BUSINESS INFORMATION SYSTEM Types of information 2.

Tactic knowledge
(Module I) 1. Strategic information Tactic knowledge is personal knowledge that may or may not
Data This information used by the top level management. It is used be expressed by an individual.
Data are raw facts or observation typically about a physical for long term purpose. This information is useful to the broad Information and Communication Technology (ICT)
phenomenon. Any raw facts used for processing is called data. objectives and policies of organizations. ICT is defined as the combination of informatics technology
Information 2. Tactical information with other related technologies, specifically communication
The processed data are called information. Information will This information is used by middle level management for technology.
have logical connection and it is meaningful. effective utilization of resources of the firm. Information Technology
Difference between data and information 3. Operational information It is the study or use of systems for storing, retrieving and
Data Information This information is used by lower level management. This type sending information.
Raw facts and figures Processed data of information used for short term purpose. Types of communication devices
unprocessed Knowledge  Telephone
Data is sometimes unrelated Information will have some Knowledge plays a vital role in day to day operation of running  Telegraph
to one another. logical connection. an organisation. Knowledge can referred to as acquiring and  Telex
It may or may not be It is always meaningful remembering a set of facts or the use of information to solve  E-mail
meaningful problems.  Television
It cannot directly used for Always used in decision Features of knowledge:  Audio conferencing
decision making. making process. 1. Knowledge is infinite.  Video conferencing
Unorganized structure. Organized structure. 2. Dynamic  Document imaging
No value. Have value. 3. Continuous and ever expanding.  Mobile phones
Characteristics of information 4. Becomes obsolete.
 Voice mail
1. Accuracy 5. Provisional, subject to criticism.
Applications of ICT
2. Completeness 6. Contradiction, change or modification.
1. ICT in business
3. Timeliness Types of knowledge
2. ICT in financial services
4. Relevance 1. Explicit knowledge
3. ICT in entertainment
5. Reliability It is the most basic form of knowledge that can be easily passed
4. ICT in public service
on to others. When data is processed, organized, structured
5. ITC in education
and interpreted, the result is explicit knowledge.

Role of ICT in business / Significance of IT in business 4. Common data base Functions of MIS
 Global reach 5. Avoid redundancy in database  Data capture and collection
 Productivity 6. Heavy planning  Storage
 Commercial advantage 7. Subsystem concept  Information processing
 Monitoring 8. Common data flow  Distribution and dissemination of information
 E-commerce 9. Flexibility and ease of use MIS and other academic discipline
 Teleconference Basic concepts of MIS 1. MIS and management accounting
 Communication  User-machine system 2. MIS and management science
 Inventory management  Integrated system 3. MIS and management theory
 Image scanning  Need for database 4. MIS and information technology
 Customer relationship management  Utilization of models Advantages of MIS
Information System Ethics Basic components of MIS  It facilitate planning
It is a branch of ethics that focuses on the relationship between 1. Data gathering  It minimize information overload
creation, organisation, dissemination and use of information, 2. Data entry  It encourage decentralization
and the ethical standards and moral codes governing human 3. Data transformation  It brings coordination
conduct in society. 4. Information utilization  It makes control easier
Ethical issues in IT Elements of MIS  It helps in strategic planning
 Misuse of personal information  Management  It increase efficiency of business
 Misinformation  Information  It helps in comparison of business performance
 Lack of oversight and acceptance of responsibilities  System Disadvantages of MIS
 Autonomous technology Purpose/Objectives of MIS  Lack of quality of output
Management Information System (MIS) 1. To manage effectively  Not a Substitute for judgement
According to Gerome Kanter, “A system that aids management 2. To reduce cost  No tailor made package
in making, carrying out and controlling decisions.” 3. To produce reports  Lack of flexibility
Characteristics/ features of MIS 4. To provide statistics
 Costly affair
1. Management oriented 5. To provide information for decision making
 Ignoring non-quantitative factors
2. Management directed 6. To improve efficiency and productivity
 Greater chance for failure
3. Integrated concept 7. To improve decision
 Frequent changes to top management
8. Protection of crucial information

