BBA - II SEMESTERBBA 205- MANAGEMENT INFORMATION SYSTEM

Q.1: Define MIS. Describe the characteristics and functions of MIS.

Meaning of MIS

Characteristics of MIS

Describing the functions of MIS

Answer:

Meaning of MIS:

MIS is an integrated system which provides information support for decision making in

organizations. MIS is successfully used for measuring performance and making necessary

changes in the organizational plans and procedures. It helps to build relevant and measurable

objectives, to monitor results, and to send alerts.

Characteristics of MIS:

o It supports transaction handling and record keeping.

o It is also called integrated Database Management System which supports in major

functional areas.

o It provides operational, tactical, and strategic level managers with easy access to timely

and for the most part, structured information.

o It supports decision –making which is a vital role of MIS.

o It is flexible which is needed to adapt to the changing needs of the organization.

o It promotes security system by providing access only to authorized users.

o MIS not only provides statistical and data analysis but also works on the basis of MBO

(management by objectives). MIS is successfully used for measuring performance and

making necessary changes in the organizational plans and procedures. It helps to build

relevant and measurable objectives, to monitor results, and to send alerts.

o Coordination: MIS provides integrated information so that all the departments are

aware of the problems and the requirements of the other departments. This helps in

equal interaction of the different center sand connects the decision centers of the

organization.

o Duplication of data is reduced since data is stored in the central part and the same data

can be used by all the related departments.

o MIS eliminates redundant data.

Describing the functions of MIS

The main functions of MIS are:

Data Processing: Gathering, storage, transmission, processing and getting output of the

data. Making the data into information is a major task.

Prediction: Prediction is based on the historical data by applying the prior knowledge

methodology, by using modern mathematics, statistics or simulation. Prior knowledge

varies on the application and with different departments.

Planning: Planning reports are produced based on the enterprise restrictions on the

companies and helps in planning each functional department to work reasonably.

Control: MIS helps in monitoring the operations, and inspects the plans. It consists in the

differences between operation and plan with respect to data belonging to different

functional departments. It controls the timely actions of the plans and analyzes the

reasons for the differences between the operations and the plans. Thereby, helps

managers to accomplish their decision making task successfully.

Assistance: It stores related problems and frequently used information to apply them

for relative economic benefits. Through this it can derive instant answers to the related

problems.

Database: This is the most important function of MIS. All the information needs a

storage space which can be accessed without causing any anomalies in the data.

Integrated Database avoids the duplication of data and thereby reduces redundancy and

hence consistency will be increased.

The major function of MIS lies in the application of the above functions to support the

managers and the executives in an organization indecision-making.

Q.2: What do you mean by ERP? Describe the situations before and after the existence

of ERP. Explain the challenges involved in ERP

Definition of ERP

Explaining the situations before and after ERP

Explaining the challenges in ERP

Answer:

Definition of ERP:

It is integrated cross functional software that reengineers manufacturing, distribution, finance,

human resources and other basic business processes of a company to improve its efficiency,

agility and profitability. ERP is built with a vision to providing businesses with an integrated

information system.

Explaining the situations before and after ERP:

Before

Prior to the concept of ERP systems, departments within an organization (for example, the

human resources (HR)) department, the payroll department, and the financial department)

would have their own computer systems. The HR computer system (often called HRMS or HRIS)

would typically contain information on the department, reporting structure, and personal

details of employees. The payroll department would typically calculate and store paycheck

information. The financial department would typically store financial transactions of the

organization. Each system would have to rely on a set of common data to communicate with

each other.

After

ERP software, among other things, combined the data of formerly separate applications. This

made the worry of keeping numbers in synchronization across multiple systems disappears. It

standardized and reduced the number of software specialties required within large

organizations.

Explaining the challenges in ERP

Success depends on the skill and the experience of the workforce, including training in how to

make the system work correctly. Many companies cut costs by cutting training budgets.

Privately owned small enterprises are often undercapitalized, meaning their ERP system is often

operated by personnel with inadequate education in ERP in general, such as APICS (advancing

productivity, innovations and competitive success) foundations, and in the particular ERP

vendor package being used.

Personnel turnover: companies can employ new managers, lacking education in the

company's ERP system, proposing changes in business practices that are out of

synchronization with the best utilization of the company’s selected ERP.

Customization of the ERP software is limited. Some customization may involve changing

of the ERP software structure which is usually not allowed.

Re-engineering of business processes to fit the "industry standard “prescribed by the

ERP system may lead to a loss of competitive advantage.

ERP systems can be very expensive to install often ranging from 30,000US Dollars to

500,000,000 US Dollars for multinational companies.

ERP vendors can charge sums of money for annual license renewal that is unrelated to

the size of the company using the ERP or its profitability.

Technical support personnel often give replies to callers that are inappropriate for the

caller's corporate structure. Computer security concerns arise, for example when telling

a non-programmer how to change a database on the fly, in a company that requires an

audit trail of changes so as to meet some regulatory standards.

ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and

business process of some companies – this is cited as one of the main causes of their

failure.

Systems can be difficult to use.

