processing

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 Report generation
 Notes
 Status
 Create, modify, copy, delete and other file operations

Functionalities
The functionalities of a File-based Data Management System are as follows:
1. A file based system helps in basic data management for any user.
2. The data stored in the file based system should remain consistent. Any transactions done in
the file based system should not alter the consistency property.
3. The file based system should not allow any illegal or potentially hazardous operations to
occur on the data.
4. The file based system should allow concurrent access by different processes and this should
be carefully coordinated.
5. The file based system should make sure that the data is uniformly structured and stored so it
is easier to access it.
Advantages of File Based System
1. The file Based system is not complicated and is simpler to use.
2. Because of the above point, this system is quite inexpensive.
3. Because the file based system is simple and cheap, it is normally suitable for home users and
owners of small businesses.
4. Since the file based system is used by smaller organisations or individual users, it stores
comparatively lesser amount of data. Hence, the data can be accessed faster and more easily.
Disadvantages of File Based System

1. The File based system is limited to a smaller size and cannot store large amounts of data.
2. This system is relatively uncomplicated but this means it cannot support complicated queries,
data recovery etc.
3. There may be redundant data in the file based system as it does not have a complex
mechanism to get rid of it.
4. The data is not very secure in a file based system and may be corrupted or destroyed.
5. The data files in the file based system may be stored across multiple locations. Consequently,
it is difficult to share the data easily with multiple users.

2.6 Basic Models of File Organization:

Top six models of file organisation. The models are: 1. Pile Access File Organisation 2. Sequential
Access File Organisation 3. Indexed (inverted) Access File Organisation 4. Indexed Sequential

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Access File Organisation 5. Direct Access File Organisation 6. Multi-Ring Access File
Organisation.

1. Pile Access File Organisation:

Pile file contains a set of records in no particular order. The records are stored as they arrive. They

do not follow any particular sequence of attribute values. This method of storing records is adopted

when it is not possible to arrange the records in any logical order, when the fields of the record are

not well defined and the exact usage of the file cannot be anticipated. Files are generally created in

this mode by punching the documents in the order they arrive. The pile so created may be then

organised into another made. Location of a record in a pile file can be done by sequentially searching

the records till the desired value of the key attribute is reached. Addition of new records in a pile file

is very simple. New records are added at the end of the file.

Changes and deletions of records in pile file stored on random access media can be done by locating

the record and changing its contents or flagging the record to indicate that the record has been

invalidated. The file may be reorganized periodically to remove the holes created by the deletion of

records. However, updating of the pile file on sequential access media can be done only by creating

a new file.

2. Sequential Access File Organisation:

In sequential organisation, record occurrences are referenced in the order that they are stored

physically. Data stored on cards and tapes are necessarily stored sequentially. Direct access devices

such as disks may be, but are not necessarily referenced sequentially.

Sometimes the processing is best done through sequential access, even when direct access devices

are used. Such is the case when many records of a file must be accessed to satisfy a request for data.

In a sequential file, records are maintained in the logical sequence of their primary key values. The

processing of a sequential file is conceptually simple but inefficient for random access. However, if

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access to the file is strictly sequential, a sequential file is suitable. A sequential file could be stored

on a sequential storage device such as a magnetic tape.

In a sequential file update, transaction records are in the same sequence as in the master file. Records

from both files are matched on the basis of one record at a time, resulting in an updated master file

as shown in the fig.

Advantages/Merits:

1. Errors in files remain localised.

2. Loading a record requires only the record key.

3. Simple to understand approach.

4. Easy to organize, maintain and understand.

5. Relatively inexpensive input/output (I/O) media and device may be used.

6. Files may be relatively easy to reconstruct since a good measure of built in back up is usually

available.

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7. Efficient and economical if the activity rate, i.e. the proportion of file records to be processed is

high.

Demerits/Disadvantages:

1. Transactions must be sorted and placed in sequence prior to processing.

2. ‘Data’ redundancy is typically high since the same data may be stored in several files sequenced

in different keys.

3. Random enquiries are virtually impossible to handle.

4. Timeliness of data in file deteriorates while batches are being accumulated.

5. Entire file must be processed even when the activity rate is very low.

6. This method is suitable for the small records. If the record is very big, so much time is consumed

in arranging the file.

3. Indexed (inverted) Access File Organisation:

In the inverted file organisation, one index is maintained for each key attribute of the record. The

index file contains the value of the key attribute followed by the addresses of all the records in the

main file with the same value of the key attribute.

In the example of personnel information for several teachers, say the main file contains the

records of six teachers, as follows:

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The index file for key attribute, educational qualification would contain:

Graduate 1, 4, 6

Post-graduate 2, 3 Ph.D. 5

The main file need not contain the values of those attributes for which indices have been maintained

since there is already contained in the index file. The main file may also not be in any particular

sequence. It can just be a pile file.

The inverted file organisation requires three kinds of files to be maintained, the main file, the

Directory files and the index files. The directory file contains the value of the key attributes and the

pointer to the first record in the index file where the addresses of all the records in the main file with

that value of the key attribute are contained. There is a directory file for each key attribute.

Inverted file is very useful where the list of records with specified values of key attribute is required.

For example, we want to have a list of all the teacher posted in Lucknow District or all those

teaching physics. Addition of records in the main file can be made at the end of the file since it is not

maintained in any sequence.

However, corresponding entries have to be made in all the index files for the key attributes of the

record. Changes in key attributes of the record and deletions will also have to be accompanied by

corresponding changes in the index files. The maintenance of index files therefore can be very time

consuming.

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4. Indexed Sequential Access File Organisation:

The retrieval of a record from a sequential file, on average, requires access to half the records in the

file, making such enquiries not only I inefficient but very time consuming for large files. To improve

the query response time of a sequential file, a type of indexing technique can be added.

An index is a set of < key, address > pairs. Indexing associates a set of orderable quantities, which

are usually smaller in number or their properties, provide a mechanism for faster search. The

purpose of indexing is to expedite the search process. Indexes created from a sequential (or sorted)

set of primary keys are referred to as index sequential.

Although the indices and the Data blocks are held together physically, we distinguish between them

logically. We shall use the term index file to describe the indexes and data file to refer to the data

records. The index is usually small enough to be read into the processor memory.

A sequential (for sorted on primary keys) file that is indexed is called an index sequential size. The

index provides for random access to records, while the sequential nature of the file provides easy

access to the subsequent records as well as sequential processing. An additional feature of this file

system is the overflow area. This feature provides additional space for record addition without

necessitating the creation of a new file.

Merits/Advantages:

1. Permits Quick access to records in a relatively efficient way when this activity is a small fraction

of the work load.

2. Permits the efficient and economical use of sequential processing techniques when the activity

rate is high.

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Drawbacks:

1. Less efficient in the use of storage space than some other alternatives.

2. Relatively expensive hardware and software resources are required.

3. Slow retrieval compared to random access as searching of index requires time.

5. Direct Access File Organisation:

Indexes sequential access is suitable for buyer’s stock data because his file must be accessed both

sequentially and directly, and updating is done periodically up to the minute information is not

required. Many applications on the other hand, require both on time retrieval and on both line update

to maintain the most current information possible.

Stockbrokers, for example, need both rapid update and retrieval of stock price data. Airlines require

rapid update and retrieval of passenger data, and automated teller machines require fast access to

banking records.

Direct access to large indexed sequential access method (ISAM) files is slowed by the fact that the

indexes and perhaps overflow areas must be searched before the desired record can be transferred to

main memory. Even worse update of (ISAM), files is slowed by the need to update indexes and

pointers and to transfer records from primary to overflow areas.

The direct access method has been devised to satisfy the need to both update and retrieve data

quickly. In this approach, an algorithm is used to compute the address of a record. The primary key

value is the input to the algorithm and the block address of the record is the output.

To implement the approach, a portion of the storage space is reserved for the file. This space must be

large enough to hold the file plus some allowance for growth. Then an algorithm that generates the

appropriate address for a given primary key is devised.

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The algorithm is commonly called a hashing algorithm and the direct access method is referred to as

hashed access. The process of converting primary key values into addresses is called key-to-address

transformation.

More than one logical record usually fits into a block, so we may think of the reserved storage area

as being broken into record slots sequentially numbered from 1 to n. These sequential numbers are

called relative record numbers, relative pointers, or relative addresses, because they indicate the

position of the record relative to the beginning of the file.

Merits/Advantages:

1. Transactions need not be sorted.

2. Different discs or disc units are not required for updating records as existing records may be

amended by overwriting.

3. It is also possible to process direct file records sequentially in a record key sequence.

4. A direct file organisation is most suitable for interactive on line applications such as air line or

railway reservation systems, teller facility in banking application, etc.

5. Immediate access to records for updating purposes is possible.

6. Random inquiries which are too frequent in business situations can be easily handled.

Demerits/Drawbacks:

1. May be less efficient in the use of storage space than sequentially organised file.

2. Expensive hardware and software resources are required.

3. Relative complexity of programming.

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4. System design around it is complex and costly.

5. Data may be accidentally erased or even written unless special precautions are taken.

6. Special security measures are necessary for on line direct files that are accessible from several

stations.

7. File updation (addition and deletion records) is more difficult as compared to sequential files.

8. Records in the on line may be expressed to the risks of loss of accuracy and a breach of security

Special back up and reconstruction procedures must be established.

6. Multi-Ring Access File Organisation:

Where list of records with specific key attribute values are desired frequently, multi-ring files are

very useful. For example, we may like to have the list of teachers teaching physics or the list of

teachers posted in Lucknow district or the list of teachers retiring in a particular year. In this file

organisation, all the records with a specified key attribute value are changed together.

The directory file, like the one in the inverted file organisation, contains the pointer to the first

record with specified key attribute value – the first record contains the address of the second record

in the chain and the second contains the address of the third record when the last record in the chain

contains pointer to the first record, the records are said to form a ring.

A number of such rings for different key attribute values and for different attributes can be formed.

The directory provides entry point to the rings.

2.7 Database management

A database is an organized collection of data, generally stored and accessed electronically from a
computer system. Where databases are more complex they are often developed using formal design
and modelling techniques.

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A database management system (DBMS) is system software for creating and managing databases. A
DBMS makes it possible for end users to create, read, update and delete data in a database. The most
prevalent type of data management platform, the DBMS essentially serves as an interface between
databases and end users or application programs, ensuring that data is consistently organized and
remains easily accessible.

Functions of a DBMS

The DBMS manages three important things: the data, the database engine that allows data to be
accessed, locked and modified, and the database schema, which defines the database's logical
structure. These three foundational elements help provide concurrency, security, data integrity and
uniform data administration procedures. Typical database administration tasks supported by the
DBMS include change management, performance monitoring and tuning, security, and backup
and recovery. Many database management systems are also responsible for automated rollbacks and
restarts as well as the logging and auditing of activity in databases.

The DBMS can offer both logical and physical data independence. This means it can protect users
and applications from needing to know where data is stored or having to be concerned about changes
to the physical structure of data. As long as programs use the application programming interface
(API) for the database that is provided by the DBMS, developers won't have to modify programs just
because changes have been made to the database.

Central storage and management of data within the DBMS provides:

 Data abstraction and independence.

 Data security.

 A locking mechanism for concurrent access.

 An efficient handler to balance the needs of multiple applications using the same data.

 The ability to swiftly recover from crashes and errors, including restartability and recoverability.

 Robust data integrity capabilities.

 Logging and auditing of activity.

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 Simple access using a standard API.

Uniform administration procedures for data. Database languages
Database languages are special-purpose languages, which allow one or more of the following tasks,
sometimes distinguished as sublanguages:

 Data control language (DCL) – controls access to data;

 Data definition language (DDL) – defines data types such as creating, altering, or dropping
tables and the relationships among them;
 Data manipulation language (DML) – performs tasks such as inserting, updating, or deleting
data occurrences;
 Data query language (DQL) – allows searching for information and computing derived
information.
Database languages are specific to a particular data model. Notable examples include:

 SQL combines the roles of data definition, data manipulation, and query in a single language. It
was one of the first commercial languages for the relational model, although it departs in some
respects from the relational model as described by Codd (for example, the rows and columns of
a table can be ordered). SQL became a standard of the American National Standards
Institute (ANSI) in 1986, and of the International Organization for Standardization (ISO) in
1987. The standards have been regularly enhanced since and is supported (with varying degrees
of conformance) by all mainstream commercial relational DBMSs.
 OQL is an object model language standard (from the Object Data Management Group). It has
influenced the design of some of the newer query languages like JDOQL and EJB QL.
 XQuery is a standard XML query language implemented by XML database systems such
as MarkLogic and eXist, by relational databases with XML capability such as Oracle and DB2,
and also by in-memory XML processors such as Saxon.
 SQL/XML combines XQuery with SQL.

Characteristics of Database Management System

 Provides security and removes redundancy

 Self-describing nature of a database system
 Insulation between programs and data abstraction
 Support of multiple views of the data
 Sharing of data and multiuser transaction processing
 DBMS allows entities and relations among them to form tables.
 It follows the ACID concept ( Atomicity, Consistency, Isolation, and Durability).
 DBMS supports multi-user environment that allows users to access and manipulate data in
parallel.

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DBMS vs. Flat File

DBMS Flat File Management System

Multi-user access It does not support multi-user access

Design to fulfil the need for small and large It is only limited to smaller DBMS system.
businesses

Remove redundancy and Integrity Redundancy and Integrity issues

Expensive. But in the long-term Total Cost of It's cheaper

Ownership is cheap

Easy to implement complicated transactions No support for complicated transactions

Popular DBMS Software

Here, is the list of some popular DBMS system:

 MySQL
 Microsoft Access
 Oracle
 PostgreSQL
 dBASE
 FoxPro
 SQLite
 IBM DB2
 LibreOffice Base
 MariaDB
 Microsoft SQL Server etc.

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Application of DBMS

Sector Use of DBMS

Banking For customer information, account activities,

payments, deposits, loans, etc.

Airlines For reservations and schedule information.

Universities For student information, course registrations,

colleges and grades.

Telecommunication It helps to keep call records, monthly bills,

maintaining balances, etc.

Finance For storing information about stock, sales, and

purchases of financial instruments like stocks
and bonds.

Sales Use for storing customer, product & sales

information.

Manufacturing It is used for the management of supply chain

and for tracking production of items.
Inventories status in warehouses.

HR Management For information about employees, salaries,

payroll, deduction, generation of pay checks,
etc.

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Models of a Database

Hierarchical DBMS

In a Hierarchical database, model data is organized in a tree-like structure. Data is Stored

Hierarchically (top down or bottom up) format. Data is represented using a parent-child relationship.
In Hierarchical DBMS parent may have many children, but children have only one parent.

Network Model

The network database model allows each child to have multiple parents. It helps you to address the
need to model more complex relationships like as the orders/parts many-to-many relationship. In this
model, entities are organized in a graph which can be accessed through several paths.

Relational model

Relational DBMS is the most widely used DBMS model because it is one of the easiest. This model
is based on normalizing data in the rows and columns of the tables. Relational model stored in fixed
structures and manipulated using SQL.

Object-Oriented Model

In Object-oriented Model data stored in the form of objects. The structure which is called classes
which display data within it. It defines a database as a collection of objects which stores both data
members values and operations.

Advantages of DBMS

 DBMS offers a variety of techniques to store & retrieve data

 DBMS serves as an efficient handler to balance the needs of multiple applications using the
same data
 Uniform administration procedures for data
 Application programmers never exposed to details of data representation and storage.
 A DBMS uses various powerful functions to store and retrieve data efficiently.
 Offers Data Integrity and Security
 The DBMS implies integrity constraints to get a high level of protection against prohibited
access to data.
 A DBMS schedules concurrent access to the data in such a manner that only one user can
access the same data at a time
 Reduced Application Development Time

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Disadvantage of DBMS

DBMS may offer plenty of advantages but, it has certain flaws-

 Cost of Hardware and Software of a DBMS is quite high which increases the budget of your
organization.
 Most database management systems are often complex systems, so the training for users to
use the DBMS is required.
 In some organizations, all data is integrated into a single database which can be damaged
because of electric failure or database is corrupted on the storage media
 Use of the same program at a time by many users sometimes lead to the loss of some data.
 DBMS can't perform sophisticated calculations

Database is a collection of related data and data is a collection of facts and figures that can be
processed to produce information.
Mostly data represents recordable facts. Data aids in producing information, which is based on
facts. For example, if we have data about marks obtained by all students, we can then conclude
about toppers and average marks.
A database management system stores data in such a way that it becomes easier to retrieve,
manipulate, and produce information.

Characteristics

Traditionally, data was organized in file formats. DBMS was a new concept then, and all the
research was done to make it overcome the deficiencies in traditional style of data management. A
modern DBMS has the following characteristics −
 Real-world entity − A modern DBMS is more realistic and uses real-world entities to
design its architecture. It uses the behaviour and attributes too. For example, a school
database may use students as an entity and their age as an attribute.
 Relation-based tables − DBMS allows entities and relations among them to form tables. A
user can understand the architecture of a database just by looking at the table names.
 Isolation of data and application − A database system is entirely different than its data. A
database is an active entity, whereas data is said to be passive, on which the database works
and organizes. DBMS also stores metadata, which is data about data, to ease its own
process.
 Less redundancy − DBMS follows the rules of normalization, which splits a relation when
any of its attributes is having redundancy in values. Normalization is a mathematically rich
and scientific process that reduces data redundancy.
 Consistency − Consistency is a state where every relation in a database remains consistent.
There exist methods and techniques, which can detect attempt of leaving database in

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inconsistent state. A DBMS can provide greater consistency as compared to earlier forms of
data storing applications like file-processing systems.
 Query Language − DBMS is equipped with query language, which makes it more efficient
to retrieve and manipulate data. A user can apply as many and as different filtering options
as required to retrieve a set of data. Traditionally it was not possible where file-processing
system was used.
 ACID Properties − DBMS follows the concepts of Atomicity, Consistency, Isolation,
and Durability (normally shortened as ACID). These concepts are applied on transactions,
which manipulate data in a database. ACID properties help the database stay healthy in
multi-transactional environments and in case of failure.
 Multiuser and Concurrent Access − DBMS supports multi-user environment and allows
them to access and manipulate data in parallel. Though there are restrictions on transactions
when users attempt to handle the same data item, but users are always unaware of them.
 Multiple views − DBMS offers multiple views for different users. A user who is in the Sales
department will have a different view of database than a person working in the Production
department. This feature enables the users to have a concentrate view of the database
according to their requirements.
 Security − Features like multiple views offer security to some extent where users are unable
to access data of other users and departments. DBMS offers methods to impose constraints
while entering data into the database and retrieving the same at a later stage. DBMS offers
many different levels of security features, which enables multiple users to have different
views with different features. For example, a user in the Sales department cannot see the
data that belongs to the Purchase department. Additionally, it can also be managed how
much data of the Sales department should be displayed to the user. Since a DBMS is not
saved on the disk as traditional file systems, it is very hard for miscreants to break the code.

Users

A typical DBMS has users with different rights and permissions who use it for different purposes.
Some users retrieve data and some back it up. The users of a DBMS can be broadly categorized as
follows −

 Administrators − Administrators maintain the DBMS and are responsible for

administrating the database. They are responsible to look after its usage and by whom it

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should be used. They create access profiles for users and apply limitations to maintain
isolation and force security. Administrators also look after DBMS resources like system
license, required tools, and other software and hardware related maintenance.
 Designers − Designers are the group of people who actually work on the designing part of
the database. They keep a close watch on what data should be kept and in what format. They
identify and design the whole set of entities, relations, constraints, and views.
 End Users − End users are those who actually reap the benefits of having a DBMS. End
users can range from simple viewers who pay attention to the logs or market rates to
sophisticated users such as business analysts.