 Hording of information Multiple approaches to the MIS structure Database: It is a centrally controlled collection of organized
Basic structural concept of MIS 1. MIS structure based on operating elements. data.
1. Public information system 2. MIS structure based on decision making. Procedures: Procedures are the operating instructions for the
It is a part of an organization and all the relevant persons have 3. MIS structure based on management activity. people who use an information system.
knowledge about the information system and everyone has 4. MIS structure based on organizational functions. Operating Personnel: People are needed for the operation of all
access. 1. MIS structure based on operating elements. information systems. The personnel in MIS include computer
2. Private information system The structure of management information system can be operators, programmers, system analyst and managers.
It is maintained by privately where certain piece of information viewed in terms of its operating elements. The various b. Processing function
are not available to others and there is a discrimination in file elements necessary for the operation of MIS is known as its An information system can also be described in terms of
accessing. operating elements. Operating elements of MIS consists of processing function. The important processing functions are
3. Formal information system a) Physical components. a. Process transactions
There is a certain well prescribed rules and procedures to be b) Processing functions. b. Maintain master files.
followed processing and data dissemination. c) Output for uses. c. Produce reports.
4. Informal information system a) Physical components: d. Process enquiries.
There is no rules and procedures for data processing and Hardware, Software, Database, procedures and operating e. Process interactive support applications.
sharing. personnel are the important physical component required for c. Output for users
5. Formal public information system the implementation of MIS in an organisation. Output is considered to be a major factor of an information
Management information system with its specified rules and Hardware: All physical components of computer system is system. It can be classified as
procedures is a part of formal public system called computer hardware. Important components includes a. Transaction documents
6. Informal public information system CPU, input output device, storage unit and communication Documents produced by transaction processing system are
Strict rules and procedures may not be found in this devices. called transaction documents.
information system. Software: Software provides the interface between users and  Action documents- These document initiate an action or
7. Formal private information system information system. It refers to the instruction given to the transaction on the part of the recipient. Eg: Purchase order.
Besides these formal and informal system, there are also formal hardware to perform various operations. Software can be  Information documents- These documents relates, confirm
and informal private system in an organization. divided in to two- system software and applications. or prove to their recipients that transaction have occurred.
8. Private informal information system  System software- It comprises of operating system, utility Eg: sales receipts, sales order confirmation.
Many individuals may maintain their own private information programs and special purpose programs.  Investigational documents- Reports of exceptions, errors or
system for discharging their duties more effectively.  Application- These are developed to accomplish a specific other conditions may be require investigation.
task.
b. Preplanned reports Characteristics / Features of programmed decisions consideration. They develop medium range plans and
These have a regular format and content. These reports are 1. These decisions are well defined. defining objectives of their departments.
produced at regular intervals. Eg; Inventory balance and sales 2. These decisions are repetitive and routine in nature. c. Operational management: Operational management or
analysis. 3. Cost of taking decision is low. lower level management deals with routine activities. They
c. Preplanned enquiry response. 4. Decision can be done with the help of computers. make short term plans to carry day to day activities more
Enquiries are handled on line which means the enquiry is made 5. Decision can be delegated to lower level employees. effectively and efficiently.
and the response is received immediately via terminal. 6. Predetermined decisions rules are used. 4. MIS structure based on organizational functions
d. Ad hoc reports. Non-programmable decision (Unstructured decision) MIS is typically an integrated combination of functional
These reports are produced at irregular intervals and the These types of decisions are occasional and unique in nature. information system that is designed to meet information
information content and its format has not been preplanned. There are no predefined procedures available to solve the requirement of the functional sub divisions of an organisation.
e. User machine dialogue. problem for each occurrence. It is also called unstructured Functional sub systems:
It is essentially a way in which a user can interact with a model decisions.  Production
to arrive at an analysis or solution. Characteristics / features of non-programmable decisions  Marketing
2. MIS structure based on decision making 1. These are occasional and unique in nature.  Human resource
The ultimate purpose of MIS is to make decision at all levels of 2. These are not repetitive.  Finance and accounting
operations based on information flow. The habit of making 3. No predefined procedures.  Logistics
decisions is based on the problem solving process. 4. These decisions cannot be delegated.  Information processing.
Decisions making involves the following 4 stages: 5. Cost of taking decision is high. Data redundancy
 Intelligence phase: This stage consists of identifying and 3. MIS structure based on management activity It occurs when the same piece of data is stored in two or more
understanding the problem occurring in an organisation. MIS provides useful information to different levels of separate places and it is a common occurrence in businesses.
 Design phase: In this stage decision makers evaluate all management for discharging their functions more effectively Open system
possible causes of action. and efficiently. Open systems are internal sub units that interact with other
 Choice phase: Under this stage, manager select most a. Strategic management: The first decision area of systems, that are outside of the organisation.
favourable cause of action from different alternatives. management is strategic planning level or top level Closed system
 Implementation: In this stage, decision is putting to effect. management. It consists of board of directors and other chief Closed system are the internal subunits of the organisation that
Programmed decision (Structured decision) executives. They make the organizational goal, objectives, do not interact with external environment.
It is the one in which decision rules are applied. These decisions strategies, policies etc. Sub system
are routine and repetitive. It is also called structured decision. b. Tactical management: Management control level or middle It is a single, predefined operating environment through which
level management decisions involve financial or personal the system coordinates the workflow and resource use.

Office automation system  Provide information to other functional systems Decision support system (DSS)
It is an information system which is computer based that  Meet the requirement of operational level of firm A decision support system can be defined as a system that
collects, processes, stores and transmits electronic messages. Components of TPS provides information for making semi structured and
Dissemination of information 1. Input unstructured decisions.
It means to distribute it so that it reaches many people or 2. Storage Characteristics/ capabilities of DSS
organisation. 3. Output 1. Facilitates decision making
Business Analytics Key properties of TPS 2. Support decision makers at any level
It is a set of disciplines and technologies for solving business  Atomicity 3. Meant for higher level management
problems using data analysis, statistical model, and other  Consistency 4. Computers as well as judgement
quantitative methods.  Isolation 5. Interaction
(Module II)  Durability 6. Task oriented
Types of MIS Transaction process cycle 7. Repeated use
1. Transaction processing system (TPS) 1. Data entry 8. Identifiable
2. Decision support system (DSS) 2. Transaction processing 9. Quick response
3. Group decision support system 3. Files and database processing 10.Technology
4. Executive information system (EIS) 4. Document and report generation Components of DSS
5. Expert system (ES) 5. Inquiry processing  Database
6. Management reporting system (MRS) Methods for processing transactions  Module base
Transaction processing system (TPS)  Batch processing  DSS software
It is the type of information system, that collect store modify Batch processing transactions are collected and accumulated  People resources
and retrieve daily transaction of an organization. over a period of time and processed periodically. Functions of DSS
Features of TPS  Online processing 1. Quick response
 Rapid response Transactions are entered on line, validated and processed 2. Monitor and control function
 Reliability immediately and results are available immedietly. 3. User interface
 Inflexibility  Data processing Types of DSS
 Controlled access Data is processed immedietly and provide immediate output to  Model-driven DSS
 Distribution of information to other system users. This type of DSS utalises model to perform different kinds of
 Historical data analysis. Here decision are based on models.
 Link with external environment