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Terminal Questions

Section A

1. Define information technology.

2. Differentiate between Desktop and Workstation.
3. What do you mean by the hardware of a computer?
4. Who is an end user?
5. Define mainframe.
6. Define a program.
7. What is a record file?
8. Define software.
9. What do you mean by software package?
10. Define source code and object code.
11. Differentiate between a file and a database.
12. What is file management?
13. What is data modelling?
14. Write the meaning of field, record and database.
15. Differentiate between pile and sequential file.

Section B

1. With the help of a block diagram, explain the components of a computer.

2. What do you mean by computer system concept?
3. Write a brief note on Mobile computers.
4. Classify the computer systems based on size and capacity.
5. Distinguish between Mini and Mainframe computers.
6. Write a brief note on secondary storage devices.
7. Explain briefly on computer languages.
8. Compare and contrast system and application software.
9. What are the characteristics of DBMS?
10. What are the advantages of Network and Hierarchical model of database?
11. Distinguish between data mining and warehousing.
12. Explain briefly on basic models of file organization.

Section C

 Explain the hardware component of a computer with a neat sketch.

 Write briefly about input devices, output devices and storage media of a computer.
 What are the advantages and disadvantages of traditional file organizations?
 Write a brief note on DBMS and its characteristics.
 Write a brief note on different models of database

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Module 3 –Subsystems of MIS

Discuss on various types of information systems such as operation supporting and managerial
supporting systems.

Acquire knowledge on how IT and IS will be helping all levels of management in decision
making and strategy planning.

 Understand basic lessons on how to survive in this dynamic business world through proper
updation of information and technology.

3.1 INTRODUCTION

3.2 Support Systems: these are to produce variety of information for internal and external use.
They do not emphasize producing the information that can be used by middle and top levels. They
include TPS, PCS and ECS.

3.2 . 1 Transaction processing system

Transaction processing
A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retr
Transaction processing systems also attempt to provide predictable response times to requests, although this
Rather than allowing the user to run arbitrary programs as time-sharing, transaction processing allows only
transaction is usually short duration and the processing activity for each transaction is programmed in advance.

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Transaction processing is a way of computing that divides work into individual, indivisible
operations, called transactions. A transaction processing system (TPS) is a software system, or
software/hardware combination, that supports transaction processing.

Types of Transaction Processing

Transaction processing is distinct from and can be contrasted with other computer processing
models, such as batch processing, time-sharing, and real-time processing.
Batch processing
Batch processing is execution of a series of programs (jobs) on a computer without manual
intervention. Several transactions, called a batch are collected and processed at the same time. The
results of each transaction are not immediately available when the transaction is being
entered;[1] there is a time delay.
Real-time processing
"Real time systems attempt to guarantee an appropriate response to a stimulus or request quickly
enough to affect the conditions that caused the stimulus.” Each transaction in real time processing is
unique; it is not part of a group of transactions.
Processing in real-time
This is the immediate processing of data. It provides instant confirmation of a transaction. It may
involve a large number of users who are simultaneously performing transactions which change data.
Because of advances in technology (such as the increase in the speed of data transmission and
larger bandwidth), real-time updating is possible.

Transaction processing system features

The following features are considered important in evaluating transaction processing systems.
Performance
Fast performance with a rapid response time is critical. Transaction processing systems are usually
measured by the number of transactions they can process in a given period of time.
Continuous availability
The system must be available during the time period when the users are entering transactions. Many
organizations rely heavily on their TPS; a breakdown will disrupt operations or even stop the
business.
Data integrity
The system must be able to handle hardware or software problems without corrupting data. Multiple
users must be protected from attempting to change the same piece of data at the same time, for
example two operators cannot sell the same seat on an airplane.

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Ease of use
Often users of transaction processing systems are casual users. The system should be simple for
them to understand, protect them from data-entry errors as much as possible, and allow them to
easily correct their errors.
Modular growth
The system should be capable of growth at incremental costs, rather than requiring a complete
replacement. It should be possible to add, replace, or update hardware and software components
without shutting down the system.

The following features are desirable in a database system used in transaction processing systems:

 Good data placement: The database should be designed to access patterns of data from many
simultaneous users.
 Short transactions: Short transactions enables quick processing. This avoids concurrency and
paces the systems.
 Real-time backup: Backup should be scheduled between low times of activity to prevent lag of
the server.
 High normalization: This lowers redundant information to increase the speed and improve
concurrency, this also improves backups.
 Archiving of historical data: Uncommonly used data are moved into other databases or backed
up tables. This keeps tables small and also improves backup times.
 Good hardware configuration: Hardware must be able to handle many users and provide quick
response times.

3.2.2. Process control systems (PCS)

Process control systems (PCS), sometimes called industrial control systems (ICS), function as
pieces of equipment along the production line during manufacturing that test the process in a variety
of ways, and return data for monitoring and troubleshooting.

PCS monitor and control physical processes of an organization. For example, a manufacturing unit
will have mainly three types of flows, material flow, information flow and money flow. In material
three m’s are included man, material and machine.

Ex: Petroleum refineries use electronic sensors linked to computer and able to monitor the chemical
and physical processes happening in real-time mode. It will be helping to adjust or resolve any crisis
happens in between.

3.2.3. Enterprise Collaboration systems (ECS)

Enterprise Collaboration systems (ECS) – this system enhances the team and work group
communications and productivity. It is also called as Office Automation systems (OAS).

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Ex: Using E-mails, video conferencing or tele-conferencing we can communicate with different
elements in the supply chain.

3.3. Management Support system

Providing information and support for effective decision making by all types of managers and
business professionals will be supported and assisted by Management Support Systems. MSS
are information systems that provide information to support managerial decision making.
They include:

a. Management Information System (MIS)

b. Decision Support System (DSS)
c. Executive Information System (EIS)

3.3.1 Management Information System (MIS):

A management information system (MIS) is a computer system consisting of hardware and

software that serves as the backbone of an organization's operations. An MIS gathers data
from multiple online systems, analyses the information, and reports data to aid in. Decision-
making.

Structure of MIS

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The purpose of an MIS is improved decision-making, by providing up-to-date, accurate data on a

variety of organizational assets, including:

 Financials
 Inventory
 Personnel
 Project timelines
 Manufacturing
 Real estate
 Marketing
 Raw materials
 R&D
The MIS collects the data, stores it, and makes it accessible to managers who want to analyse the
data by running reports.

Scope of MIS

It is the most commonly and widely used MSS

16. To provide managerial endues with information products that support their
decision-making needs
17. To provide a variety of reports
18. To provide information specified in advance by managers
19. To retrieve information about internal operations from database updates by TPS.
20. To obtain data about the business

Characteristics:

1. MIS is management oriented.

2. Management directed
3. Integrated system
4. Avoids redundancy in data storage
5. Common data flow
6. Heavy planning element
7. Subsystem concept
8. Common database
9. Flexibility and ease of use

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3.3.2 Decision support System (DSS)

Managerial decision making is a process of intelligence, design and choice activities that
result in the selection of particular course of action
DSS is an interactive computer-based system which facilitates the solution of unstructured
problems. Using the DSS leads to specific implementable decisions in solving problems
that would not be amenable to the management since optimization models per se . thus,
DSS supports complex decision making and increase its effectiveness.

Characteristics:
13. Ability to support the solution of complex problems.
14. Fast response to unexpected situations.
15. Helps semi-structured and complex problems.
16. It allows the decision maker to interact in a natural manner due to the design of the
interface.
17. DSS is best conceptualized as a process instead of product.
18. Facilitates in communication \
19. Ability to quickly and objectively try different strategies.

Components:

1. The database
2. The model base
3. The hardware
4. System interface

Herbert Simon Model on Decision Making.

Herbert Simon, the Nobel Prize winning researcher, showed that humans went
through three essential stages in the act of problem solving. He called these the
Intelligence, Design, and Choice stages. Decision making can also be considered as a
type of problem solving.

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Group decision support system (GDSS)

This is also called computerized collaborative work system (CCWS). Here the user interface is
expanded to include computers that are connected in some manner. In this way, members of the
group can communicate via their computers with the DSS or with other members of the group. If
the group meets in the same physical location, they share a public screen for input and output. If
they are geographically disbursed, they each have a window at their computer that displays the
public screen.

Characteristics of a GDSS
A GDSS has a number of unique characteristics to support a group of participants in their decision-
making process:

 Special design to support creative thinking, effective communications and decision-making

techniques
 Easy to use so participants from different backgrounds can all participate effectively
 Flexible so it can incorporate the different perspectives and decision-making styles of the
different participants
 Automated record keeping for future review and analysis
 Parallel communication to allow multiple participants to contribute simultaneously

Components of Group Decision Support System (GDSS)

A group decision support system (GDSS) is composed of 3 main components, namely hardware,
software tools, and people.

 Hardware: It includes electronic hardware like the computer, equipment used for
networking, electronic display boards and audio-visual equipment. It also includes the
conference facility, including the physical set up – the room, the tables, and the chairs –
laid out in such a manner that they can support group discussion and teamwork.

 Software Tools: It includes various tools and techniques, such as electronic

questionnaires, electronic brainstorming tools, idea organizers, tools for setting priority,
policy formation tool, etc. The use of these software tools in a group meeting helps the
group decision-makers to plan, organize ideas, gather information, establish priorities,
take decisions and document the meeting proceedings. As a result, meetings become more
productive.

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 People: It compromises the members participating in the meeting, a trained facilitator

who helps with the proceedings of the meeting, and an expert staff to support the
hardware and software. The GDSS components together provide a favourable
environment for carrying out group meetings.

 Features of Group Decision Support System (GDSS)

 Ease of Use: It consists of an interactive interface that makes working with GDSS simple
and easy.

 Better Decision Making: It provides the conference room setting and various software
tools that facilitate users at different locations to make decisions as a group resulting in
better decisions.

 Emphasis on Semi-structured and Unstructured Decisions: It provides important

information that assists middle and higher-level management in making semi-structured
and unstructured decisions.

 Specific and General Support: The facilitator controls the different phases of the group
decision support system meeting (idea generation, discussion, voting and vote counting,
etc.) what is displayed on the central screen and the type of ranking and voting that takes
place, etc. In addition, the facilitator also provides general support to the group and helps
them to use the system.

 Supports all Phases of the Decision Making: It can support all the four phases of
decision making, viz intelligence, design, choice, and implementation.

 Supports Positive Group Behaviour: In a group meeting, as participants can share their
ideas more openly without the fear of being criticized, they display more positive group
behaviour towards the subject matter of the meeting.

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3.3.3. Executive Support System (ESS/EIS)

An Executive information system (EIS), also known as an Executive support system (ESS), is a
type of management support system that facilitates and supports senior executive
information and decision-making needs. It provides easy access to internal and
external information relevant to organizational goals.
Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.
These information are often external, unstructured and even uncertain. Exact scope and context of
such information is often not known beforehand.
This information is intelligence based −

 Market intelligence
 Investment intelligence
 Technology intelligence

Examples of Intelligent Information

Following are some examples of intelligent information, which is often the source of an ESS −

 External databases
 Technology reports like patent records etc.
 Technical reports from consultants
 Market reports
 Confidential information about competitors
 Speculative information like market conditions
 Government policies
 Financial reports and information

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Features of Executive Information System

Advantages of ESS

 Easy for upper level executive to use

 Ability to analyze trends
 Augmentation of managers' leadership capabilities
 Enhance personal thinking and decision-making
 Contribution to strategic control flexibility
 Enhance organizational competitiveness in the market place
 Instruments of change
 Increased executive time horizons.
 Better reporting system
 Improved mental model of business executive
 Help improve consensus building and communication
 Improve office automation
 Reduce time for finding information
 Early identification of company performance
 Detail examination of critical success factor

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 Better understanding
 Time management
 Increased communication capacity and quality

Disadvantage of ESS

 Functions are limited

 Hard to quantify benefits
 Executive may encounter information overload
 System may become slow
 Difficult to keep current data
 May lead to less reliable and insecure data
 Excessive cost for small company

Expert systems

In artificial intelligence, an expert system is a computer system that emulates the decision-
making ability of a human expert. Expert systems are designed to solve complex problems
by reasoning through bodies of knowledge, represented mainly as if–then rules rather than
through conventional procedural code.

In artificial intelligence, an expert system is a computer system that emulates the decision-
making ability of a human expert. Expert systems are designed to solve complex problems
by reasoning through bodies of knowledge, represented mainly as if–then rules rather than
through conventional procedural code. The first expert systems were created in the 1970s and
then proliferated in the 1980s. systems were among the first truly successful forms of artificial
intelligence (AI) software. An expert system is divided into two subsystems: the inference
engine and the knowledge base. The knowledge base represents facts and rules. The inference
engine applies the rules to the known facts to deduce new facts. Inference engines can also
include explanation and debugging abilities.

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Examples of Expert Systems

 MYCIN: It was based on backward chaining and could identify various bacteria that could cause
acute infections. ...
 DENDRAL: Expert system used for chemical analysis to predict molecular structure.
 PXDES: Expert system used to predict the degree and type of lung cancer.

The purpose of an expert system is to provide reasoned advice at a comparable level to that
provided by a human expert. This capability has two main aims: to enhance the abilities
of leading experts in certain fields and to make a high level of expertise available to less
highly qualified practitioners.
Role of Information in Decision-making

Information plays a vital role in decision-making. Even to take very simple decisions, we
need information. To understand the role played by information in decision-making, we have to
understand how decisions are taken. Decision-making is basically a process that includes the
following stages:

Stages Role of Information

of Decision-
making

Identification One needs information to identify a problem and put it in a structured

and structuring manner. Without information about a problem or opportunity, the
of decision-making process does not even start.
problem/opport
unity

Putting the Without information about the context in which the problem has
problem/ occurred, one cannot take any decision on it. In a way, the .information
about the context defines the problem.
opportunity in
context

Generation of Information is a key ingredient in the generation of alternatives for

alternatives decision-making. One has to have information about possible solutions
to generate alternatives.

Choice of best Based on the information about the suitability of the alternatives, a
alternative choice is made to select the best alternative.

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Decision-making is the most important task of managers in an organization. Therefore, to enable

managers to take good quality decisions, it is very important to provide them with the right kind
of information. Information management in organizations therefore assumes a special
significance. In most organizations, business or otherwise, a systematic systems-based method is
used for information management. Systems based information management works best under a
computerized environment and such computer based information management system is normally
called 'Management Information Systems (MIS)', which provides the service of information
supply to the managers enabling them to take informed decisions. It may be worthwhile to
mention here that MIS does not necessitates the use of computer-based technology, but the use of
computers and information technology makes MIS suitable for business organizations in a
competitive environment as it helps to provide timely and accurate information. MIS done
manually, without the help of computers is neither timely nor accurate.

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Section A

1. What is data processing?

2. What do you mean by management of information?
3. Define MIS.
4. Explain the meaning of MIS.
5. Define TPS.
6. What do you mean by ESS?
7. What do you mean by Ad-hoc report?
8. Define OAS.
9. What are transaction documents?
10. What is a decision?
11. What are the classifications of decisions?
12. Mention the decision phases of decision making.
13. Define knowledge system.
14. What is an expert system?
15. Distinguished between structured and unstructured decision making.
16. Mention three vital role played by an information system.
17. What is meant by DBMS?
18. What are the components of an expert system?
19. What is an unstructured decision?
20. What are the different stages in decision making?

Section B
1. What are the main functions of MIS?
2. Explain the three dimensions of MIS.
3. List various functions of management?
4. What are information generators?
5. Why MIS important in decision making?
6. Which are the different classifications of operating elements of and information
system?
7. Explain Herbert Simons model in decision making.
8. Why MIS is a subject of great interest?
9. Describe information system support for operational control.
10. Describe briefly information system which supports management decision making.
11. Write a brief note on TPS and its types?
12. Differentiate between Batch processing and distributed processing systems?
13. What is an Online Real Time Systems?
14. What are the different levels of management decisions in an organization?

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15. Compare and contrast different types of decisions found in an organization at different
levels?
16. Describe the conceptual structure of MIS.
17. Explain the role of MIS in managing the corporate undertaking under the global
environment.
18. What are the four stages of decision making?
19. Discuss how computers are helping in Finance systems and Personnel systems?
20. Enumerate the importance of developments in IT in the current business scenario.

Section C

1. Why MIS is treated as an integrated system? Discuss various elements of MIS.

2. With the help of a neat diagram , explain the different stages in Decision making
process in an organization.
3. Mention the important characteristics of MIS. Show how MIS facilitate the general
functions like planning, organizing and controlling ?
4. Describe with a suitable diagram, the conceptual frames work of MIS.
5. What are the steps involved in systems approach? Explain with example.

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Module 4: Information Subsystems and Organization.

Objectives:

 Know the concept and meaning of ERP

 Understand the principles used in BPR
 Know the importance of AI and its applications
 Explains how E-CRM is important in current Business applications.

4.1 Introduction:

Every Information Subsystem have typical goals. E.g.: ERP coordinate major systems across a firm
and permit seamless access to any information needed for decision making. In practice, these goals
are garbled or subverted. This applies across information system categories that refer to functional
area systems and categories that refer to idealized systems used in any functional area. Each system
category emphasise certain features that may be relevant in many situations e.g.: the absence of DSS
like features in a TPS might indicate a direction for future improvement . Certain features can be
transferred to systems of other type.

IS subsystems being imprecise and are in continual flux. As a result, it is sometimes difficult to
understand what someone else means by using the categories or related terms. E.g.: someone
speaking of ERP system might mean an enterprise wide information system or only a single module
purchased from ERP vendor.

Organizations and information systems have a mutual influence on each other. The information
needs of an organization affect the design of information systems and an organization must be open
itself to the influences of information systems in order to more fully benefit from new technologies.

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The organization's environment, culture, structure, standard operating procedures, politics and
management decisions are mediating factors that influence the interaction between information
technology and organizations.

THE TWO-WAY RELATIONSHIP BETWEEN ORGANIZATIONS AND INFORMATION

TECHNOLOGY
This complex two-way relationship is mediated by many factors, not the least of which are the
decisions made—or not made—by managers. Other factors mediating the relationship include the
organizational culture, structure, politics, business processes, and environment.

From a technical view, an organization is a formal, legal, social structure that processes resources,
or inputs, to produce outputs. The firm is seen as infinitely malleable, with capital and labour
substituting for each other quite easily.

A behavioural definition of an organization is that it is a collection of rights, privileges, obligations,

and responsibilities that is balanced over time through conflict and conflict resolution. This
definition suggests that building new information systems or rebuilding old ones involves much
more than a technical rearrangement of machines or workers. Technological change requires
changes in who owns and controls information, who has the right to access and update that
information, and who makes decisions about whom, when, and how.

At the most basic level, an information system (IS) is a set of components that work together to
manage data processing and storage. Its role is to support the key aspects of running an
organization, such as communication, record-keeping, decision making, data analysis and more.
Companies use this information to improve their business operations, make strategic decisions and
gain a competitive edge.

Information systems typically include a combination of software, hardware and telecommunication

networks. For example, an organization may use customer relationship management systems to
gain a better understanding of its target audience, acquire new customers and retain existing
clients. This technology allows companies to gather and analyze sales activity data, define the
exact target group of a marketing campaign and measure customer satisfaction.

Uses and Applications

There are different types of information systems and each has a different role. Business
intelligence (BI) systems, for instance, can turn data into valuable insights.

This kind of technology allows for faster, more accurate reporting, better business decisions and
more efficient resource allocation. Another major benefit is data visualization, which enables
analysts to interpret large amounts of information, predict future events and find patterns in
historical data.