 Data-driven DSS 4. Provide competitive advantage 2. Nominal group techniques

It emphasis on collected data that is then manipulated to fit 5. Helps in reducing cost It is a structured method for group brain storming that
decision makers need. 6. High satisfaction among decision makers encourages contributions from everyone and facilitate quick
 Communication-driven DSS 7. Organisation control agreement on the relative importance of problems.
In this decisions enabled by communicating and sharing Limitations of DSS 3. Delphi method
information between groups and people through web, client 1. Computational problems It is a structured communication method, developed as a
server etc. 2. Low speed systematic, interactive forecasting method relies on a panel of
 Web based DSS 3. Limited to individual us experts.
The term simply describes any DSS that is operated through the Group decision support system (GDSS) Benefits of GDSS
interface of a web browser. GDSS is an interactive computer based system to facilitate a 1. Greater participation
 Personal DSS number of decision makers in finding solutions to problems 2. Open and free atmosphere
It is designed for individual in order to carry out daily work. that are unstructured in nature. 3. No criticism
 Intelligent DSS Features of GDSS 4. Pooling of knowledge
It helps the user to select right model based on the type of  High level of interaction 5. Personal development
problem being analyzed.  Criticism free idea generation 6. Information to non-participant
 Desktop DSS  Availability of information Limitations of GDSS
It can stored in small computer system even in personal  Stored information 1. Time consuming activity
computer.  Decision on priorities 2. Costly
 Knowledge-driven DSS Components of GDSS 3. No responsibility
This type of DSS are personal computer system with special 1. Decision makers 4. Individual domination
rules used to solve problems. 2. Database and model base Executive information system (EIS)
 Document-driven DSS 3. Groupware It is a type of management information system that facilitate
In this type uses documents in a variety of data types. In this Techniques of group decision making and supports senior executive information and decision making
type of DSS large volume of data are analyzed for decision 1. Brain storming needs.
making. It is a method of generating ideas and sharing knowledge to Features of EIS
Benefits of DSS solve a particular commercial or technical problem.  It is meant for top level management
1. Help in solving time  Pervasive in nature
2. Improve efficiency  Emphasis on external data
3. Boost up interpersonal communication  Information in summary form
Components of EIS 3. Most suitable to solve problem require knowledge and Artificial intelligence
1. Hardware subject thinking It is the ability of a digital computer or computer controlled
2. Software Management reporting system (MRS) robot to perform tasks commonly associated with intelligence
3. Models and graphics It is a part of management information system that provides being.
Benefits of EIS business information. This information can be in the form of (Module III)
1. Flexibility report or statements. Database
2. Reduce information overload Characteristics/ features of MRS Data base is collection of data, integrated and organized into a
3. Ability to analyze and compare  Developed by professionals single comprehensive file system.
4. Monitoring performance  Large and complex Necessity of a database
5. Improve the performance  No alternative solution  Reduced data redundancy
Expert system  Limited analytical capabilities  Reduced programming efforts
An expert system is a computer program that is designed to  Focus on past and present reporting  Faster response time
solve complex problems and to provide decision making ability Types of reports  Data independence
like a human expert.  Scheduled report  The ability to change
Components of expert system It is a report, which is produced at scheduled intervals. The  Cost reductions
 Hardware resources format is fixed in advance.  Information protection
 Software resources  Exception reports  Multi user support
 Knowledge base It is a type of report, which is produced only when exceptional Limitations of database
 People resource situations.  Concurrency problem
Advantages of expert system  Demand/ Adhoc report  Ownership problem
1. Availability It is a type of report, which contain special information and  More resource required
2. Cheaper non-routine information.  Security problem
3. Permanence Advantages of MRS Database management system (DBMS)
4. Knowledge based resource  Fast and effective report generation The software which is used to manage data base is called data
5. Fast response  Improve performance and productivity base management system. Examples; MySQL. Oracle etc.
6. Use in risky environment  Improved management decision making Characteristics of DBMS
Limitations of expert system  Competitive advantage  Data stored into tables
1. Not for solving general problems
 Less redundancy
2. Costly

 Consistency  Natural language interface system Database administrator (DBA)

 Multi users and concurrent access  Data dictionary DBA is a person who is responsible for defining, updating and
 Multiple views  Online access and update terminals controlling access the database. It simply refers to a person
 Definition and description of data  The output system or report generator who manage the data.
 Security Data definition language (DDL) Functions of DBA
 Query language It is used to define the structure of database. It is classified into 1. Communicate with users
 Data persistence two logical and physical. 2. Granting of authorization of data access
Advantages of DBMS Logical structure 3. Routine maintenance
1. Data independence The logical structure of database is called schema. It refers to 4. Establishing standard and procedures
2. No redundant data way the user view the data. 5. Ensuring database security and integrity
3. Efficient data access Physical structure 6. Backup and recovery
4. Data integrity It refers to the way data is physically stored. Types/ Structure/ Model/ Architecture of DBMS
5. Data security Functions of DDL 1. Hierarchical database model
6. Data administration  Description of schema or sub schema A hierarchical database model is a data model in which the data
7. Concurrent access and crash recovery  Description of data type and name are organized into a tree like structure. The data are stored as
8. Reduced application development time  Description of the keys records which are connected to one other through link.
9. Improved decision making  Provide physical and data independence Advantages of hierarchical model
Disadvantages of DBMS Data manipulation language (DML)  Simplicity
1. Not suitable for simple application It is a language used to manipulate data in the database. It  Data security
2. Complexity enable user to manipulate data, add new data, delete data and  Data integrity
3. Qualified personnel modifying data.  Efficiency
4. Costly Importance/Functions of DML Disadvantages of hierarchical model
5. Lower efficiency  To manipulate data such as adding. Deleting, modifying etc.  Implementation complexity
Components of DBMS  Provide support for several high level language.  Database management problem
 The database files  Provides relationship between records.  Lack of structural independence
 The users  It permits the users and application of program to process 2. Network database model
 A host language interface system data on a symbolic logical base. A network data base model is a database model that allows
 The application programs multiple records to be linked to the same owner files.