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Organizations can also use enterprise resource planning (ERP) software to collect, manage and
analyze data across different areas, from manufacturing to finance and accounting. This type of
information system consists of multiple applications that provide a 360-degree view of business
operations. NetSuite ERP, PeopleSoft, Odoo and Intacct are just a few examples of ERP software.

Like other information systems, ERP provides actionable insights and helps you decide on the next
steps. It also makes it easier to achieve regulatory compliance, increase data security and share
information between departments. Additionally, it helps to ensure that all of your financial records
are accurate and up-to-date.

In the long run, ERP software can reduce operational costs, improve collaboration and boost your
revenue. Nearly half of the companies that implement this system report major benefits within six
months.

At the end of the day, information systems can give you a competitive advantage and provide the
data you need to make faster, smarter business decisions. Depending on your needs, you can opt
for transaction processing systems, knowledge management systems, decision support systems and
more. When choosing one, consider your budget, industry and business size. Look for an
information system that aligns with your goals and can streamline your day-to-day operations.

4.2 ENTERPRISE RESOURCE PLANNING (ERP)

Enterprise resource planning (ERP) is the integrated management of main business processes,
often in real time and mediated by software and technology.
ERP is usually referred to as a category of business management software—typically a suite of
integrated applications—that an organization can use to collect, store, manage, and interpret data
from many business activities.
ERP provides an integrated and continuously updated view of core business processes using
common databases maintained by a database management system. ERP systems track business
resources—cash, raw materials, production capacity—and the status of business commitments:
orders, purchase orders, and payroll. The applications that make up the system share data across
various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP
facilitates information flow between all business functions and manages connections to
outside stakeholders.
Enterprise system software is a multibillion-dollar industry that produces components supporting a
variety of business functions. IT investments have, as of 2011, become one of the largest categories
of capital expenditure in United States-based businesses. Though early ERP systems focused on
large enterprises, smaller enterprises increasingly use ERP systems.
The ERP system integrates varied organizational systems and facilitates error-free transactions and
production, thereby enhancing the organization's efficiency. However, developing an ERP system
differs from traditional system development. ERP systems run on a variety of computer
hardware and network configurations, typically using a database as an information repository.

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ERP systems experienced rapid growth in the 1990s. Because of the year 2000 problem many
companies took the opportunity to replace their old systems with ERP.
ERP systems initially focused on automating back office functions that did not directly
affect customers and the public. Front office functions, such as customer relationship
management (CRM), dealt directly with customers, or e-business systems such as e-commerce, e-
government, e-telecom, and e-finance—or supplier relationship management (SRM) became
integrated later, when the internet simplified communicating with external parties.
"ERP II" was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead—Long Live
ERP II. It describes web–based software that provides real–time access to ERP systems to
employees and partners (such as suppliers and customers). The ERP II role expands traditional ERP
resource optimization and transaction processing. Rather than just manage buying, selling, etc.—
ERP II leverages information in the resources under its management to help the enterprise
collaborate with other enterprises. ERP II is more flexible than the first-generation ERP. Rather than
confine ERP system capabilities within the organization, it goes beyond the corporate walls to
interact with other systems. Enterprise application suite is an alternate name for such systems. ERP
II systems are typically used to enable collaborative initiatives such as supply chain management
(SCM), customer relationship management (CRM), and business intelligence (BI) among business
partner organizations through the use of various e-business technologies. Developers now make
more effort to integrate mobile devices with the ERP system. ERP vendors are extending ERP to
these devices, along with other business applications. Technical stakes of modern ERP concern
integration—hardware, applications, networking, supply chains. ERP now covers more functions
and roles—including decision making, stakeholders'
relationships, standardization, transparency, globalization, etc.

CHARACTERISTICS

ERP systems typically include the following characteristics:

 An integrated system
 Operates in (or near) real time
 A common database that supports all the applications
 A consistent look and feel across module
 Installation of the system with elaborate application/data integration by the Information
Technology (IT) department, provided the implementation is not done in small steps
 Deployment options include: on-premises, cloud hosted, or SaaS

Functional Areas

An ERP system covers the following common functional areas. In many ERP systems, these are
called and grouped together as ERP modules:

 Financial accounting: general ledger, fixed assets, payables including vouchering, matching and
payment, receivables and collections, cash management, financial consolidation
 Management accounting: budgeting, costing, cost management, activity based costing

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 Human resources: recruiting, training, rostering, payroll, benefits, retirement and pension
plans, diversity management, retirement, separation
 Manufacturing: engineering, bill of materials, work orders, scheduling, capacity, workflow
management, quality control, manufacturing process, manufacturing projects, manufacturing
flow, product life cycle management
 Order processing: order to cash, order entry, credit checking, pricing, available to
promise, inventory, shipping, sales analysis and reporting, sales commissioning
 Supply chain management: supply chain planning, supplier scheduling, product
configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, put
away, picking and packing)
 Project management: project planning, resource planning, project costing, work breakdown
structure, billing, time and expense, performance units, activity management
 Customer relationship management (CRM): sales and marketing, commissions, service,
customer contact, call center support – CRM systems are not always considered part of ERP
systems but rather business support systems (BSS)
 Data services: various "self–service" interfaces for customers, suppliers and/or employees
 ERP systems connect to real–time data and transaction data in a variety of ways. These
systems are typically configured by systems integrators, who bring unique knowledge on
process, equipment, and vendor solutions.
 Direct integration—ERP systems have connectivity (communications to plant floor
equipment) as part of their product offering. This requires that the vendors offer specific
support for the plant floor equipment their customers operate.
 Database integration—ERP systems connect to plant floor data sources through staging
tables in a database. Plant floor systems deposit the necessary information into the database.
The ERP system reads the information in the table. The benefit of staging is that ERP
vendors do not need to master the complexities of equipment integration. Connectivity
becomes the responsibility of the systems integrator.
 Enterprise appliance transaction modules (EATM)—These devices communicate directly
with plant floor equipment and with the ERP system via methods supported by the ERP
system. EATM can employ a staging table, web services, or system–specific program
interfaces (APIs). An EATM offers the benefit of being an off–the–shelf solution.
 Custom–integration solutions—Many system integrators offer custom solutions. These
systems tend to have the highest level of initial integration cost, and can have a higher long-
term maintenance and reliability costs. Long term costs can be minimized through careful
system testing and thorough documentation. Custom–integrated solutions typically run
on workstation or server-class computers.
Advantages
The most fundamental advantage of ERP is that the integration of a myriad of business processes
saves time and expense. Management can make decisions faster and with fewer errors. Data
becomes visible across the organization. Tasks that benefit from this integration include:[58]

 Sales forecasting, which allows inventory optimization.

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 Chronological history of every transaction through relevant data compilation in every area of
operation.
 Order tracking, from acceptance through fulfilment
 Revenue tracking, from invoice through cash receipt
 Matching purchase orders (what was ordered), inventory receipts (what arrived),
and costing (what the vendor invoiced)
ERP systems centralize business data, which:

 Eliminates the need to synchronize changes between multiple systems—consolidation of

finance, marketing, sales, human resource, and manufacturing applications
 Brings legitimacy and transparency to each bit of statistical data
 Facilitates standard product naming/coding
 Provides a comprehensive enterprise view (no "islands of information"), making real–time
information available to management anywhere, anytime to make proper decisions
 Protects sensitive data by consolidating multiple security systems into a single structure
Benefits

 ERP creates a more agile company that adapts better to change. It also makes a company more
flexible and less rigidly structured so organization components operate more cohesively,
enhancing the business—internally and externally.
 ERP can improve data security in a closed environment. A common control system, such as the
kind offered by ERP systems, allows organizations the ability to more easily ensure key
company data is not compromised. This changes, however, with a more open environment,
requiring further scrutiny of ERP security features and internal company policies regarding
security.
 ERP provides increased opportunities for collaboration. Data takes many forms in the modern
enterprise, including documents, files, forms, audio and video, and emails. Often, each data
medium has its own mechanism for allowing collaboration. ERP provides a collaborative
platform that lets employees spend more time collaborating on content rather than mastering the
learning curve of communicating in various formats across distributed systems.
 ERP offers many benefits such as standardization of common processes, one integrated system,
standardized reporting, improved key performance indicators (KPI), and access to common data.
One of the key benefits of ERP; the concept of integrated system, is often misinterpreted by the
business. ERP is a centralized system that provides tight integration with all major enterprise
functions be it HR, planning, procurement, sales, customer relations, finance or analytics, as well
to other connected application functions. In that sense ERP could be described as "Centralized
Integrated Enterprise System (CIES)"

Disadvantages

 Customization can be problematic. Compared to the best-of-breed approach, ERP can be seen as
meeting an organization's lowest common denominator needs, forcing the organization to find
workarounds to meet unique demands.
 Re-engineering business processes to fit the ERP system may damage competitiveness or divert
focus from other critical activities.

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 ERP can cost more than less integrated or less comprehensive solutions.
 High ERP switching costs can increase the ERP vendor's negotiating power, which can increase
support, maintenance, and upgrade expenses.
 Overcoming resistance to sharing sensitive information between departments can divert
management attention.
 Integration of truly independent businesses can create unnecessary dependencies.
 Extensive training requirements take resources from daily operations.
 Harmonization of ERP systems can be a mammoth task (especially for big companies) and
requires a lot of time, planning, and money.
 Critical challenges include disbanding the project team very quickly after implementation,
interface issues, lack of proper testing, time zone limitations, stress, offshoring, people's
resistance to change, a short hyper-care period, and data cleansing.

4.3 Business Process RE-engineering (BPR)

Business process re-engineering (BPR) is a business management strategy, originally pioneered in
the early 1990s, focusing on the analysis and design of workflows and business processes within an
organization. BPR aimed to help organizations fundamentally rethink how they do their work in
order to improve customer service, cut operational costs, and become world-class competitors.[1]
BPR seeks to help companies radically restructure their organizations by focusing on the ground-up
design of their business processes. According to early BPR proponent Thomas H. Davenport (1990),
a business process is a set of logically related tasks performed to achieve a defined business
outcome. Re-engineering emphasized a holistic focus on business objectives and how processes
related to them, encouraging full-scale recreation of processes rather than iterative optimization of
sub-processes.
Business process reengineering is also known as business process redesign, business transformation,
or business process change management.
Framework
An easy to follow seven step INSPIRE framework is developed by Bhudeb Chakravarti which can
be followed by any Process Analyst to perform BPR. The seven steps of the framework
are Initiate a new process reengineering project and prepare a business case for the
same; Negotiate with senior management to get approval to start the process reengineering
project; Select the key processes that need to be reengineered; Plan the process reengineering
activities; Investigate the processes to analyze the problem areas; Redesign the selected processes
to improve the performance and Ensure the successful implementation of redesigned processes
through proper monitoring and evaluation.
Factors that are important to BPR success include:

1. BPR team composition.

2. Business needs analysis.
3. Adequate IT infrastructure.
4. Effective change management.
5. Ongoing continuous improvement

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The aspects of a BPM effort that are modified include organizational structures, management
systems, employee responsibilities, and performance measurements, incentive systems, skills
development, and the use of IT. BPR can potentially affect every aspect of how business is
conducted today. Wholesale changes can cause results ranging from enviable success to complete
failure.
If successful, a BPM initiative can result in improved quality, customer service, and
competitiveness, as well as reductions in cost or cycle time. However, 50-70% of reengineering
projects are either failures or do not achieve significant benefit.
There are many reasons for sub-optimal business processes which include:

1. One department may be optimized at the expense of another

2. Lack of time to focus on improving business process
3. Lack of recognition of the extent of the problem
4. Lack of training
5. People involved use the best tool they have at their disposal which is usually Excel to fix
problems
6. Inadequate infrastructure
7. Overly bureaucratic processes
8. Lack of motivation
Many unsuccessful BPR attempts may have been due to the confusion surrounding BPR, and how it
should be performed. Organizations were well aware that changes needed to be made but did not
know which areas to change or how to change them. As a result, process reengineering is a
management concept that has been formed by trial and error or, in other words, practical experience.
As more and more businesses reengineer their processes, knowledge of what caused the successes or
failures is becoming apparent. To reap lasting benefits, companies must be willing to examine how
strategy and reengineering complement each other by learning to quantify strategy in terms of cost,
milestones, and timetables, by accepting ownership of the strategy throughout the organization, by
assessing the organization's current capabilities and process realistically, and by linking strategy to
the budgeting process. Otherwise, BPR is only a short-term efficiency exercise.
The role of information technology Information technology (IT) has historically played an
important role in the reengineering concept . It is regarded by some as a major enabler for
new forms of working and collaborating within an organization and across organizational
borders.
BPR literature identified several so-called disruptive technologies that were supposed to challenge
traditional wisdom about how work should be performed.

 Shared databases, making information available at many places

 Expert systems, allowing generalists to perform specialist tasks
 Telecommunication networks, allowing organizations to be centralized and decentralized at the
same time
 Decision-support tools, allowing decision-making to be a part of everybody's job
 Wireless data communication and portable computers, allowing field personnel to work office
independent
 Interactive videodisk, to get in immediate contact with potential buyers

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 Automatic identification and tracking, allowing things to tell where they are, instead of requiring
to be found
 High performance computing, allowing on-the-fly planning and revisioning
In the mid-1990s especially, workflow management systems were considered a significant
contributor to improved process efficiency. Also, ERP (enterprise resource planning) vendors, such
as SAP, JD Edwards, Oracle, and PeopleSoft, positioned their solutions as vehicles for business
process redesign and improvement.

4.4 Artificial Intelligence (AI)

Artificial intelligence (AI) refers to the simulation of human intelligence in machines that are
programmed to think like humans and mimic their actions. The term may also be applied to any
machine that exhibits traits associated with a human mind such as learning and problem-solving.

Understanding Artificial Intelligence

When most people hear the term artificial intelligence, the first thing they usually think of is robots.
That's because big-budget films and novels weave stories about human-like machines that wreak
havoc on Earth. But nothing could be further from the truth.

Artificial intelligence is based on the principle that human intelligence can be defined in a way that a
machine can easily mimic it and execute tasks, from the simplest to those that are even more
complex. The goals of artificial intelligence include learning, reasoning, and perception.

As technology advances, previous benchmarks that defined artificial intelligence become outdated.
For example, machines that calculate basic functions or recognize text through optimal character
recognition are no longer considered to embody artificial intelligence, since this function is now
taken for granted as an inherent computer function.

AI is continuously evolving to benefit many different industries. Machines are wired using a cross-
disciplinary approach based in mathematics, computer science, linguistics, psychology, and more.

Algorithms often play a very important part in the structure of artificial intelligence, where simple
algorithms are used in simple applications, while more complex one’s help frame strong artificial
intelligence.

Applications of Artificial Intelligence

The applications for artificial intelligence are endless. The technology can be applied to many
different sectors and industries. AI is being tested and used in the healthcare industry for dosing
drugs and different treatment in patients, and for surgical procedures in the operating room.

Other examples of machines with artificial intelligence include computers that play chess and self-
driving cars. Each of these machines must weigh the consequences of any action they take, as each
action will impact the end result. In chess, the end result is winning the game. For self-driving cars,

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the computer system must account for all external data and compute it to act in a way that prevents a
collision.

Artificial intelligence also has applications in the financial industry, where it is used to detect and
flag activity in banking and finance such as unusual debit card usage and large account deposits—all
of which help a bank's fraud department. Applications for AI are also being used to help streamline
and make trading easier. This is done by making supply, demand, and pricing of securities easier to
estimate.

In computer science, artificial intelligence (AI), sometimes called machine intelligence,

is intelligence demonstrated by machines, in contrast to the natural intelligence displayed
by humans and animals. Leading AI textbooks define the field as the study of "intelligent agents":
any device that perceives its environment and takes actions that maximize its chance of successfully
achieving its goals. Colloquially, the term "artificial intelligence" is often used to describe machines
(or computers) that mimic "cognitive" functions that humans associate with the human mind, such as
"learning" and "problem solving".
As machines become increasingly capable, tasks considered to require "intelligence" are often
removed from the definition of AI, a phenomenon known as the AI effect. A quip in Tesler's
Theorem says "AI is whatever hasn't been done yet." For instance, optical character recognition is
frequently excluded from things considered to be AI, having become a routine technology Modern
machine capabilities generally classified as AI include successfully understanding human
speech, competing at the highest level in strategic game systems (such
as chess and Go), autonomously operating cars, intelligent routing in content delivery networks,
and military simulations.
Artificial intelligence was founded as an academic discipline in 1955, and in the years since has
experienced several waves of optimism, followed by disappointment and the loss of funding (known
as an "AI winter"), followed by new approaches, success and renewed funding. For most of its
history, AI research has been divided into sub-fields that often fail to communicate with each
other. These sub-fields are based on technical considerations, such as particular goals (e.g. "robotics"
or "machine learning"),the use of particular tools ("logic" or artificial neural networks), or deep
philosophical differences. Sub-fields have also been based on social factors (particular institutions or
the work of particular researchers).
The traditional problems (or goals) of AI research include reasoning, knowledge
representation, planning, learning, natural language processing, perception and the ability to move
and manipulate objects. General intelligence is among the field's long-term goals. Approaches
include statistical methods, computational intelligence, and traditional symbolic AI. Many tools are
used in AI, including versions of search and mathematical optimization, artificial neural networks,
and methods based on statistics, probability and economics. The AI field draws upon computer
science, information engineering, mathematics, psychology, linguistics, philosophy, and many other
fields.
The field was founded on the assumption that human intelligence "can be so precisely described that
a machine can be made to simulate it". This raises philosophical arguments about the nature of
the mind and the ethics of creating artificial beings endowed with human-like intelligence. These
issues have been explored by myth, fiction and philosophy since antiquity. Some people also

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consider AI to be a danger to humanity if it progresses unabated. Others believe that AI, unlike
previous technological revolutions, will create a risk of mass unemployment.
In the twenty-first century, AI techniques have experienced a resurgence following concurrent
advances in computer power, large amounts of data, and theoretical understanding; and AI
techniques have become an essential part of the technology industry, helping to solve many
challenging problems in computer science, software engineering and operations research.
In the business world, artificial intelligence is enabling businesses to work smarter and faster,
doing more with significantly less. As technology and society continue to advance, more
organisations are looking for powerful, sophisticated solutions that will improve and streamline
operations.

Today, there are numerous applications of artificial intelligence in the consumer and business
spaces, from Apple’s Siri to Google’s DeepMind. Siri, for example, uses natural language
processing (NLP) to interpret voice commands and respond accordingly. Google’s DeepMind, on the
other hand, uses deep learning. It is capable of making connections and reaching meanings without
relying on predefined behavioural algorithms, instead learning from experience and using raw data
as its inputs. In fact, by applying findings from DeepMind, Google was able to improve the
efficiency of its own power centres, reducing the energy used for cooling by 40%.

Current industries applying artificial intelligence to day-to-day operations

In some industries, AI is capable of automating business intelligence and analytics processes,

providing a holistic end-to-end solution. In others, computer vision is being deployed to map
and navigate terrain, contributing to the development of smart, self-driving cars that are learning to
drive as humans do. Below are just a few examples of how AI is being used to improve efficiency:

 Banking and Finance – fraud detection

Many banks use the various applications of artificial intelligence to detect fraudulent activity. The
AI software is given a very large sample of data that includes fraudulent and non-fraudulent
purchases and is trained to determine whether a transaction is valid based on data. Over time, the
software becomes incredibly adept at spotting fraudulent transactions based on what it has learned
previously.

 Retail–online customer support

Many websites now offer some form of ‘chat’ functionality where you can talk to a customer support
representative or sales representative. In most instances, it is some form of automated AI that begins
these conversations. As these AI chat bots are capable of understanding natural language, i.e. human
conversation, they can readily assist customers in finding out what they need to know, extracting
information from the website, and directing them to the appropriate web page or person for further
support.

 Security
As cyber-attacks increase in frequency and more sophisticated tools are used to breach cyber

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defences, human operators are no longer enough. Top firms across the world are investing heavily in
cyber security to ensure their data is protected. Real-time threat detection, mitigation, and ideally,
prevention, are what’s needed for businesses – and AI can deliver. Using machine
learning algorithms and feeding those algorithms great quantities of data, IT and security experts can
teach the AI solution to monitor behaviour, detect anomalies, adapt and respond to threats and issue
alerts. AI has quickly become a key component in a business’ cyber security infrastructure,
providing a multi-layered security strategy that is robust and sophisticated.

4.5 KNOWLEDGE MANAGEMENT SYSTEM (KMS)

Knowledge management (KM) is the process of creating, sharing, using and managing
the knowledge and information of an organization. It refers to a multidisciplinary approach to
achieve organisational objectives by making the best use of knowledge.
An established discipline since 1991, KM includes courses taught in the fields of business
administration, information systems, management, library, and information sciences. Other fields
may contribute to KM research, including information and media, computer science, public

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health and public policy. Several universities offer dedicated master's degrees in knowledge
management.
Many large companies, public institutions and non-profit organisations have resources dedicated to
internal KM efforts, often as a part of their business strategy, IT, or human resource
management departments. Several consulting companies provide advice regarding KM to these
organizations.
Knowledge management efforts typically focus on organisational objectives such as improved
performance, competitive advantage, innovation, the sharing of lessons learned, integration
and continuous improvement of the organisation. These efforts overlap with organisational
learning and may be distinguished from that by a greater focus on the management of knowledge as
a strategic asset and on encouraging the sharing of knowledge. KM is an enabler of organizational
learning.
Knowledge management (KM) technology can be categorised:

 Groupware—Software that facilitates collaboration and sharing of organisational information.

Such applications provide tools for threaded discussions, document sharing, organisation-wide
uniform email, and other collaboration-related features.
 Workflow systems—Systems that allow the representation of processes associated with the
creation, use and maintenance of organisational knowledge, such as the process to create and
utilise forms and documents.
 Content management and document management systems—Software systems that automate the
process of creating web content and/or documents. Roles such as editors, graphic designers,
writers and producers can be explicitly modelled along with the tasks in the process and
validation criteria. Commercial vendors started either to support documents or to support web
content but as the Internet grew these functions merged and vendors now perform both
functions.
 Enterprise portals—Software that aggregates information across the entire organisation or for
groups such as project teams.
 eLearning—Software that enables organisations to create customised training and education.
This can include lesson plans, monitoring progress and online classes.
 Planning and scheduling software—Software that automates schedule creation and maintenance.
The planning aspect can integrate with project management software.
 Telepresence—Software that enables individuals to have virtual "face-to-face" meetings without
assembling at one location. Videoconferencing is the most obvious example.
 Semantic technology such as ontologies—Systems that encode meaning alongside data to give
machines the ability to extract and infer information.

What is Knowledge?

 Personalized information
 State of knowing and understanding
 An object to be stored and manipulated
 A process of applying expertise
 A condition of access to information

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 Potential to influence action

Sources of Knowledge of an Organization

 Intranet
 Data warehouses and knowledge repositories
 Decision support tools
 Groupware for supporting collaboration
 Networks of knowledge workers
 Internal expertise

Definition of KMS

A knowledge management system comprises a range of practices used in an organization to identify,

create, represent, distribute, and enable adoption to insight and experience. Such insights and
experience comprise knowledge, either embodied in individual or embedded in organizational
processes and practices.

Purpose of KMS

 Improved performance
 Competitive advantage
 Innovation
 Sharing of knowledge
 Integration
 Continuous improvement by −
o Driving strategy
o Starting new lines of business
o Solving problems faster
o Developing professional skills
o Recruit and retain talent

Activities in Knowledge Management

 Start with the business problem and the business value to be delivered first.
 Identify what kind of strategy to pursue to deliver this value and address the KM problem.
 Think about the system required from a people and process point of view.

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 Finally, think about what kind of technical infrastructure are required to support the people
and processes.
 Implement system and processes with appropriate change management and iterative staged
release.

Level of Knowledge
Management

Failure factors of knowledge management systems are as follows:

 Inadequate support: managerial and technical, during both implementation and use.
 Expecting that the technology is a KM solution in itself.
 Failure to understand exactly what the firm needs (whether technologically or otherwise).

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 Not understanding the specific function and limitation of each individual system.
 Lack of organizational acceptance, and assuming that if you build it, they will come – lack of
appropriate organizational culture.
 Inadequate quality measures (e.g. lack of content management).
 Lack of organizational/departmental/etc fit - does it make working in the organization. easier? Is a
system appropriate in one area of the firm but not another? Does it actually disrupt existing
processes?
 Lack of understanding of knowledge dynamics and the inherent difficulty in transferring tacit
knowledge with IT based systems .
 Lack of a separate budget.

Promoting Acceptance and Assimilation

According to Hecht et al. (2011) the process of successful implementation has three stages: adoption,
acceptance, and assimilation. Based on recognized models and theories, the authors identified three
comprehensive sets of factors affecting these three elements. The resulting model organized the
KMS implementation factors into the following categories:
 Adoption:
 Influenced by design: Innovation characteristics, fit, expected results, communication characteristics.
 Not influenced by design: Environment, technological infrastructure, resources, organizational
characteristics.
 Acceptance
 Influenced by design: Effort expectancy, performance expectancy.
 Not influenced by design: Social influences, attitude towards technology use.
 Assimilation:
 Influenced by design: social system characteristics, process characteristics.
 Not influenced by design: Management characteristics, institutional characteristics.
Step 1: KMS Adoption
Some of the key factors identified by Hecht et al (2011) are: characteristics, commercial advantage,
cultural values, information quality, organizational viability, and system quality. To promote KMS
adoption:
 Start with an internal analysis of the firm.
 Evaluate information/knowledge needs & flows, lines of communication, communities of practice,
etc. These findings should form the basis of determining the systems needed to complement them.

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 Make a thorough cost-benefit analysis, considering factors like size of firm, number of users,
complexity of the system structure, frequency of use, upkeep & updating costs, security issues,
training costs (including ensuring acceptance) etc. vs improvements in performance, lower response
time, lower costs (relative to the previous systems) etc.
 Evaluate existing work practices and determine how the systems will improve - and not hinder - the
status quo.
 One very interesting rule of thumb presented by Botha et al (2008), is that "the more tacit the
knowledge, the less high-tech the required solution". For example, expert knowledge is often best
supported by multimedia communication technology and by expert finders. Beyond that, it is about
human interaction and collaboration.

Step 2: KMS acceptance

Some of the factors outlined by Hecht et al. (2011) include: anxiety, ease of use, intrinsic motivation,
job-fit, results demonstrability, and social factors. Promoting acceptance can be improved by:
 Involve the users in the design and implementation process when possible (Liebowitz 1999).
 Involve the user in the evaluation of the system when applicable (Liebowitz 1999).
 Make it as user friendly and as intuitive as possible (Frank 2002).
 Support multiple perspectives of the stored knowledge (Frank 2002).
 Provide adequate technical and managerial support.
 Use product champions to promote the new systems throughout the organization.
Step 3: KMS Assimilation
Some of the factors identified by Hecht et al. (2011) include: knowledge barrier, management
championship, process cost, process quality, and promotion of collaboration. Assimilation can be
improved by:
 Content management (Gamble & Blackwell, 2001): In order for the system to remain useful, its
content must be kept relevant through updating, revising, filtering, organization, etc.
 Perceived attractiveness factors (Gamble & Blackwell, 2001): This includes not only the advantages
of using the KMS, but also of management's ability to convince users of these advantages.
 Proper budgeting: i.e. planning expenses and implementing a KMS that is cost efficient.
 Focus on collaboration. In particular, consider the adoption of enterprise 2.0 / KM 2.0 systems,
which by design promote collaboration while generally being inexpensive and often quite popular.
 Management involvement: The system must be championed by management at all levels.
Essential features of a knowledge management software

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When you think of a knowledge management system, you might be thinking of the tired, old file
systems of the 90s. But that’s definitely no longer your only option. Modern knowledge management
systems like Freshdesk are built for ease of use for global teams. They offer functionality to make it
easy to customize the look and feel of your knowledge base, and to improve your content over time.
Let’s take a closer look at some of the features of a knowledge management system:

Rich text editing and multimedia

Knowledge is more than just words. In order to get your point across, it’s almost always helpful to
include screenshots, videos, and rich text - like bold and italics for emphasis.
Knowledge management software should offer easy to use rich text editing and file management that
doesn’t make you want to pull your hair out. For example, is it easy to import images and resize
them? What kind of tools can you embed to display video or code snippets in your articles?

Language controls
If you operate globally, or in multiple regions, you’ll likely need to offer multiple languages on your
help center. A knowledge management system supports multilingual articles and helps manage a
translation workflow.
Tagging articles with the right language will make sure that every visitor feels like you speak their
language.

Reporting and analytics

In order to truly manage knowledge, you need to be able to measure the quality and the effectiveness
of your efforts. This is why reporting and analytics are such a key feature of any knowledge
management system.
Look for a system that offers robust reporting on documentation including:

 Number of Views per Article

 Search results
 Feedback from visitors
 Integration with Google Analytics for more advanced reporting

Being able to report on how many people are visiting your knowledge base weekly and monthly, and
whether they are finding what they need will help you identify priorities for improvement. Detailed
analytics can also help you show a return on investment for any knowledge projects based on tickets
deflected.

Feedback collection
Just because an article has many visitors doesn’t mean it’s particularly effective at resolving their
issue. Collecting user feedback on your knowledge base is an easy way to tell whether your articles
are helpful and providing the answers customers are looking for.

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For example, Freshdesk articles offer an option for readers to vote Yes or No to “Did you find it
helpful?” at the bottom of each article. If they select No, they are given an option to leave free-form
feedback about what could be improved.
For documentarians, this information is extremely valuable for focussing their work. If many
customers report that an article is not helpful, it’s almost certainly time for an update.

Permission control
Especially if you’re just starting out, everyone on your team might be involved in writing and
contributing to your knowledge base. But that doesn’t mean that everyone needs the ability to
publish or update public articles. Having an editorial process means that you won’t have poorly
worded articles or misinformation slipping into public view.
Look for a knowledge management system that offers fine-tuned permission controls to allow agents
to draft articles and lend a hand, but restricts publishing permission only to the people that you trust
for final review.

Viewership Control
Not every piece of organizational knowledge should be fully available to the public. There’s a ton of
different reasons why you might want to restrict certain articles from certain types of viewers:

 Different plan types have different features

 Managers might have separate internal process articles than agents
 Logged in users might be able to see more than anonymous viewers

With a knowledge management system, you have full control over who can see each article, section
or category of articles.

Customization
Keeping the same branding across all of your online assets (like your website, product and help
center) helps build trust with your users because they can recognize who they are dealing with.
Being able to customize your knowledge management system to look exactly as unique as your
company makes your valuable documentation shine.
A modern KMS will let you incorporate your branding, logos, and colour scheme to customize
exactly what your customers see when they navigate to your support portal.

4.6 Electronic customer relationship management (E-CRM)

Electronic customer relationship management (E-CRM) is the application of Internet-based

technologies such as emails, websites, chat rooms, forums and other channels to
achieve CRM objectives. It is a well-structured and coordinated process of CRM that automates the
processes in marketing, sales and customer service.

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The eCRM or electronic customer relationship management coined by Oscar Gomes

encompasses all standard CRM functions with the use of the net environment i.e., intranet, extranet
and internet. Electronic CRM concerns all forms of managing relationships with customers through
the use of information technology (IT).
eCRM processes include data collection, data aggregation, and customer interaction. Compared to
traditional CRM, the integrated information for eCRM intraorganizational collaboration can be more
efficient to communicate with customers.
Major differences between CRM and eCRM:
Customer contacts

 CRM – Contact with customer made through the retail store, phone, and fax.
 eCRM – All of the traditional methods are used in addition to Internet, email, wireless, and PDA
technologies.

System interface

 CRM – Implements the use of ERP systems, emphasis is on the back-end.

 eCRM – Geared more toward front end, which interacts with the back-end through use of ERP
systems, data warehouses, and data marts.
System overhead (client computers)

 CRM – The client must download various applications to view the web-enabled applications.
They would have to be rewritten for different platform.
 eCRM – Does not have these requirements because the client uses the browser.
Customization and personalization of information

 CRM – Views differ based on the audience, and personalized views are not available. Individual
personalization requires program changes.
 eCRM – Personalized individual views based on purchase history and preferences. Individual
has ability to customize view.
System focus

 CRM – System (created for internal use) designed based on job function and products. Web
applications designed for a single department or business unit.
 eCRM – System (created for external use) designed based on customer needs. Web application
designed for enterprise-wide use.
System maintenance and modification

 CRM – More time involved in implementation and maintenance is more expensive because the
system exists at different locations and on various servers.

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 eCRM – Reduction in time and cost. Implementation and maintenance can take place at one
location and on one server.
As the Internet is becoming more and more important in business life, many companies consider it
as an opportunity to reduce customer-service costs, tighten customer relationships and most
important, further personalize marketing messages and enable mass customization. ECRM is being
adopted by companies because it increases customer loyalty and customer retention by improving
customer satisfaction, one of the objectives of eCRM. E-loyalty results in long-term profits for
online retailers because they incur less costs of recruiting new customers, plus they have an increase
in customer retention. Together with the creation of sales force automation (SFA), where electronic
methods were used to gather data and analyze customer information, the trend of the upcoming
Internet can be seen as the foundation of what we know as eCRM today.
As we implement eCRM process, there are three steps life cycle:

1. Data collection: About customers preference information for actively (answer knowledge)
and passively (surfing record) ways via website, email, questionnaire.
2. Data aggregation: Filter and analysis for firm's specific needs to fulfil their customers.
3. Customer interaction: According to customer's need, company provide the proper feedback
to them.
eCRM can be defined as activities to manage customer relationships by using the Internet, web
browsers or other electronic touch points. The challenge hereby is to
offer communication and information on the right topic, in the right amount, and at the right time
that fits the customer's specific needs.
Strategy components
When enterprises integrate their customer information, there are three eCRM strategy components:

1. Operational: Because of sharing information, the processes in business should make

customer's need as first and seamlessly implement. This avoids multiple times to bother
customers and redundant process.
2. Analytical: Analysis helps company maintain a long-term relationship with customers.
3. Collaborative: Due to improved communication technology, different departments in
company implement (intraorganizational) or work with business partners
(interorganizational) more efficiently by sharing information.

Steps to eCRM Success

Many factors play a part in ensuring that the implementation any level of eCRM is successful. One
obvious way it could be measured is by the ability for the system to add value to the existing
business. There are four suggested implementation steps that affect the viability of a project like this:

1. Developing customer-centric strategies

2. Redesigning workflow management systems
3. Re-engineering work processes
4. Supporting with the right technologies

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One subset of Electronic CRM is Mobile CRM (mCRM). This is defined as "services that aim at
nurturing customer relationships, acquiring or maintaining customers, support marketing, sales or
services processes, and use wireless networks as the medium of delivery to the customers. However,
since communications is the central aspect of customer relations activities, many opt for the
following definition of mCRM: "communication, either one-way or interactive, which is related to
sales, marketing and customer service activities conducted through mobile medium for the purpose
of building and maintaining customer relationships between a company and its customer(s).
eCRM allows customers to access company services from more and more places, since
the Internet access points are increasing by the day. mCRM however, takes this one step further and
allows customers or managers to access the systems for instance from a mobile phone or PDA with
internet access, resulting in high flexibility.
Since mCRM is not able to provide a complete range of customer relationship activities it should be
integrated in the complete CRM system.
There are three main reasons that mobile CRM is becoming so popular. The first is that the devices
consumer use are improving in multiple ways that allow for this advancement. Displays are larger
and clearer and access times on networks are improving overall. Secondly, the users are also
becoming more sophisticated. The technology to them is nothing new so it is easy to adapt. Lastly,
the software being developed for these applications has become worthwhile and useful to end users.
There are four basic steps that a company should follow to implement a mobile CRM system. By
following these and also keeping the IT department, the end users and management in agreement,
the outcome can be beneficial for all.
Step 1 – Needs analysis phase: This is the point to take your times and understand all the technical
needs and desires for each of the users and stakeholders. It also has to be kept in mind that the
mobile CRM system must be able to grow and change with the business.
Step 2 – Mobile design phase: This is the next critical phase that will show all the technical concerns
that need to be addressed. A few main things to consider are screen size, device storage and security.
Step 3 – Mobile application testing phase: This step is mostly to ensure that the users and
stakeholders all approve of the new system.
Step 4 – Rollout phase: This is when the new system is implemented but also when training on the
final product is done with all users.
Advantages of mobile CRM

1. The mobile channel creates a more personal direct connection with customers.
2. It is continuously active and allows necessary individuals to take action quickly using
the information.
3. Typically, it is an opt-in only channel which allows for high and quality responsiveness.
4. Overall, it supports loyalty between the customer and company, which improves and
strengthens relationships.

Failures
Designing, creating and implementing IT projects has always been risky. Not only because of the
amount of money that is involved, but also because of the high chances of failure. However, a

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positive trend can be seen, indicating that CRM failures dropped from a failure rate of 80% in 1998,
to about 40% in 2003.Some of the major issues relating to CRM failure are the following:

 Difficulty in measuring and valuing intangible benefits.

 Failure to identify and focus on specific business problems.
 Lack of active senior management sponsorship.
 Poor user acceptance.
 Trying to automate a poorly defined process.

eCRM consists of three strategic components 1) operational, 2) analytical, and 3) collaborative.

Each of these components is discussed in detail in the following subsections. eCRM strategy affects
information flow and work processes between different departments of the firm.

Components of Customer Relationship Management

Sales Force Automation

Sales Force Automation is the most essential components of customer relationship management.
This is one such component that is undertaken by the maximum business organizations. It includes
forecasting, recording sales processing as well as keeping a track of the potential interactions.

It helps to know the revenue generation opportunities better and that makes it very significant. The
component also includes analyzing the sales forecasts and the performances by the workforce. To
achieve an overall improvement in the development and growth of the industry, numerous
components work hand in hand to form sales force automation as a consequent unit. Some of the
major elements of the same are Lead Management, Account Management, Opportunity
Management, Forecasting, Pipeline Analysis, Contact Management, Activity Management, Email
Management and Reporting.

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Human Resource Management

Human Resource Management involves the effective and correct use of human resource and skills at
the specific moment and situation. This requires to be made sure that the skills and intellectual levels
of the professionals match the tasks undertaken by them according to their job profiles. It is an
essential component not only for the large-scale corporations but the medium industries as well. It
involves adopting an effective people strategy and studying the skills or the workforce and the
growth being generated thereby designing and implementing the strategies needed accordingly with
the aim of achieving development.

Lead Management

Lead Management as the name suggests, refers to keeping the track of the sales leads as well as their
distribution. The business that are benefitted by this component of CRM the most are the sales
industries, marketing firms and customer executive centres. It involves an efficient management of
the campaigns, designing customized forms, finalizing the mailing lists and several other elements.
An extensive study of the purchase patterns of the customers as well as potential sales leads helps to
capture the maximum number of sales leads to improve the sales.

Customer Service

Customer Relationship Management emphasizes on collecting customer information and data, their
purchase information’s and patterns as well as involves providing the collected information to the
necessary and concerned departments. This makes customer service an essential component of
CRM.