Advantages of Network Model  Inheritance Relational database management system (RDBMS)

 Conceptual simplicity  Capable of handling large variety of data Relational database management system is a type of database
 Capability to handle more relationship types  Applicability to advanced database applications management system that stores data in a row based table
 Easy to access Disadvantages of object oriented model structure which connects related data elements.
 Data independence  Lack of theoretical foundation Features of RDBMS
 Data integrity  Lack of standard  Provide data to be stored in tables
Disadvantages of network database model  Lack of experience  Persist data in the form of rows and columns
 System complexity  Competition  Provide multi user accessibility
 Absence of structural independence  Lack of support for security  Sharing common columns into two or more tables
3. Relational database model 5. Object relational model Terminologies of RDBMS
A relational database model is a model that stores and provides It is a combination of object oriented database model and Relation
access to data points that are related to one another. relational database model. It is said to be the middleman It means table. Relational database have several interrelated
Advantages of relational model between relational and object oriented database. tables each table called relation.
 Structural independence Advantages of object relational model Domain
 Conceptual simplicity  Extensibility Each column of a relational table is defined on a domain. A
 Easy to design  Encapsulation domain is a set of values.
 Easy to maintain and use Disadvantages of object relational model Attributes
Disadvantages of relational model  Complexity Columns of the table are called attributes. It is also called
 Hardware overheads  Increased cost database field.
 Easy of design can lead to bad design 6. Deductive/ Inferential database model Tuple
4. Object oriented database model A deductive database is a database system that can make Row of the table are called tuple.
It is a type of database model, it is used to store variety of data deductions based on rules and facts stored in the database. Cardinality
type including graphics, photographic, audio, video and text in 7. Logical database model The number of raws in the relation is called cardinality
multimedia format. A logical database model establishes the structure of data Degree
Advantages of object oriented model elements and the relationship among them. It is independent of The number of attributes in a relation is called degree.
the physical database. Keys
 Improved performance
It is an attribute which is used to identify data in database
 Improved reliability
Benefits of RDBMS
 Flexibility
 Data entry, updates and deletion will be effective.
 Easy reporting Data warehouse 7. Reduced manpower cost
 Data retrieval It is a central repository of information that can be analysed to 8. Reduced inventory and inventory cost
 Database follows a well formulated model make more informed decision. 9. Reduce material cost
 Changes in database schema are easy to make 10. Improve sales and customer service
Keys in RDBMS (Module IV) 11. Efficient financial management
Primary key Enterprise Resource Planning (ERP) Benefits of ERP
A primary key is the column or columns that contain values that ERP refers to a type of software that organizations use to  Single software
uniquely identify each row in a table. manage day to day business activities such as accounting.  Single reporting
Foreign key Procurement. Project management and supply chain  Smooth workflow
A foreign key is a column or set of columns in a table whose management.  Complete visibility
values correspond to the values of the primary key in another Material requirement planning (MRP)  E-commerce
table. MRP is a production planning, scheduling and inventory control  Extension
Candidate key system used to manage manufacturing processes  Easy tracking
A candidate key is a specific type of field in a relational Features of ERP  Different modules
database that can identify each unique record independently of  Flexibility  Flexibility
any other data.  Modular and open  Centralized storage
Alternate key  Comprehensive  More secure
Alternate key or secondary key is the key that has not been  Extensibility  Global management
selected to be the primary key but are candidate keys. It is  Customization capabilities  Improved customer service
considered a candidate key for the primary key.  Customer relation management  Reduced set up time
Super key  Resource management  Higher quality
A set of attributes that can uniquely identify a tuple is known as  Simulation of reality  Timely debt collection
super key. Need for ERP in business Disadvantages of ERP system
Data Dictionary 1. Business integration  Costly
It is a tool for arranging and storing information about the data 2. Flexibility
maintained in the database.  Time consuming
3. Better decision making
Data Mining  Difficult to measure the result
4. Use latest technology
It is the practice of analysing the large database in order to  Problem customization
5. Standardize and speed up manufacturing process
generate new information.  Difficult to learn
6. Standardized HR information