Almost all the major departments including the sales department, marketing team and the
management personnel are required to take steps to develop their awareness and understanding of

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the customer needs as well as complaints. This undoubtedly makes the business or the company to
deliver quick and perfect solutions and assistance to the customers as well as cater to their needs
which increases the dependability and trust of the customers and people on the organization.

Marketing

Marketing is one of the most significant component of Customer Relationship Management and it
refers to the promotional activities that are adopted by a company in order to promote their products.
The marketing could be targeted to a particular group of people as well as to the general crowd.
Marketing involves crafting and implementing strategies in order to sell the product. Customer
Relationship Management assists in the marketing process by enhancing and improving the
effectiveness of the strategies used for marketing and promotion.

This is done by making an observation and study of the potential customers. It is a component that
brings along various sub-elements or aspects. Some of the major elements of marketing are List
Management, Campaign Management, Activity Management, Document Management, Call
Management, Mass Emails and Reporting. The use of the aforesaid elements varies from business to
business according to its nature and requirements as well as the target crowd.

Workflow Automation

A number of processes run simultaneously when it comes to the management and this requires an
efficient cost cutting as well as the streamlining of all the processes. The phenomenon of doing so is
known as Workflow Automation. It not only reduces the excess expenditure but also prevents the
repetition of a particular task by different people by reducing the work and work force that is getting
wasted for avoidable jobs. Routing out the paperwork and form filling are some of the elements of
the process and it aims at preventing the loss of time and excess effort.

Business Reporting

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CRM comes with a management of sales, customer care reports and marketing. The customer care
reports assist the executives of a company to gain an insight into their daily work management and
operations. This enables one to know the precise position of the company at any particular instance.
CRM provides the reports on the business and that makes it play a major role here. It is ensured that
the reports are accurate as well as precise. Another significant feature is the forecasting and the
ability to export the business reports on other systems. In order to make comparisons, one can save
historical data as well.

Analytics

Analytics is the process of studying and representing the data in order to observe the trends in the
market. Creating graphical representations of the data in the form of histograms, charts, figures and
diagrams utilizing the current data as well as the one generated in the past is essential to achieve a
detailed understanding and study of the trends. Analytics is an extremely significant element of
Customer Relationship Management as it allows to make in-depth study of information that is
required to calculate the progress in the business.

Different components of Customer Relationship Management are associated with different elements
mainly, the customer acquisition, improved customer value and customer retention. Various
marketing applications are carved out to acquire more customers whereas data warehousing and
analytical tools help the business to hold customers with a better communication and relationship. In
order to enhance the customer value among the existing and future customers, there is a number of
data warehousing and analytical tools.

Overall, each of the discussed components of Customer Relationship Management is very essential
to improve the work structure as well as the market response to the business and their products.

Direct benefits of an E-CRM system include:

i. Service level improvements:
Using an integrated database to deliver consistent and improved customer responses

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ii. Revenue growth:

Decreasing costs by focusing on retaining customers and using interactive service tools to sell
additional products

iii. Productivity:
Consistent sales and service procedures to create efficient work processes

iv. Customer satisfaction:

Automatic customer tracking and detection will ensure enquiries are met and issues are managed.
This will improve the customer’s overall experience in dealing with the organisation.

v. Automation:
E-CRM software helps automate campaigns including:
(i) Telemarketing

(ii) Telesales

(iii) Direct mail

(iv) Lead tracking and response

(v) Opportunity management

(vi) Quotes and order configuration

Across every sector and industry, effective CRM is a strategic imperative for corporate growth
and survival:
a. Sales organisations can shorten the sales cycle and increase key sales-performance metrics such as
revenue per sales representative, average order size and revenue per customer.

b. Marketing organisations can increase campaign response rates and marketing driven revenue
while simultaneously decreasing lead generation and customer acquisition costs.

c. Customer service organisations can increase service agent productivity and customer retention
while decreasing service costs, response times and request-resolution times.

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Working of E-CRM:
In today’s world, customers interact with an organisation via multiple communication channels—the
World Wide Web, call centres, field salespeople, dealers and partner networks. Many organisations
also have multiple lines of business that interact with the same customers.

E-CRM systems enable customers to do business with the organisation the way the customer wants
– any time, via any channel, in any language or currency—and to make customers feel that they are
dealing with a single, unified organisation that recognises them every step of the way.

The E-CRM system does this by creating a central repository for customer records and providing a
portal on each employee’s computer system allowing access to customer information by any
member of the organisation at any time. Through this system, E-CRM gives you the ability to know
more about customers, products and performance results using real time information across your
business.

Implementation of an E-CRM System:

When approaching the development and implementation of E-CRM there are important
considerations to keep in mind:
i. Define customer relationships:
Generate a list of key aspects of your customer relationships and the importance of these
relationships to your business.

ii. Develop a plan:

Create a broad Relationship Management program that can be customized to smaller customer
segments. A suitable software solution will help deliver this goal.

iii. Focus on customers:

The focus should be on the customer, not the technology. Any technology should have specific
benefits in making customers’ lives easier by improving support, lowering their administrative costs,
or giving them reasons to shift more business to your company.

iv. Save money:

Focus on aspects of your business that can contribute to the bottom line. Whether it is through
cutting costs or increasing revenue, every capability you implement should have a direct measurable
impact on the bottom line.

v. Service and support:

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By tracking and measuring the dimensions of the relationship, organisations can identify their
strengths and weaknesses in the relationship management program and continually fine tune it based
on ongoing feedback from customers.

Customer relationship management plays an integral part in a typical company's marketing

system. CRM is a process of gathering and analyzing customer data, building precise marketi ng
campaigns and managing relationships for optimized retention. These activities are performed
over the three phases of customer acquisition, retention and extension or expansion.

Customer Acquisition

Acquiring customers has always been the first important step in establishing business
relationships. With CRM, advanced software databases are used to capture key customer
data at the point of first contact. Profile data includes a prospect's name, address, phone number,
email address and sometimes social media accounts. Entering this data into a computer enables
future and ongoing communication access.

The other major benefit of starting a formal relationship with new prospects and clients is the
ability to track their behaviours through data analysis. As of 2015, many databases enable
analytics, the automated analysis of data through programmed tools. Salespeople can identify at
any point in time, for instance, what percentage of customers are at each stage of the opportunity
pipeline, or sales process. This knowledge allows for optimized targeting to avoid bottlenecks
and to facilitate relationship-building activities.

Customer Retention

The real purpose of gathering data on acquired customers is to improve retention rates. The typical
customer attrition rate for companies is around 15 to 20 percent per year, but a 2013 Forbes article
indicates that some industries experience significantly higher average rates. Effective data
analysis, regular and systematic follow-up communication with contacts, and well-serviced
accounts help you reduce your company's churn rate. Data analysis allows you to identify the
traits of prospects and customers that offer the best lifetime earning potential as well, which
enables greater focus on retaining core customers.

Customer Extension

The customer extension phase of CRM includes activities intended to draw out the length of
typical customer relationships, enabling greater revenue. A simple perspective is that satisfying a
customer during one buying experience increases the likelihood of a follow-up visit. Over time,
delivering quality solutions, following through on commitments and addressing problems convert
a buyer into a loyal customer. You also can enhance revenue through add-on product selling and
cross-selling, which involves recommending unrelated solutions. Because of the high costs of
customer acquisition, extending relationships with customers already captured is hugely
valuable for a business.

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Terminal Questions

Section A

1. Define knowledge.
2. Mention different types of knowledge
3. What do you mean by knowledge management?
4. Which are the key elements of KM?
5. Define an enterprise.
6. Give the meaning of Enterprise Resource Planning.
7. Define Supply Chain.
8. What does ERP include?
9. Define Business Process Reengineering.
10. What is an Expert system?
11. Define Intelligent Agent.
12. What do you mean by Generic Algorithm?
13. Define CRM.
14. What do you mean by Robotics?
15. What are the applications of Robotics?
16. What is E-CRM?

Section B
1. Explain different types of knowledge.
2. What are the benefits and problems of KM?
3. What do you mean by organizational planning? Explain the components of it.

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4. Which are the various elements of ERP?

5. What are the Major benefits of ERP system?
6. Explain the strategic alignment of BPR and IT.
7. Define an expert system. What are its components?
8. Compare and contrast enterprise system with traditional system.
9. What are the elements to be considered while evaluating ERP software?
10. Write a brief note on AI and its applications.

Section C

1. Compare and contrast different types of knowledge? Discuss the benefits and challenges of
KM.
2. The future of the world is knowledge management era rather than information management.
Substantiate your views.
3. ERP is adding value to customer and bringing down cost. Elaborate the statement with your
views.
4. Explain the principles of BPR and role of IT. Explain 3Cs.
5. Explain why expert systems are preferred in many fields? What are the structure of an expert
system?
6. Compare and contrast Expert system with DSS.
7. Do you foresee the day when robots will totally replace human labour? Justify your answer
with examples.

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Module 5: LATEST TRENDS IN MIS

Objectives :

 Identify the current trends in the fields of business

 Recognise the need for updation of techniques and technology for the survival.
 Acquire the knowledge about tools and techniques in decision making process.

5.1 INTRODUCTION

Management information systems (MIS) are complex decision support systems used by
companies to enhance and improve their business operations. Historically, an MIS was a
management tool to help company management make informed decisions for their business based
on information gathered from all business departments. Technology has greatly improved the
effectiveness of the MIS.

Enterprise resource planning (ERP) software is a form of MIS that is installed in all departments
and locations of businesses to enhance the availability of company information. With the
globalization of the economic marketplace, companies have sought ways to improve their ability
to collect and report financial information to management for effective decision making. ERPs fill
this void by allowing companies to use one computer system to effectively record all company
information.

Another trend in MIS is the ability for companies to network with other companies for business
purposes. Manufacturing firms can shorten their supply chain using electronic data interchange
(EDI) to transfer the necessary information for ordering more products. Networking also allows

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companies to transfer money through several bank accounts, creating a quicker process for paying
bills and purchasing materials. An MIS ensures that management has all the pertinent information
for these business operations, allowing them to review the effectiveness of their operations.

Data Mining, a Powerful Tool

An important trend in MIS is the ability for companies to use data mining tools to collect
information regarding consumer purchases and other economic trends. This allows management to
translate this information into goals and directions for future business operations. Most MIS
software also has trending or forecasting models that allow companies to project emerging
consumer markets for profitable operations. Companies can use their internal figures in the MIS to
measure the effectiveness of their external data mining techniques.

Educational Programs

As MIS software becomes more prevalent in businesses, many colleges and universities have
developed educational programs to train students on these programs. Most degrees are four-year
baccalaureate programs that combine general business courses with a mix of computer
programming and management classes. This helps students to develop a well-rounded education in
the development and implantation of MIS software. Advanced degrees are also offered.

Careers in Database Management and Consulting

Computerized MIS programs have led to a new career in database management and consulting.
According to the U.S. Bureau of Labor Statistics (BLS), employment of computer and information
technology occupations is projected to grow 13 percent from 2016 to 2026, faster than the average
for all occupations.

5.2 E-Business

Online Business or e-business is any kind of business or commercial transaction that includes
sharing information across the internet. Commerce constitutes the exchange of products and services
between businesses, groups and individuals and can be seen as one of the essential activities of any
business. Electronic commerce focuses on the use of ICT to enable the external activities and
relationships of the business with individuals, groups and other businesses, while e-business refers to
business with help of the internet. The term "e-business" was coined by IBM's marketing and
Internet team in 1996.

Business model

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When organizations go online, they have to decide which e-business models best suit their
goals. A business model is defined as the organization of product, service and information flows, and
the source of revenues and benefits for suppliers and customers. The concept of e-business model is
the same but used in the online presence.

Revenue model

A key component of the business model is the revenue model or profit model, which is a framework
for generating revenues. It identifies which revenue source to pursue, what value to offer, how to
price the value, and who pays for the value. It is a key component of a company's business model. It
primarily identifies what product or service will be created in order to generate revenues and the
ways in which the product or service will be sold.

Without a well-defined revenue model, that is, a clear plan of how to generate revenues, new
businesses will more likely struggle due to costs which they will not be able to sustain. By having a
revenue model, a business can focus on a target audience, fund development plans for a product or
service, establish marketing plans, begin a line of credit and raise capital.

5.2.1 E-commerce
E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the
need of business organizations, vendors and customers to reduce cost and improve the quality of
goods and services while increasing the speed of delivery. Ecommerce refers to the paperless
exchange of business information using the following ways −

 Electronic Data Interchange (EDI)

 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies

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Features

E-Commerce provides the following features −

 Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website, and other modes of electronics payment.
 24x7 Service availability − E-commerce automates the business of enterprises and the way
they provide services to their customers. It is available anytime, anywhere.
 Advertising / Marketing − E-commerce increases the reach of advertising of products and
services of businesses. It helps in better marketing management of products/services.
 Improved Sales − Using e-commerce, orders for the products can be generated anytime,
anywhere without any human intervention. It gives a big boost to existing sales volumes.
 Support − E-commerce provides various ways to provide pre-sales and post-sales assistance
to provide better services to customers.
 Inventory Management − E-commerce automates inventory management. Reports get
generated instantly when required. Product inventory management becomes very efficient
and easy to maintain.
 Communication improvement − E-commerce provides ways for faster, efficient, reliable
communication with customers and partners.

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Traditional Commerce v/s E-Commerce

Sr. Traditional Commerce E-Commerce

No.

1 Heavy dependency on information Information sharing is made easy via electronic

exchange from person to person. communication channels making little
dependency on person to person information
exchange.

2 Communication/ transaction are done in Communication or transaction can be done in

synchronous way. Manual intervention asynchronous way. Electronics system
is required for each communication or automatically handles when to pass
transaction. communication to required person or do the
transactions.

3 It is difficult to establish and maintain A uniform strategy can be easily established and
standard practices in traditional maintain in e-commerce.
commerce.

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4 Communications of business depends In e-Commerce or Electronic Market, there is no

upon individual skills. human intervention.

5 Unavailability of a uniform platform as E-Commerce website provides user a platform

traditional commerce depends heavily where al l information is available at one place.
on personal communication.

6 No uniform platform for information E-Commerce provides a universal platform to

sharing as it depends heavily on personal support commercial / business activities across
communication. the globe.

E-Commerce - Advantages
E-Commerce advantages can be broadly classified in three major categories −

 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society

Advantages to Organizations

 Using e-commerce, organizations can expand their market to national and international
markets with minimum capital investment. An organization can easily locate more
customers, best suppliers, and suitable business partners across the globe.
 E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and
manage the paper-based information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organization to provide better customer services.
 E-commerce helps to simplify the business processes and makes them faster and efficient.
 E-commerce reduces the paper work.
 E-commerce increases the productivity of organizations. It supports "pull" type supply
management. In "pull" type supply management, a business process starts when a request
comes from a customer and it uses just-in-time manufacturing way.

Advantages to Customers

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 It provides 24x7 support. Customers can enquire about a product or service and place orders
anytime, anywhere from any location.
 E-commerce application provides users with more options and quicker delivery of products.
 E-commerce application provides users with more options to compare and select the cheaper
and better options.
 A customer can put review comments about a product and can see what others are buying, or
see the review comments of other customers before making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the relevant detailed
information within seconds, rather than waiting for days or weeks.
 E-Commerce increases the competition among organizations and as a result, organizations
provides substantial discounts to customers.

Advantages to Society

 Customers need not travel to shop a product, thus less traffic on road and low air pollution.
 E-commerce helps in reducing the cost of products, so less affluent people can also afford
the products.
 E-commerce has enabled rural areas to access services and products, which are otherwise not
available to them.
 E-commerce helps the government to deliver public services such as healthcare, education,
social services at a reduced cost and in an improved manner.

E-Commerce - Disadvantages
The disadvantages of e-commerce can be broadly classified into two major categories −

 Technical disadvantages
 Non-Technical disadvantages

Technical Disadvantages

 There can be lack of system security, reliability or standards owing to poor implementation
of e-commerce.
 The software development industry is still evolving and keeps changing rapidly.
 In many countries, network bandwidth might cause an issue.
 Special types of web servers or other software might be required by the vendor, setting the e-
commerce environment apart from network servers.
 Sometimes, it becomes difficult to integrate an e-commerce software or website with
existing applications or databases.

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 There could be software/hardware compatibility issues, as some e-commerce software may

be incompatible with some operating system or any other component.

Non-Technical Disadvantages

 Initial cost − The cost of creating/building an e-commerce application in-house may be very
high. There could be delays in launching an e-Commerce application due to mistakes, and
lack of experience.
 User resistance − Users may not trust the site being an unknown faceless seller. Such
mistrust makes it difficult to convince traditional users to switch from physical stores to
online/virtual stores.
 Security/ Privacy − It is difficult to ensure the security or privacy on online transactions.
 Lack of touch or feel of products during online shopping is a drawback.
 E-commerce applications are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for many potential customers,
for example, those living in remote villages.

5.2.2 E-COMMERCE MODELS

E-commerce business models can generally be categorized into the following categories.

 Business - to - Business (B2B)

 Business - to - Consumer (B2C)
 Consumer - to - Consumer (C2C)
 Consumer - to - Business (C2B)
 Business - to - Government (B2G)
 Government - to - Business (G2B)
 Government - to - Citizen (G2C)

Business - to - Business

A website following the B2B business model sells its products to an intermediate buyer who then
sells the product to the final customer. As an example, a wholesaler places an order from a
company's website and after receiving the consignment, sells the end product to the final customer
who comes to buy the product at one of its retail outlets.

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Business - to - Consumer

A website following the B2C business model sells its products directly to a customer. A customer
can view the products shown on the website. The customer can choose a product and order the
same. The website will then send a notification to the business organization via email and the
organization will dispatch the product/goods to the customer.

Consumer - to - Consumer

A website following the C2C business model helps consumers to sell their assets like residential
property, cars, motorcycles, etc., or rent a room by publishing their information on the website.
Website may or may not charge the consumer for its services. Another consumer may opt to buy the
product of the first customer by viewing the post/advertisement on the website.

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Consumer - to - Business

In this model, a consumer approaches a website showing multiple business organizations for a
particular service. The consumer places an estimate of amount he/she wants to spend for a
particular service. For example, the comparison of interest rates of personal loan/car loan provided
by various banks via websites. A business organization who fulfills the consumer's requirement
within the specified budget, approaches the customer and provides its services.

Business - to - Government

B2G model is a variant of B2B model. Such websites are used by governments to trade and
exchange information with various business organizations. Such websites are accredited by the
government and provide a medium to businesses to submit application forms to the government.

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Government - to - Business

Governments use B2G model websites to approach business organizations. Such websites support
auctions, tenders, and application submission functionalities.

Government - to - Citizen

Governments use G2C model websites to approach citizen in general. Such websites support
auctions of vehicles, machinery, or any other material. Such website also provides services like
registration for birth, marriage or death certificates. The main objective of G2C websites is to
reduce the average time for fulfilling citizen’s requests for various government services.

5.2.4 E-PAYAMENT SYSTEMS

E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by reducing the
paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than
manual processing, it helps business organization to expand its market reach/expansion. Listed
below are some of the modes of electronic payments −

 Credit Card
 Debit Card
 Smart Card
 E-Money
 Electronic Fund Transfer (EFT)

Credit Card

Payment using credit card is one of most common mode of electronic payment. Credit card is small
plastic card with a unique number attached with an account. It has also a magnetic strip embedded
in it which is used to read credit card via card readers. When a customer purchases a product via

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credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time
period after which he/she can pay the credit card bill. It is usually credit card monthly payment
cycle. Following are the actors in the credit card system.

 The card holder − Customer

 The merchant − seller of product who can accept credit card payments.
 The card issuer bank − card holder's bank
 The acquirer bank − the merchant's bank
 The card brand − for example, visa or MasterCard.

Credit Card Payment Process

Step Description

Step 1 Bank issues and activates a credit card to the customer on his/her request.

Step 2 The customer presents the credit card information to the merchant site or to the
merchant from whom he/she wants to purchase a product/service.

Step 3 Merchant validates the customer's identity by asking for approval from the card
brand company.

Step 4 Card brand company authenticates the credit card and pays the transaction by
credit. Merchant keeps the sales slip.

Step 5 Merchant submits the sales slip to acquirer banks and gets the service charges paid
to him/her.

Step 6 Acquirer bank requests the card brand company to clear the credit amount and gets
the payment.

Step 6 Now the card brand company asks to clear the amount from the issuer bank and the
amount gets transferred to the card brand company.

Debit Card

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Debit card, like credit card, is a small plastic card with a unique number mapped with the bank
account number. It is required to have a bank account before getting a debit card from the bank. The
major difference between a debit card and a credit card is that in case of payment through debit
card, the amount gets deducted from the card's bank account immediately and there should be
sufficient balance in the bank account for the transaction to get completed; whereas in case of a
credit card transaction, there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card
readily. Having a restriction on the amount that can be withdrawn in a day using a debit card helps
the customer to keep a check on his/her spending.

Smart Card

Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or
personal information. Smart cards are also used to store money and the amount gets deducted after
every transaction.
Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards are
secure, as they store information in encrypted format and are less expensive/provides faster
processing. Mondex and Visa Cash cards are examples of smart cards.

E-Money

E-Money transactions refer to situation where payment is done over the network and the amount
gets transferred from one financial body to another financial body without any involvement of a
middleman. E-money transactions are faster, convenient, and saves a lot of time.
Online payments done via credit cards, debit cards, or smart cards are examples of e-money
transactions. Another popular example is e-cash. In case of e-cash, both customer and merchant
have to sign up with the bank or company issuing e-cash.

Electronic Fund Transfer

It is a very popular electronic payment method to transfer money from one bank account to another
bank account. Accounts can be in the same bank or different banks. Fund transfer can be done using
ATM (Automated Teller Machine) or using a computer.
Nowadays, internet-based EFT is getting popular. In this case, a customer uses the website provided
by the bank, logs in to the bank's website and registers another bank account. He/she then places a
request to transfer certain amount to that account. Customer's bank transfers the amount to other
account if it is in the same bank, otherwise the transfer request is forwarded to an ACH (Automated
Clearing House) to transfer the amount to other account and the amount is deducted from the
customer's account. Once the amount is transferred to other account, the customer is notified of the
fund transfer by the bank.

5.2.5 Safety and security of E-commerce

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Security is an essential part of any transaction that takes place over the internet. Customers will lose
his/her faith in e-business if its security is compromised. Following are the essential requirements
for safe e-payments/transactions −
 Confidentiality − Information should not be accessible to an unauthorized person. It should
not be intercepted during the transmission.
 Integrity − Information should not be altered during its transmission over the network.
 Availability − Information should be available wherever and whenever required within a
time limit specified.
 Authenticity − There should be a mechanism to authenticate a user before giving him/her an
access to the required information.
 Non-Repudiability − It is the protection against the denial of order or denial of payment.
Once a sender sends a message, the sender should not be able to deny sending the message.
Similarly, the recipient of message should not be able to deny the receipt.
 Encryption − Information should be encrypted and decrypted only by an authorized user.
 Auditability − Data should be recorded in such a way that it can be audited for integrity
requirements.

Measures to ensure Security

Major security measures are following −

 Encryption − It is a very effective and practical way to safeguard the data being transmitted
over the network. Sender of the information encrypts the data using a secret code and only
the specified receiver can decrypt the data using the same or a different secret code.
 Digital Signature − Digital signature ensures the authenticity of the information. A digital
signature is an e-signature authenticated through encryption and password.
 Security Certificates − Security certificate is a unique digital id used to verify the identity
of an individual website or user.

Security Protocols in Internet

We will discuss here some of the popular protocols used over the internet to ensure secured online
transactions.

Secure Socket Layer (SSL)

It is the most commonly used protocol and is widely used across the industry. It meets following
security requirements −

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 Authentication
 Encryption
 Integrity
 Non-reputability
"https://" is to be used for HTTP URLs with SSL, where as "http:/" is to be used for HTTP URLs
without SSL.

Secure Hypertext Transfer Protocol (SHTTP)

SHTTP extends the HTTP internet protocol with public key encryption, authentication, and digital
signature over the internet. Secure HTTP supports multiple security mechanism, providing security
to the end-users. SHTTP works by negotiating encryption scheme types used between the client and
the server.

Secure Electronic Transaction

It is a secure protocol developed by MasterCard and Visa in collaboration. Theoretically, it is the

best security protocol. It has the following components −
 Card Holder's Digital Wallet Software − Digital Wallet allows the card holder to make
secure purchases online via point and click interface.
 Merchant Software − This software helps merchants to communicate with potential
customers and financial institutions in a secure manner.
 Payment Gateway Server Software − Payment gateway provides automatic and standard
payment process. It supports the process for merchant's certificate request.
 Certificate Authority Software − This software is used by financial institutions to issue
digital certificates to card holders and merchants, and to enable them to register their
account agreements for secure electronic commerce.
A website following the B2B business model sells its products to an intermediate buyer who then
sells the products to the final customer. As an example, a wholesaler places an order from a
company's website and after receiving the consignment, it sells the end product to the final
customer who comes to buy the product at the wholesaler's retail outlet.

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B2B identifies both the seller as well as the buyer as business entities. B2B covers a large number
of applications, which enables business to form relationships with their distributors, re-sellers,
suppliers, etc. Following are the leading items in B2B eCommerce.

 Electronics
 Shipping and Warehousing
 Motor Vehicles
 Petrochemicals
 Paper
 Office products
 Food
 Agriculture

Key Technologies

Following are the key technologies used in B2B e-commerce −

 Electronic Data Interchange (EDI) − EDI is an inter-organizational exchange of business
documents in a structured and machine processable format.
 Internet − Internet represents the World Wide Web or the network of networks connecting
computers across the world.
 Intranet − Intranet represents a dedicated network of computers within a single
organization.
 Extranet − Extranet represents a network where the outside business partners, suppliers, or
customers can have a limited access to a portion of enterprise intranet/network.

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 Back-End Information System Integration − Back-end information systems are database

management systems used to manage the business data.

Architectural Models

Following are the architectural models in B2B e-commerce −

 Supplier Oriented marketplace − In this type of model, a common marketplace provided
by supplier is used by both individual customers as well as business users. A supplier offers
an e-stores for sales promotion.
 Buyer Oriented marketplace − In this type of model, buyer has his/her own market place
or e-market. He invites suppliers to bid on product's catalogue. A Buyer company opens a
bidding site.
 Intermediary Oriented marketplace − In this type of model, an intermediary company
runs a market place where business buyers and sellers can transact with each other.
In B2C model, a business website is a place where all the transactions take place directly between a
business organization and a consumer.

In the B2C model, a consumer goes to the website, selects a catalogue, orders the catalogue, and an
email is sent to the business organization. After receiving the order, goods are dispatched to the
customer. Following are the key features of the B2C model −

 Heavy advertising required to attract customers.

 High investments in terms of hardware/software.
 Support or good customer care service.

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Consumer Shopping Procedure

Following are the steps used in B2C e-commerce −

A consumer −

 determines the requirement.

 searches available items on the website meeting the requirement.
 compares similar items for price, delivery date or any other terms.
 places the order.
 pays the bill.
 receives the delivered item and review/inspect them.
 consults the vendor to get after service support or returns the product if not satisfied with the
delivered product.

Disintermediation and Re-intermediation

In traditional commerce, there are intermediating agents like wholesalers, distributors, and retailers
between the manufacturer and the consumer. In B2C websites, a manufacturer can sell its products
directly to potential consumers. This process of removal of business layers responsible for
intermediary functions is called disintermediation.

Nowadays, new electronic intermediary breeds such as e-mall and product selection agents are
emerging. This process of shifting of business layers responsible for intermediary functions from
traditional to electronic mediums is called re-intermediation.

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EDI stands for Electronic Data Interchange. EDI is an electronic way of transferring business
documents in an organization internally, between its various departments or externally with
suppliers, customers, or any subsidiaries. In EDI, paper documents are replaced with electronic
documents such as word documents, spreadsheets, etc.

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EDI Documents

Following are the few important documents used in EDI −

 Invoices
 Purchase orders
 Shipping Requests
 Acknowledgement
 Business Correspondence letters
 Financial information letters

Steps in an EDI System

Following are the steps in an EDI System.

 A program generates a file that contains the processed document.
 The document is converted into an agreed standard format.
 The file containing the document is sent electronically on the network.
 The trading partner receives the file.
 An acknowledgement document is generated and sent to the originating organization.

Advantages of an EDI System

Following are the advantages of having an EDI system.

 Reduction in data entry errors. − Chances of errors are much less while using a computer
for data entry.
 Shorter processing life cycle − Orders can be processed as soon as they are entered into the
system. It reduces the processing time of the transfer documents.
 Electronic form of data − It is quite easy to transfer or share the data, as it is present in
electronic format.
 Reduction in paperwork − As a lot of paper documents are replaced with electronic
documents, there is a huge reduction in paperwork.
 Cost Effective − As time is saved and orders are processed very effectively, EDI proves to
be highly cost effective.
 Standard Means of communication − EDI enforces standards on the content of data and its
format which leads to clearer communication.

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Security
E-business systems naturally have greater security risks than traditional business systems, therefore
it is important for e-business systems to be fully protected against these risks. A far greater number
of people have access to e-businesses through the internet than would have access to a traditional
business. Customers, suppliers, employees, and numerous other people use any particular e-business
system daily and expect their confidential information to stay secure. Hackers are one of the great
threats to the security of e-businesses. Some common security concerns for e-Businesses include
keeping business and customer information private and confidential, authenticity of data, and data
integrity. Some of the methods of protecting e-business security and keeping information secure
include physical security measures as well as data storage, data transmission, anti-virus
software, firewalls, and encryption to list a few.
Privacy and confidentiality
Confidentiality is the extent to which businesses makes personal information available to other
businesses and individuals. With any business, confidential information must remain secure and only
be accessible to the intended recipient. However, this becomes even more difficult when dealing
with e-businesses specifically. To keep such information secure means protecting any electronic
records and files from unauthorized access, as well as ensuring safe transmission and data storage of
such information. Tools such as encryption and firewalls manage this specific concern within e-
business.
Data integrity
Data integrity answers the question "Can the information be changed or corrupted in any way?" This
leads to the assurance that the message received is identical to the message sent. A business needs to
be confident that data is not changed in transit, whether deliberately or by accident. To help with
data integrity, firewalls protect stored data against unauthorized access, while simply backing up
data allows recovery should the data or equipment be damaged.
Access control
When certain electronic resources and information is limited to only a few authorized individuals, a
business and its customers must have the assurance that no one else can access the systems or
information. There are a variety of techniques to address this concern including firewalls, access
privileges, user identification and authentication techniques (such as passwords and digital
certificates), Virtual Private Networks (VPN), and much more.
Availability
This concern is specifically pertinent to a business' customers as certain information must be
available when customers need it. Messages must be delivered in a reliable and timely fashion, and
information must be stored and retrieved as required. Because availability of service is important for
all e-business websites, steps must be taken to prevent disruption of service by events such as power
outages and damage to physical infrastructure. Examples to address this include data backup, fire-
suppression systems, Uninterrupted Power Supply (UPS) systems, virus protection, as well as
making sure that there is sufficient capacity to handle the demands posed by heavy network traffic.
Security solutions
When it comes to security solutions, sustainable electronic business requires support for data
integrity, strong authentication, and privacy.

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Access and data integrity

There are several different ways to prevent access to the data that is kept online. One way is to use
anti-virus software. This is something that most people use to protect their networks regardless of the
data they have. E-businesses should use this because they can then be sure that the information sent
and received to their system is clean. A second way to protect the data is to use firewalls and
network protection. A firewall is used to restrict access to private networks, as well as public
networks that a company may use. The firewall also has the ability to log attempts into the network
and provide warnings as it is happening. They are very beneficial to keep third-parties out of the
network. Businesses that use Wi-Fi need to consider different forms of protection because these
networks are easier for someone to access. They should look into protected access, virtual private
networks, or internet protocol security. Another option they have is an intrusion detection system.
This system alerts when there are possible intrusions. Some companies set up traps or "hot spots" to
attract people and are then able to know when someone is trying to hack into that area.
Encryption
Encryption, which is actually a part of cryptography, involves transforming texts or messages into a
code which is unreadable. These messages have to be decrypted in order to be understandable or
usable for someone. There is a key that identifies the data to a certain person or company. With
public key encryption, there are actually two keys used. One is public and one is private. The public
one is used for encryption, and the private for decryption. The level of the actual encryption can be
adjusted and should be based on the information. The key can be just a simple slide of letters or a
completely random mix-up of letters. This is relatively easy to implement because there is software
that a company can purchase. A company needs to be sure that their keys are registered with a
certificate authority.
Digital certificate
The point of a digital certificate is to identify the owner of a document. This way the receiver knows
that it is an authentic document. Companies can use these certificates in several different ways. They
can be used as a replacement for user names and passwords. Each employee can be given these to
access the documents that they need from wherever they are. These certificates also use encryption.
They are a little more complicated than normal encryption however. They actually used important
information within the code. They do this in order to assure authenticity of the documents as well as
confidentiality and data integrity which always accompany encryption. Digital certificates are not
commonly used because they are confusing for people to implement. There can be complications
when using different browsers, which means they need to use multiple certificates. The process is
being adjusted so that it is easier to use.
Digital signatures
A final way to secure information online would be to use a digital signature. If a document has a
digital signature on it, no one else is able to edit the information without being detected. That way if
it is edited, it may be adjusted for reliability after the fact. In order to use a digital signature, one
must use a combination of cryptography and a message digest. A message digest is used to give the
document a unique value. That value is then encrypted with the sender's private key.

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Advantages
When looking at e-Business we have many advantages, which are mostly connected to making doing
business easier. The benefits of implementing e-Business tools are in the streamlining of business
processes and not so much in use of technology. Here are some:

 Easy to set up: electronic business is easy to set up even from home, the only requirements are
software, a device and internet connection.

 Flexible Business Hours: There are no time barriers that a location-based business can encounter
since the internet is available to everyone all the time. Your products and services can be
accessed by everyone with an internet connection.

 Cheaper than Traditional Business: Electronic business is less costly than a traditional business,
but it is more expensive to set up. Transactions cost are also cheaper.

 No Geographical Boundaries: The greatest benefit is the possibility of geographically dispersion.

Anyone can order anything from anywhere at any time.

 Government Subsidies: Digitalisation is very encouraged by the government and they provide
necessary support.

 New market entry: It has a great potential to enable an entry to a previously unknown market
that a traditional business could not.
Disadvantages
Despite all the advantages there are also some disadvantages that we need to address. The most
common limitations of electronic business are:

 Lack of Personal Touch: The products cannot be examined or felt before the final purchase. In
the traditional model, we have a more personal customer experience, while in electronic business
that is mostly not the case. Another missing factor of personal touch could also be in online
transactions.

 Delivery Time: Traditional business enables instant satisfaction as you obtain the product the
moment you purchase it, while in electronic business that is not possible. There will always be a
waiting period before you receive the product. For example, Amazon assures one-day delivery.
This does not resolve the issue completely, but it is an improvement.

 Security Issues: Scams could be mentioned as a factor for people’s distrust in electronic
business. Hackers can easily get customers’ financial and personal details. Some customer still
finds it hard to trust electronic businesses because of the lack of security, reliability and integrity
issues.

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5.3 Digital Marketing

Digital marketing is the component of marketing that utilizes internet and online based digital
technologies such as desktop computers, mobile phones and other digital media and platforms to
promote products and services. Its development during the 1990s and 2000s, changed the way
brands and businesses use technology for marketing. As digital platforms became increasingly
incorporated into marketing plans and everyday life, and as people increasingly use digital devices
instead of visiting physical shops, digital marketing campaigns have become prevalent, employing
combinations of search engine optimization (SEO), search engine marketing (SEM), content
marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-
commerce marketing, social media marketing, social media optimization, e-mail direct
marketing, display advertising, e–books, and optical disks and games have become commonplace.
Digital marketing extends to non-Internet channels that provide digital media, such as television,
mobile phones (SMS and MMS), call back, and on-hold mobile ring tone. The extension to non-
Internet channels differentiates digital marketing from online marketing.

New non-linear marketing approach

Nonlinear marketing, a type of interactive marketing, is a long-term marketing approach which

builds on businesses collecting information about an Internet user's online activities, and trying to be
visible in multiple areas.
Unlike traditional marketing techniques, which involve direct, one-way messaging to consumers (via
print, television and radio advertising), nonlinear digital marketing strategies are centred on reaching
prospective customers across multiple online channels.
Combined with higher consumer knowledge and the demand for more sophisticated consumer
offerings, this change has forced many businesses to rethink their outreach strategy and adopt or
incorporate omni-channel, nonlinear marketing techniques to maintain sufficient brand exposure,
engagement and reach.
Nonlinear marketing strategies involve efforts to adapt the advertising to different platforms, [30] and
to tailor the advertising to different individual buyers rather than a large coherent audience.
Tactics may include

 Search engine optimization (SEO)

 Social media marketing
 Video marketing
 Email marketing
 Blogging
 Website marketing
 Paid search/contextual advertising

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Some studies indicate that consumer responses to traditional marketing approaches are becoming
less predictable for businesses. According to a 2018 study, nearly 90% of online consumers in the
United States researched products and brands online before visiting the store or making a
purchase. The Global Web Index estimated that in 2018, a little more than 50% of consumers
researched products on social media. Businesses often rely on individuals portraying their products
in a positive light on social media, and may adapt their marketing strategy to target people with large
social media followings in order to generate such comments. In this manner, businesses can use
consumers to advertise their products or services, decreasing the cost for the company.

Brand awareness

One of the key objectives of modern digital marketing is to raise brand awareness, the extent to
which customers and the general public are familiar with and recognize a particular brand.
Enhancing brand awareness is important in digital marketing, and marketing in general, because of
its impact on brand perception and consumer decision-making. According to the 2015 essay,
“Impact of Brand on Consumer Behaviour”:
“Brand awareness, as one of the fundamental dimensions of brand equity, is often considered to be a
prerequisite of consumers’ buying decision, as it represents the main factor for including a brand in
the consideration set. Brand awareness can also influence consumers’ perceived risk assessment and
their confidence in the purchase decision, due to familiarity with the brand and its characteristics”
Recent trends show that businesses and digital marketers are prioritizing brand awareness, focusing
more of their digital marketing efforts on cultivating brand recognition and recall than in previous
years. This is evidenced by a 2019 Content Marketing Institute study, which found that 81% of
digital marketers have worked on enhancing brand recognition over the past year.
Another Content Marketing Institute survey revealed 89% of B2B marketers now believe improving
brand awareness to be more important than efforts directed at increasing sales.

 The growth of online shopping. A survey by Statista projects 230.5 million people in the United
States will use the internet to shop, compare and buy products by 2021, up from 209.6 million in
2016
 Research from business software firm Sales force found 87% of people began searches for
products and brands on digital channels in 2018.
 The role of digital interaction in customer behaviour. It’s estimated that 70% all retail purchases
made in the U.S. are influenced to some degree by an interaction with a brand online.
 The growing influence and role of brand awareness in online consumer decision-making: 82% of
online shoppers searching for services give preference to brands they know of.
 The use, convenience and influence of social media. A recent report by Hootsuite estimated
there were more than 3.4 billion active users on social media platforms, a 9% increase from
2018.
 A 2019 survey by The Manifest states that 74% of social media users follow brands on social
sites, and 96% of people who follow businesses also engage with those brands on social
platforms.
 According to Deloitte, one in three U.S. consumers are influenced by social media when buying
a product, while 47% of millennials factor their interaction with a brand on social when making
a purchase.