 Migration of data 10. End user training Name of ERP Software Companies
 Dependence on vendor 11. Post implementation 1. SAP
 Difficult to achieve decentralization ERP implementation methodologies 2. NetSuite
 Need greater care in evaluation  The big bang 3. Tallyprime
ERP software Big bang is the most ambitious and difficult of approach to ERP 4. Acumatica
 SAP implementation. According to this system companies abandon 5. Sageintacct
 Oracle application their old system at once and install a single ERP system across Cloud Computing
 People soft the entire company. It is a practice of using a network of remote servers hosted on
 Baan ERP  Modular implementation the internet to store, manage and process data rather than a
 One world This has been the most commonly used methodology of ERP local server or a personal computer.
Modules of ERP implementation. As per this method, one ERP module is
implemented at a time. (Module V)
 Production planning module
 Slam dunk Business process re-engineering (BPR)
 Purchasing module
It is used for smaller companies expect to grow into ERP. This BPR is the analysis and redesigning of core business processes
 Sales module
method of implementation ERP is implemented in one or a few to achieve the substantial improvement in its performance,
 Manufacturing module
critical processes which involves a few business unit. productivity and quality.
 Inventory control module Need and objectives of BPR
Issues/ challenges in the implementation of ERP
 Finance and accounting module  Changing nature of business operations
1. Rapid implementation
 HR module  Cost and cycle time reduction
2. Complexity in operation
Steps/ phases in implementing ERP
3. Overrun budgets  Promotes quality
1. Project planning phase
4. Lack of training  Impatient and demanding customers
2. Pre-evaluation screening
5. Lack of proper requirement analysis  Increased efficiency
3. Package evaluation
6. Lack of support from senior management  Better results and products
4. Gap analysis
7. Compatibility issues Process of BPR
5. Business process reengineering
8. Cost burden 1. Create business vision and define goal
6. Installation and configuration
9. Inadequate investment in infrastructure 2. Develop the process team
7. Project team screening
10. Human related issues 3. Identification of business process
8. System testing
11. Poor project management. 4. Selection of business process
9. Go live and support
5. Understanding of selected business process

6. Re-design the selected business process Data dictionary

7. Design and build a prototype of the process A data dictionary is a file or set of files that contains a
8. Implementation of re-designed business process databases metadata.
Advantages of BPR Gap analysis
 Drastic changes It is the process which companies create a complete model of
 Quality improvement where they are now and in which direction they are want to go
 Quick response in future.
 Change in the corporate culture Online processing
 Focus on customer Online processing is an automated way to enter and process
 Greater competitiveness data or reports continuously as use as the source of document
 Cost reduction are available
 Abandon conventional approaches to problem solving Big bang implementation
Issues and problems of BPR Big bang ERP implementation is used to describe a go live
 Lack of proper knowledge of reengineering scenario where a business switches from its existing system to a
new solution at a single point in time.
 Lack of training
 Lack of support from employees Prepared By:
 Lack of adequate resources JUBAIR MAJEED
 Lack of employee awareness
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 Unsatisfactory appraisal system
 Delay due to detailed process analysis
 Delay in achieving results
 Improper monitoring
 Inability to measure improvement
Subsystem
A subsystem is a single, predefined operating environment
through which the system co-ordinates the work flow and
resource use.