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Online methods used to build brand awareness

Digital marketing strategies may include the use of one or more online channels and techniques
(omnichannel) to increase brand awareness among consumers.
Building brand awareness may involve such methods/tools as:
Search engine optimization (SEO)
Search engine optimization techniques may be used to improve the visibility of business websites
and brand-related content for common industry-related search queries.
The importance of SEO to increasing brand awareness is said to correlate with the growing influence
of search results and search features like featured snippets, knowledge panels and local SEO on
customer behaviour.
Search engine marketing (SEM)
SEM, also known as PPC advertising, involves the purchase of ad space in prominent, visible
positions atop search results pages and websites. Search ads have been shown to have a positive
impact on brand recognition, awareness and conversions.
33% of searchers who click on paid ads do so because they directly respond to their particular search
query.
Social media marketing
70% of marketers list increasing brand awareness as their number one goal for marketing on social
media platforms. Facebook, Instagram, Twitter and YouTube are listed as the top platforms currently
used by social media marketing teams.
Content marketing
56% of marketers believe personalized content – brand-centred blogs, articles, social updates,
videos, landing pages – improves brand recall and engagement.
According to Mentionlytics, an active and consistent content strategy that incorporates elements of
interactive content creation, social posting and guest blogging can improve brand awareness and
loyalty by 88%.

Developments and strategies

One of the major changes that occurred in traditional marketing was the "emergence of digital
marketing" (PatrutiuBaltes, Loredana, 2015), this led to the reinvention of marketing strategies in
order to adapt to this major change in traditional marketing (PatrutiuBaltes, Loredana, 2015).
As digital marketing is dependent on technology which is ever-evolving and fast-changing, the same
features should be expected from digital marketing developments and strategies. This portion is an
attempt to qualify or segregate the notable highlights existing and being used as of press time.

 Segmentation: More focus has been placed on segmentation within digital marketing, in order
to target specific markets in both business-to-business and business-to-consumer sectors.
 Influencer marketing: Important nodes are identified within related communities, known as
influencers. This is becoming an important concept in digital targeting. Influencers allow brands

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to take advantage of social media and the large audiences available on many of these
platforms. It is possible to reach influencers via paid advertising, such as Facebook Advertising
or Google Ad words campaigns, or through sophisticated S-CRM (social customer relationship
management) software, such as SAP C4C, Microsoft Dynamics, Sage CRM and Sales force
CRM. Many universities now focus, at Masters level, on engagement strategies for influencers.
To summarize, Pull digital marketing is characterized by consumers actively seeking marketing
content while Push digital marketing occurs when marketers send messages without that content
being actively sought by the recipients.

 Online behavioural advertising is the practice of collecting information about a user's online
activity over time, "on a particular device and across different, unrelated websites, in order to
deliver advertisements tailored to that user's interests and preferences. Such Advertisements are
customized as per the user behaviour and pattern.
 Collaborative Environment: A collaborative environment can be set up between the
organization, the technology service provider, and the digital agencies to optimize effort,
resource sharing, reusability and communications. Additionally, organizations are inviting their
customers to help them better understand how to service them. This source of data is called User
Generated Content. Much of this is acquired via company websites where the organization
invites people to share ideas that are then evaluated by other users of the site. The most popular
ideas are evaluated and implemented in some form. Using this method of acquiring data and
developing new products can foster the organizations relationship with their customer as well as
spawn ideas that would otherwise be overlooked. UGC is low-cost advertising as it is directly
from the consumers and can save advertising costs for the organisation.
 Data-driven advertising: Users generate a lot of data in every step they take on the path of
customer journey and brands can now use that data to activate their known audience with data-
driven programmatic media buying. Without exposing customers' privacy, users' data can be
collected from digital channels (e.g.: when customer visits a website, reads an e-mail, or
launches and interact with brand's mobile app), brands can also collect data from real world
customer interactions, such as brick and mortar stores visits and from CRM and sales engines
datasets. Also known as people-based marketing or addressable media, data-driven advertising is
empowering brands to find their loyal customers in their audience and deliver in real time a
much more personal communication, highly relevant to each customers' moment and actions.
An important consideration today while deciding on a strategy is that the digital tools have
democratized the promotional landscape.

 Remarketing: Remarketing plays a major role in digital marketing. This tactic allows marketers
to publish targeted ads in front of an interest category or a defined audience, generally called
searchers in web speak, they have either searched for particular products or services or visited a
website for some purpose.
 Game advertising: Game ads are advertisements that exist within computer or video games.
One of the most common examples of in-game advertising is billboards appearing in sports
games. In-game ads also might appear as brand-name products like guns, cars, or clothing that
exist as gaming status symbols.

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The new digital era has enabled brands to selectively target their customers that may potentially be
interested in their brand or based on previous browsing interests. Businesses can now use social
media to select the age range, location, gender and interests of whom they would like their targeted
post to be seen by. Furthermore, based on a customer's recent search history they can be ‘followed’
on the internet so they see advertisements from similar brands, products and services, This allows
businesses to target the specific customers that they know and feel will most benefit from their
product or service, something that had limited capabilities up until the digital era.
Benefits of social media marketing

 Allows companies to promote themselves to large, diverse audiences that could not be reached
through traditional marketing such as phone and email-based advertising.
 Marketing on most social media platforms comes at little to no cost- making it accessible to
virtually any size business.
 Accommodates personalized and direct marketing that targets specific demographics and
markets.
 Companies can engage with customers directly, allowing them to obtain feedback and resolve
issues almost immediately.
 Ideal environment for a company to conduct market research.
 Can be used as a means of obtaining information about competitors and boost competitive
advantage.
 Social platforms can be used to promote brand events, deals, and news.
o Platforms can also be used to offer incentives in the form of loyalty points and discounts.
Self-regulation
The ICC Code has integrated rules that apply to marketing communications using digital interactive
media throughout the guidelines. There is also an entirely updated section dealing with issues
specific to digital interactive media techniques and platforms. Code self-regulation on use of digital
interactive media includes:

 Clear and transparent mechanisms to enable consumers to choose not to have their data collected
for advertising or marketing purposes;
 Clear indication that a social network site is commercial and is under the control or influence of
a marketer;
 Limits are set so that marketers communicate directly only when there are reasonable grounds to
believe that the consumer has an interest in what is being offered;
 Respect for the rules and standards of acceptable commercial behaviour in social networks and
the posting of marketing messages only when the forum or site has clearly indicated its
willingness to receive them;
 Special attention and protection for children.

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Understanding the market

One-way marketers can reach out to consumers, and understand their thought process is through
what is called an empathy map. An empathy map is a four-step process. The first step is through
asking questions that the consumer would be thinking in their demographic. The second step is to
describe the feelings that the consumer may be having. The third step is to think about what the
consumer would say in their situation. The final step is to imagine what the consumer will try to do
based on the other three steps. This map is so marketing teams can put themselves in their target
demographics shoes. Web Analytics are also a very important way to understand consumers. They
show the habits that people have online for each website. One particular form of these analytics
is predictive analytics which helps marketers figure out what route consumers are on. This uses the
information gathered from other analytics, and then creates different predictions of what people will
do so that companies can strategize on what to do next, according to the people’s trends.

 Consumer behaviour- the habits or attitudes of a consumer that influences the buying process of
a product or service. Consumer behaviour impacts virtually every stage of the buying process
specifically in relation to digital environments and devices.
 Predictive analytics- a form of data mining that involves utilizing existing data to predict
potential future trends or behaviours. Can assist companies in predicting future behaviour of
customers.
 Buyer persona- employing research of consumer behaviour regarding habits like brand
awareness and buying behaviour to profile prospective customers. Establishing a buyer persona
helps a company better understand their audience and their specific wants/needs.
 Marketing Strategy- strategic planning employed by a brand to determine potential positioning
within a market as well as prospective target audience; involves two key elements: segmentation
and positioning. By developing a marketing strategy, a company is able to better anticipate and
plan for each step in the marketing and buying process.

Sharing economy

The "sharing economy" refers to an economic pattern that aims to obtain a resource that is not fully
utilized. Nowadays, the sharing economy has had an unimagined effect on many traditional elements
including labor, industry, and distribution system. This effect is not negligible that some industries
are obviously under threat. The sharing economy is influencing the traditional marketing channels by
changing the nature of some specific concept including ownership, assets, and recruitment.
Digital marketing channels and traditional marketing channels are similar in function that the value
of the product or service is passed from the original producer to the end user by a kind of supply
chain. Digital Marketing channels, however, consist of internet systems that create, promote, and
deliver products or services from producer to consumer through digital networks. Increasing changes
to marketing channels has been a significant contributor to the expansion and growth of the sharing
economy. Such changes to marketing channels has prompted unprecedented and historic growth. In
addition to this typical approach, the built-in control, efficiency and low cost of digital marketing
channels is an essential features in the application of sharing economy.
Digital marketing channels within the sharing economy are typically divided into three domains
including, e-mail, social media, and search engine marketing or SEM.

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 E-mail- a form of direct marketing characterized as being informative, promotional, and often a
means of customer-relationship management. Organization can update the activity or promotion
information to the user by subscribing the newsletter mail that happened in consuming. Success
is reliant upon a company’s ability to access contact information from its past, present, and
future clientele.
 Social Media- Social media has the capability to reach a larger audience in a shorter time frame
than traditional marketing channels. This makes social media a powerful tool for consumer
engagement and the dissemination of information.
 Search Engine Marketing or SEM- Requires a more specialized knowledge of the technology
embedded in online platforms. This marketing strategy requires long-term commitment and
dedication to the ongoing improvement of a company’s digital presence.
Other emerging digital marketing channels, particularly branded mobile apps, have excelled in the
sharing economy. Branded mobile apps are created specifically to initiate engagement between
customers and the company. This engagement is typically facilitated through entertainment,
information, or market transaction.
5.3.2 E-Catalogues

 An electronic catalogue is an online publication, that is to say a graphic interface -generally

an html page in which the products and services offered by a company are showed. Digital
catalogues can store great quantities of items, which can be organized and classified into
different categories for users to search in a more rapid and effective way.
 There are different types of catalogues according to their functions. The simplest
catalogues show only descriptions of the products and price lists, and do not enjoy a purchase
and payment online method. Others have shopping carts, order forms and offer payment
methods. The amount of functions an online catalogue has will determine the price of its
development.
 The main aims of e-catalogues are to advertise, to sell, to distribute, and to draw the
customer’s attention. They are the digital representation of a company and a powerful e-
commerce tool. In the e-commerce world we find business-consumer transactions and
business to business transactions. In this way, e-catalogues are excellent communication
tools between a company and its client, suppliers or other companies. For all these reasons,
catalogues became a marketing tool used every day by different types of organizations.
 There are different types of electronic catalogues according to the way they appear on the
Internet. Retailer’s e-catalogues are generally independent pages on the Internet, and their
aim is to promote and sell products and services. But, big companies generally include their
e-catalogues on their general websites. Generally, they are not used as tools for selling but as
means to promote products and services and to draw the customer’s attention. There are also
malls, that is to say e-catalogue groups –ebay.com for example. In this case, an Internet
provider gathers different companies’ digital publications, showing a great number of offers
made by the users.

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Advantages
E-catalogues bring many advantages to different companies. Here we show them to you for you to
consider catalogues as a promotion tool for your company:
 Low-costs:
Unlike conventional catalogues, these e-catalogues allow you to save money, since you will not need
to spend on paper and printing. For this reason, they are perfect for small and medium-sized
companies, which will have, with them, the possibility of getting into the world market.
 Market-expansion
Thanks to the possibilities that the Internet provides, people around the world will be able to gain
access to your online catalogues any time. With these catalogues, different companies gain new
customers, providing a faster and more comfortable service to consumers. By using these catalogues,
users will be able to search for products and services, place orders, make payments by credit cards or
payment portals, and clear up their doubts. In this way, sales increase considerably.
 Interaction
Unlike printed catalogues, digital catalogues allow a direct relationship between the company and its
clients. With an e-catalogue, a company can inform about its products and services to its clients, who
will contact the company’s representatives to clear up their doubts, to make comments or
suggestions. Because of this, company will be permanently updated about the fluctuating necessities
of their target.
 Information-for-customers
With these catalogues, each company will be able to provide information on the products and
services it offers and links to other websites for customer to get complementary information on the
subjects the company’s website leads with.
 Regular-update
E-catalogues content is stored on a server to which navigators from all over the world have access.
They can be updated from the server in a regular, fast and easy way. What is more, the changes
made are immediately available for customers to see. In this way, catalogues show the latest about
new products, prices, points of sale, new technology incorporations, etc.

5.4 Supply Chain Marketing – Logistics, features, stages in SCM.

In commerce, supply chain management (SCM), the management of the flow of goods and
services,] involves the movement and storage of raw materials, of work-in-process inventory, and of
finished goods from point of origin to point of consumption. Interconnected, interrelated or
interlinked networks, channels and node businesses combine in the provision
of products and services required by end customers in a supply chain. Supply-chain management has
been defined as the "design, planning, execution, control, and monitoring of supply-chain activities
with the objective of creating net value, building a competitive infrastructure, leveraging worldwide
logistics, synchronizing supply with demand and measuring performance globally." SCM practice
draws heavily from the areas of industrial engineering, systems engineering, operations
management, logistics, procurement, information technology, and marketing and strives for an
integrated approach. Marketing channels play an important role in supply-chain
management. Current research in supply-chain management is concerned with topics related
to sustainability and risk management, among others. Some suggest that the “people dimension” of

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SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent

management are topics that have, so far, been underrepresented on the research agenda.
Although it has the same goals as supply chain engineering, supply chain management is focused on
a more traditional management and business based approach, whereas supply chain engineering is
focused on a mathematical model based one.
Supply chains were originally defined as encompassing all activities associated with the flow and
transformation of goods from raw materials through to the end user, as well as the associated
information flows. Supply-chain management was then further defined as the integration of supply
chain activities through improved supply-chain relationships to achieve a competitive advantage.
In the late 1990s, "supply-chain management" (SCM) rose to prominence, and operations managers
began to use it in their titles with increasing regularity.
Other commonly accepted definitions of supply-chain management include:

 The management of upstream and downstream value-added flows of materials, final goods, and
related information among suppliers, company, resellers, and final consumers.
 The systematic, strategic coordination of traditional business functions and tactics across all
business functions within a particular company and across businesses within the supply chain,
for the purposes of improving the long-term performance of the individual companies and the
supply chain as a whole
 A customer-focused definition is given by Hines (2004:p76): "Supply chain strategies require a
total systems view of the links in the chain that work together efficiently to create customer
satisfaction at the end point of delivery to the consumer. As a consequence, costs must be
lowered throughout the chain by driving out unnecessary expenses, movements, and handling.
The main focus is turned to efficiency and added value, or the end user's perception of value.
Efficiency must be increased, and bottlenecks removed. The measurement of performance
focuses on total system efficiency and the equitable monetary reward distribution to those within
the supply chain. The supply-chain system must be responsive to customer requirements."
 The integration of key business processes across the supply chain for the purpose of creating
value for customers and stakeholders
 According to the Council of Supply Chain Management Professionals (CSCMP), supply-chain
management encompasses the planning and management of all activities involved in sourcing,
procurement, conversion, and logistics management. It also includes coordination and
collaboration with channel partners, which may be suppliers, intermediaries, third-party service
providers, or customers. Supply-chain management integrates supply and demand management
within and across companies. More recently, the loosely coupled, self-organizing network of
businesses that cooperate to provide product and service offerings has been called the Extended
Enterprise.

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Functions

Supply-chain management is a cross-functional approach that includes managing the movement of

raw materials into an organization, certain aspects of the internal processing of materials into
finished goods, and the movement of finished goods out of the organization and toward the end
consumer. As organizations strive to focus on core competencies and become more flexible, they
reduce their ownership of raw materials sources and distribution channels. These functions are
increasingly being outsourced to other firms that can perform the activities better or more cost
effectively. The effect is to increase the number of organizations involved in satisfying customer
demand, while reducing managerial control of daily logistics operations. Less control and more
supply-chain partners lead to the creation of the concept of supply-chain management. The purpose
of supply-chain management is to improve trust and collaboration among supply-chain partners thus
improving inventory visibility and the velocity of inventory movement. In this section we have to
communicate with all the vendors, suppliers and after that we have to take some comparisons after
that we have to place the order.

Importance

Organizations increasingly find that they must rely on effective supply chains, or networks, to
compete in the global market and networked economy. In Peter Drucker's (1998) new management
paradigms, this concept of business relationships extends beyond traditional enterprise boundaries
and seeks to organize entire business processes throughout a value chain of multiple companies.
In recent decades, globalization, outsourcing, and information technology have enabled many
organizations, such as Dell and Hewlett Packard, to successfully operate collaborative supply
networks in which each specialized business partner focuses on only a few key strategic
activities. This inter-organisational supply network can be acknowledged as a new form of
organisation. However, with the complicated interactions among the players, the network structure
fits neither "market" nor "hierarchy" categories. It is not clear what kind of performance impacts
different supply-network structures could have on firms, and little is known about the coordination
conditions and trade-offs that may exist among the players. From a systems perspective, a complex
network structure can be decomposed into individual component firms. Traditionally, companies in a
supply network concentrate on the inputs and outputs of the processes, with little concern for the
internal management working of other individual players. Therefore, the choice of an internal
management control structure is known to impact local firm performance.
In the 21st century, changes in the business environment have contributed to the development of
supply-chain networks. First, as an outcome of globalization and the proliferation of multinational
companies, joint ventures, strategic alliances, and business partnerships, significant success factors
were identified, complementing the earlier "just-in-time", lean manufacturing, and agile
manufacturing practices. Second, technological changes, particularly the dramatic fall in
communication costs (a significant component of transaction costs), have led to changes in
coordination among the members of the supply chain network.
Many researchers have recognized supply network structures as a new organisational form, using
terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production
Network", and "Next Generation Manufacturing System". In general, such a structure can be defined

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as "a group of semi-independent organisations, each with their capabilities, which collaborate in
ever-changing constellations to serve one or more markets in order to achieve some business goal
specific to that collaboration"
The importance of supply chain management proved crucial in the 2019-2020 fight against the
coronavirus (COVID-19) pandemic that swept across the world. During that event, governments in
countries that had in place an effective domestic supply chain management had enough medical
supplies to support their needs and enough to donate their surplus to front-line health workers in
other jurisdictions. Some organizations were able to quickly develop foreign supply chains in order
to import much needed medical supplies.
Supply-chain management is also important for organizational learning. Firms with geographically
more extensive supply chains connecting diverse trading cliques tend to become more innovative
and productive.
The security-management system for supply chains is described in ISO/IEC 28000 and ISO/IEC
28001 and related standards published jointly by the ISO and the IEC. Supply-Chain Management
draws heavily from the areas of operations management, logistics, procurement, and information
technology, and strives for an integrated approach.

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TERMINAL QUESTIONS

SECTION A

1. Define Data Mining.

2. Differentiate between E-commerce and E-business.
3. What do you mean by E-Business?
4. What is EDI?
5. Give an example each for G2B model and C2 B.
6. Expand the terms EDI and EFT.
7. What do you mean by plastic money and e-money?
8. What is digital marketing?
9. Define the term virtual reality.
10. What is blogging?
11. Define E-catalogue.
12. What is SCM?
13. List out the types of SCM.
14. Differentiate between Upstream and Downstream SCM.
15. What is meant by Search Engine Optimization?
16. Expand SEO and SEM.
17. What are the non-technical risks in e-commerce?
18. What do you mean by the term Encryption?
19. What is Digital Signature?
20. Differentiate between Credit and Debit cards.

SECTION B
1. Differentiate between Traditional and E-business.
2. What are the advantages of E-business?
3. List out the Disadvantages of E-Business?
4. Write a note on revenue generating models of E-commerce.
5. What is meant by Web auction? What are the different types of web auctions?
6. Write a note on EDI documents.
7. What are the components of an E-catalogue?
8. Write down the advantages and disadvantages of digital marketing.
9. Which are the elements linked in an SCM?
10. Differentiate between traditional and digital marketing.
11. What are the advantages and disadvantages of B2C business?
12. Write a brief note on EDI technology.
13. List out the security issues in E-commerce.
14. What are the measures can be adopted towards reducing security risks in e-business?

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15. Differentiate between data mining and data warehousing.

16. What is a Firewall? What are the different types of firewalls?
17. What is meant by Ethical issues in e-commerce, illustrate with examples.
18. What are the advantages and disadvantages of e-catalogues?
19. List a few modes of E-payment systems.
20. What are the main risks involved in E-payment?

SECTION C

1. Explain in detail the latest trends in MIS with respect to the development of information
technology.
2. Write brief notes on E-business and its models with neat sketches.
3. What do you mean by E-payment system? What are the different modes of payments
available now?
4. Write a brief note on various elements involved in supply chain and its classifications.
5. Compare and contrast various modes of digital marketing with its advantages and risks.

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CASE STUDIES ON MIS

Case 1: Case of ABC company

ABC and company is a leading manufacturer of Industrial Pumps, specializing in pumps for petro-
chemical industries. The organization employs 12,456 employees. With manufacturing facilities near
a major metropolis, the company has marketing offices in several cities. There are 35 departments in
which all employees are distributed. The employees in sales and service network are distributed
across various cities where company has marketing offices. Whenever there is a vacancy, the
personnel department releases appointment advertisements in newspapers calling for applications
from interested candidates.

Recently, an advertisement was released for a Metallurgist having Master’s Degree in Engineering
and a minimum experience of 15 years in Design activity relating pumps. The knowledge of German
language was considered to be a necessity as the company has technical collaboration with German
firm.

While the process of scanning the responses and calling the candidates for interview was in progress,
some existing employees approached the Personnel Manager claiming that the in-house talent had
been neglected. There were several employees, working in different departments who were meeting
the requirements of the job. The question posed by the employees was “why the company is seeking
someone from outside when the organization can be promoted?” this question set the use in such
thinking.

It certainly was not his intention to get someone from outside or intentionally neglect in house
talent. It just happened that personnel department did not have the information about employees that
could be easily accessed for use in such situations.

Question

As information specialist, propose a system solution that would provide appropriate information
support to the Personnel Manager about employees.

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Case 2 : Radio Frequency Identification Technology (RFIT)

Tags with the technology known as RFIT transmit a digital response when contacted by radio signals
from scanning devices. RFIT have created billion dollar opportunity for the tech vendors back home.
Older versions of the technology have been around for decades, but now major manufacturers and
retailers and the defense department are pushing to speed the development of a new version that
could be read by scanners anywhere in the world making it cheaper and more efficient to track the
flow of goods from global suppliers to consumers. With an estimated current market size of $1
billion , the RFIT market will surge to $3.8 billion by 2019-20.

Walmart Stores of USA made a similar arrangement in July 2015 when it said it was requiring its top
100 suppliers to place the tags with new technology on cartons and pallets shipped to its stores by
the end of 2016. Radio frequency tags are currently used in products like wireless auto keys, toll
collection systems and livestock and military ornament tracking devices. A radio tagging system at
Prada’s store in SOHO in Manhattan identifies the clothes a shopper takes into a dressing room and
allows shopper to call up on an electronic screen images of the items being modelled and
information technology grows, so do efforts by piracy advocates to place limits on its use. Unlike bar
codes, radio tags can be read through walls and multiple tags can be read in an instant.

There may benefits from keeping the tags active once the product is sold. Washing machines, for
example might identify the clothes in a load and automatically select the appropriate cleaning cycle.

For now, the cost of the tags from 25 cents to 30 cents each make them too expensive to put on most
individual items. Beyond that, business are not yet prepared to handle, much lens exploit, the flood
of data that individualized tagging would create.

Logistics consultants say there are billions of dollars to be saved in creating automated tracking
systems that can help reduce loss during distribution and speed up sorting in warehouses.

RFIT, half the size of a grain of sand listens for a radio query and responds by transmitting its unique
ID code. The biggies like Infosys, Wipro, Cognizant, Texas Instruments are already in the race,
churning out solutions that would constantly track things and their movement.

The technology permits retailers to slim inventory levels to reduce theft, which is estimated at $550
billion a year. Retailers simply adore the concept, Walmart and UK based grocery chain Tesco,
German retail chain Metro are beginning to install, smart shelves with networked RFIT readers. The
consumer goods giant Gillette said it would purchase 500 million RFIT tags from the US based
Alien technology. European Central Bank is planning a project to embed RFIT tags into bank notes
by 2020. Intended to foil counterfeiters, it would create an instant mass market for RFIT chips as
Europe prepares for a massive change over to the Euro.

Cognizer company has over 30 business analysts and software professionals involved in building the
competency in RFIT. RFIT has been there for decades. Cost of the technology and lack of standards
hampered its wide spread adoption. The estimated threshold price for mass adoption is 5 cents (the

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cost at which there is viability in affixing a tag to a can of coke) which experts feel, can be met by
2020.

Questions:

1. Explain why manufacturers use tags with RFIT solution and expertise to their products?
2. Discuss about the future of RFIT technology and its benefits to the retailers and
manufacturers of products quoting suitable examples of your own.

Case 3: Data Storage Market set to Explode.

Even in India, the September 11 incident in USA has exploded the market for data storage systems
by ten times from US $25 million just a year back, has gone up to $250 million in 2003. As per
various market researchers , storage and management of information has to be given top priority by
Indian CIOs.

Likewise, Global storage needs are doubling every year, with storage expected to reach into a $100
billion industry by 2005. Gartner researchers had estimated the total Indian storage market at
Rs.2000 crores in 2003. This growth in data has been driven by the rise in:

 Data centre services

 Small and medium enterprises (SMEs) aligning their business process with technology.
 Increase in implementation of enterprise level applications such as ERP and CRM.
 More and more application get web based, resulting in a huge growth of data, creating a need
for backing it up and protecting from disaster.

The mission critical nature of information is driving the need for high capacity drives and automated
data protection schedules that involve minimum human intervention in the opinion expressed by
country manager of Legato Systems India, a storage software company.

Indian CIOs realize that today’s computer storage needs have evolved from simply backing up on a
tape to pulling data from multiple heterogenous environments across the enterprise and managing
these functions from a central vantage point.

Storage spending cannot be seen as an island distant from the rest of the business. Storage needs are
to be considered as a part of the overall solution because advanced functionality provided by such
software plays a vital role in administering distributed IT assets, maintaining high availability, and
minimalizing downtime- the country manager of Legal Systems India added.

Hughes Escorts Communication Ltd. (HECL) which offers managed hosting services and
application services to its 40 odd customers along with the broad band solutions, has deployed

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storage software solutions to handle the data in the excess of 2.5 tera bytes in its Internet data Centre.
“Since the customers typically allow data backups only in the night time, the backup window time is
very much limited. The deployment of this software minimized the backup window time to a large
extent” says the Director of Operations, HECL. “The disaster recovery operation allows to take the
mirror image of the entire data so that the same can be restored in case of any disaster without any
loss of data and tune” he further added.

Questions

1. Why data storage needs and management of information are has taken a prominent place
in the recent years?
2. Do you think what HECL and Legato Systems have suggested data Storage as vital
points? Why or why not? Supplement with your views.
3. What is Disaster recovery? What is the purpose of business recovery plans?

Case 4: HIGH PERFORMING COMPUTING (HPC) or SUPER COMPUTING

HPC blazes into business world, Supercomputing is finding its way of muted corridors of high-end
research labs into commercial and more lucrative alleys of the business world. HPC is for instance
scientific research which requires tremendous processing power in terms of teraflops ( a trillion
floating point operations per second)was meant earliest for research in weather forecasting or
computational atmospheric sciences. To give an idea about a teraflop, seventeen teraflops are used
for modelling the earth atmosphere and ocean in a short span of time. Now, HPC is used in large
organizations like FedEx or Pharma companies who want to get their drugs introduction into the
market as fast as possible.

R.K Arora, C-DAC Director, Pune says “I am a firm believer in technology driving the demand,
rather than demand driven technology. We have technology to do a number of things. It is just that
these technologies have to be suitably tweaked to make them relevant to the masses, ex: wireless
technology . it has been around for quite sometime but making it available in a manner (in a handset)
which the people would want to use , is what makes it hot.

There was so much of an opposition when India’s first super computer Param was developed. “A
number of questions were asked as to why were hundreds of crores of rupees were being spent to
develop this system, who would be the users and so on. But what people don’t realize is:

When something like this is created, our thinking processes are accelerated. Now Param has been
installed in Russia being utilized by scientists to simulate the blood circulation in a human body
which would ultimately lead to discovering the causes of cardiac ailments.”

Reiterating this point Dr. David Kahner, founding Director, Asian Technology Information
Programme, Japan, the number of crunching ability of super computers is now moving on to even

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stock market analysis. “Using this power, stock analysis are able to predict the movement of stocks
in the capital market.” He added.

The HPC domain is no longer dominated by mere theory and experiments. Commercial projects like
supply chain management (SCM), Enterprise Resource Planning (ERP), ,Product Lifecycle
Management (PLM) and Customer Relationship Management (CRM) are all using supercomputing
abilities to come out with applications for the business environment.

The buzz right now is , however complex task is , it has to be completed in second time and there
should be no room for error too. For instance, in life sciences , for protein folding, using petaflop
machine which can handle 1000 million operations per second can complete a part of the project in
an year. On teraflop machine it will take 1000 years and who is going to be there to use it, if it takes
that much time.” Says Dr. Tilak, VP of T.J. Watson Research Centre, IBM, US.

Questions:

1. ‘Market driven companies, like Silicon Graphics, Hewlet-Packard and IBM have a much
broader focus than just building the world’s fastest companies. ‘Explain your views on the
statement.
2. What management, organization and technology issues should be considered when selecting
a high-performance computing?

Case 5:

A waiter takes an order at a table, and then enters it online via one of the six terminals located in the
restaurant dining room. The order is routed to a printer in the appropriate preparation area: the cold
item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink.
A customer’s meal check-listing (bill) the items ordered and the respective prices are automatically
generated. This ordering system eliminates the old three-carbon-copy guest check system as well as
any problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the cooks
send out an ‘out of stock’ message, which will be displayed on the dining room terminals when
waiters try to order that item. This gives the waiters faster feedback, enabling them to give better
service to the customers. Other system features aid management in the planning and control of their
restaurant business. The system provides up-to-the-minute information on the food items ordered
and breaks out percentages showing sales of each item versus total sales. This helps management
plan menus according to customers’ tastes. The system also compares the weekly sales totals versus
food costs, allowing planning for tighter cost controls. In addition, whenever an order is voided, the
reasons for the void are keyed in. This may help later in management decisions, especially if the

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voids consistently related to food or service. Acceptance of the system by the users is exceptionally
high since the waiters and waitresses were involved in the selection and design process. All potential
users were asked to give their impressions and ideas about the various systems available before one
was chosen.

Questions

1. In the light of the system, describe the decisions to be made in the area of strategic planning,
managerial control and operational control? What information would you require to make
such decisions?
2. What would make the system a more complete MIS rather than just doing transaction
processing?
3. Explain the probable effects that making the system more formal would have on the
customers and the management.

Case 6: Data Hacking in Avid Living Media

This case deals with the data hack issue involving the Ashley Madison website
and emphasizes the importance of a secure management information and data
security system for an organization. Ashley Madison, an infidelity website owned
by Avid Living Media, was hacked by a group calling itself the Impact Team in
July 2015. Impact stole the customer information profiles along with the sexual
preferences and personal data of the users and threatened to shut down ALM’s
network of cheating websites. They also threatened to publish the hacked data
online if ALM did not shut down those websites. ALM did not take any step
toward closure of the websites but assured its customers that their data was safe.
Eventually, Impact put the data on different search engines like trustify.com. This
created panic among the customers of Ashley Madison as they feared that
exposure of their information online would destroy their existing relationships and
their reputation...
Issues

The case is structured to achieve the following learning objectives:

 Understand the issues and challenges involved in maintaining a secure management information
system.

 Analyze how Avid Life Media can cope with the data breach issue.

 Explore ways to establish a network of reliable and safe online transactions.

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Case 7: THE BUSINESS VALUE OF AN EXPERT SYSTEM

Konica Business Machine (KBM), USA with a view to go ahead of its competitors and to have
competitive advantage, turned to artificial intelligence and the world wide web to enhance service.
For them, part of staging competitive ahead of competition like Canon USA and Xerox, is fixing
jammed copy machines fast. For the photocopying manufacture, providing technicians in the field
with better problem-solving tools were needed.

Konica started using its own website to make available knowledge base of 48,000 possible problem
solutions to 5000 dealer technicians to cover entire USA in north, south, east ,west and central
America. Technicians have a choice of using the website or calling help desk agents , who use the
same knowledge base for solutions.

EdHoyer, Director of Customer and Technical Support at Konica said “ we knew that as fast as the
market was changing and as expensive as it was to keep this knowledge in people’s heads, we need
to get to the point where we could use the web to keep ahead.”

Using the system, a user can type in a problem, such as ‘paper jammed in machine’. The expert
system narrows down the questions and offers options for solving the problem. About 82% of
incoming calls can be answered using the database as per Konica. Konica’s system ties software
Artistry’s experts Advisory call and problem management software to a web link. The cost of this to
Konica is $100,000 for 20 help desk seats which can replace 8 -10 people’s work as per Konica. So
far, the expert system has not reduced the number of incoming calls to the call centre but has cut the
time callers spend waiting on hold by 20%. This is a worthy point to Konica, considering the
turnover among technicians occurs about every 18 to 24 months and many employees are to tackle
problems of this type for the first time.

‘Diagnosing accurately means savings on labour and time’ says manager technical support at
Konica’s help desk in Windsor, Connecticut. System helps new employees most, who are less
familiar with fixing the machines.

Help center employees earlier had no way to share information for fixing copy machines, typically
referring to a paper manual or past trouble shooting experience to solve problems.

Now, the technician can review the solution to the problem on the web, go out to the customer with
printed version, and accurately apply the fixes as per the manager, technical support.

Company further plans to:

 Provide some technicians with laptops to let then use the system from a customer site as well
as from their office PCs also.

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 Open web queries to its customers to help them solve many problem themselves.

Questions

1. Mention the business benefits of the Expert Advisor system of Konica.

2. What is the business value of opening up Expert Advisor to web queries from customers?

Case 8:

The leasing of solar energy equipment’s for industrial use is a potential alternative to federally
subsidized programmes for encouraging use of solar technology. The factors encouraging the leasing
of solar equipment’s include rising fuel costs, decreasing cost of solar technology and the business
energy property tax credit (BEPTC). The later measure , pass by congress in 1980, added an
incentive credit of 15% for energy savings on top of the already existing 10% business investment
tax credit.

Planned Energy International (PEI) is perhaps the first company to have formalized a leased for
solar equipment’s. According the PEI’s President, Billie Johnson, the company leased 52 solar
panels to a California Laundromat. She estimated the savings to the business would be $165,000
over the seven-year lease , including $720 in the first year.

Under a typical arrangement PEI conducts extensive energy audits of the potential client company
and estimates the potential savings on utility bills each year under a lease agreement. Once the lease
is signed, PEI assumes all the responsibilities for purchasing, delivering , installing and maintaining
the solar equipment’s.

Questions

1. What appears to be the goals of each organization in relation to solar energy.?

2. What are the information requirements for each goals?
3. Which decision model fix each organization?

Case 9:

Recently, the management consulting firm of McKinsey and company conducted an index study of
37 firms consider to be examples of well managed companies. The study revealed 8 attributes that
the firms have in common. The most significant attributes were concentration of one key business
values , simple form and lean staff, a bias towards action and emphasis on doing what they know
best.

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Some of the companies used modern management tools such as decision support systems and
strategic planning. Rather than a perfect overall plans , they preferred control experiments. The
general attitude was “get some data; do it; adjust it” .

Both new ideas and problems were handled quickly. Ideas were implemented quickly on small scale,
with the results leading to rapid expansion or idea to be discarded. Problems were put into the hands
of a task force, or a person with temporary but extraordinary power. Action, not reports, were
expected. A later follow up will evaluated the action taken; rewards or criticism would then result.
Most problem handlers prefer to find solutions expeditiously and returned to their interrupted work.

Questions

1. What form of decision making is illustrated in these ‘well-run’ companies?

2. What are the decision attributes?
3. What information of greatest interest to those who are assigned problems?

Case 10: Developing of Test Automation Tools (TAT)

Deccanet Software, a telecom technology company provides services, products and tools for the
telecom, datacom and embedded verticals. Its technical capabilities include 3G, 4G wireless
technologies, protocol stacks, system software, convergence, embedded systems, telecom test
automation and carrier class system design. The company has already developed domain expertise in
wireless, convergence, optical, real-time embedded software systems, mediation and IP billing. The
company builds world class tools for software and system test automation for telecom and embedded
environments. Its suite of tools include fault avoidance, fault removal and fault tolerance.

The company has decided to expand its geographical reach across the US, Europe, Asia Pacific (with
a special focus on China, Japan and Taiwan). The company will be doubling its employee strength to
400 within a couple of quarters.

The managing Director of Deccanet Software, Venkat Rajendran expressed that the company would
make a sizable investment towards expansion, infrastructure and people. The size of the investment
is kept secret as they have signed with the venture capitalists under disclosure terms. The company is
now funded by GVFL, TDA (an off shoot of depletion) and Intel Capital.

According to Venkat Rajendran, in telecom systems, testing is generally a manual and much disliked
process as it takes a significant percentage efforts. “Testing is an Achilles” heel in software. It is
therefore, there exists a great scope for automation and Deccanet Software has the necessary
expertise in developing test automation tools for the complete testing lifecycle. To keep pace with
the rapid growth, the company has invested significantly in infrastructure and people. To meet its
demands, we are pursuing an aggressive drive or recruit hi-end telecom professionals says Venkat
Rajendran.

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Questions

1. What made Deccanet Software to think of venturing in test automation tools?

2. How does Venkat Rajendran justifies in selecting a much-disliked process?

Reference books:

1. James A. O’Brien, George M Marakas and Ramesh Behl2009 . Management Information Systems
, Tata McGraw Hill Education Private Limited, New Delhi
2. Kenneth C. Laudon and Jane P. Laudon, 2010. Management Information Systems, Pearson
Education, Noida
3. Efraim Turban, Carol Pollard, et al., 2014. Information Technology for Management: Digital
Strategies for Insight, Action, and Sustainable Performance, Wiley.
4. McLeod, 2008 .Management Information Systems, Pearson Education, Noida.
5. Oz,2008. Management Information Systems, Cengage Learning India Pvt. Ltd, Delhi.
6. John McManus and Trevor Wood-Harper,2010. Information Systems Project Management,
Pearson Education, Noida.
7. Management Information System by CSV Murthy.HPH
8. MIS Text and Cases by Dr.Milind Oka, Everest Publishing House
9. MIS, by Saroj Kumar and Dileep Singh, Thakur Publishers

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