Systems are too restrictive and do not allow much flexibility in implementation and

usage.

The system can suffer from the "weakest link" problem – inefficiency inane department

or in one of the partners may affect other participants.

Many of the integrated links need high accuracy in other applications to work

effectively. A company can achieve minimum standards, and then over the course of

time "dirty data" will reduce the reliability of some applications.

Once a system is established, switching costs are very high for any one of the partners

(reducing flexibility and strategic control at the corporate level).

The blurring of company boundaries can cause problems in accountability, lines of

responsibility, and employee morale.

Resistance to sharing sensitive internal information between departments can reduce

the effectiveness of the software.

Q.3: Explain the applications and systems used in E-communication.

Application and systems used in E-communication

Answer:

Application and systems used in E-communication:

In e-business world, e-communication system is a backbone of all processes whose role is to

share information by messages or store information to be downloaded on access by the

customer. This is done through many applications and systems. Most popular and widely used

messaging systems are e-mail & voice-mail. Through these systems both parties communicate

on ongoing basis. It provides facilities to store delete and search mails, supporting the reference

need of the user. This system is popular when one to one communication is needed. When

there is a need for communication in real time, systems available are voice conferencing, Video

conferencing and electronic meeting. Voice conferencing is conducted on telephone network

using speaker phones or networked PCs with Internet telephone connectivity. Video

conferencing provides capabilities of video and audio for participants situated at different

locations. Video conferencing also becomes an interacting and effective communication system

when it has a feature of white boarding and document sharing.

In electronic meeting system, participants sit in meeting room with networked PCs and online

screen projector to discuss the meeting agenda. PC network is chosen for communication, and

accessing databases and processing and projecting them on the screen for common viewing.

This system is useful to solve some problems and communication within small groups.

E-communication systems are capable of sending messages, documents, and files in any format

over Internet. The communication could be online in offline mode and online in real time mode.

All e-communication systems have sufficient safeguards, which make them secure for use.

Internet and web technologies are used for forming different interest groups to communicate

and share the information. These groups are popularly known as 'user groups' who have

common interest in a subject, technology or tool, and come together with the objective of

improving the quality of the subject of interest by sharing the experience. Enterprise

information portal is another tool used for information posting and communicating to users or

customers. Portal is a web-based interface on an integrated internet / intranet / extranet

platform allowing customers to use applications and other services. It provides secure access to

all users and consumers to search for information analyze the situation and communicate. The

difference between a website and a portal is that the latter is a comprehensive multipurpose

repository of information, applications and tools to serve the consumers.

Q.4: There is an information explosion in today’s society. There are lot of advantages

of DBMS like proper maintenance of the data and maintaining security. Explain the

process of data transition using diagram and an example of your own.

Drawing the diagram

Explaining the process of data transition with an example

Explaining the process

Answer:

Process of data transitionData that has been processed is referred to as information. Information helps in analysis and decision making. It is observed that information is obtained from the data but not all data produce useful information. Information is useful when it is relevant, reliable, accurate, up-to-date, timely, complete, intelligent, consistent and convenient to the recipient. An information system is designed in a way to process data to a meaningful form, i.e., to accept input, manipulate it in some way and produce output. DBMS helps in gathering and providing reports. The set of data that is stored in row and columns to perform a specific task is referred to as DBMS.The main function of the information systems is to convert data into information. Figure depicts how data is converted into information using the intermediate processes. The information systems can perform its function only with the proper organization and structure to convert data into information. Data represents a fact or statement of event without relation to other things.

Fig. 1: The Process of Changing Data into Information (Organization structure

Figure below depicts the diagrammatic representation of data to information, to knowledge and to wisdom.

Fig. 2: Transition of Data to Information, Knowledge and Wisdom.

E.g.: It is raining.Here information embodies the understanding of a relationship of some sort,Like cause and effect.E.g.: The temperature dropped 15 degrees and then it started raining. Knowledge represents a pattern that connects and provides a high level of predictability as to what is described or what will happen next.E.g.: If the humidity is very high and the temperature drops substantially, the atmosphere will hold the moisture so it rains.Wisdom represents understanding of fundamental principles personified within the knowledge that is the basis for the knowledge being what it is. Wisdom is essentially systemic.E. g.: It rains because it rains. And this includes an understanding of all the interactions that happen between raining, evaporation, air currents, temperature gradients, changes and raining.

Q.5: There are two investment plans in the market whose details are given below

based on which you need to decide which investment plan you need to select. Suggest

which investment plan you prefer and why?

Particulars Plan A Plan B

Investment in Rs. Million 3 2.7

Savings/ gain per year in Rs. Million 1.0 0.75

No. of years savings or gain would occur 5 5

Discount Rate 12% 12%

Reasoning about the 2 plans

Writing 2 Formulae

Answering which plan is better

Calculations and correct answers

Answer:

Formulae:

In above investment analysis, the Net Present Value (NPV) is calculated and compared with all the investment alternatives.

NPV = (PV of further Cash flow) – Investment = PV – I

The formula used for the present value PV is:

Formula: PV= S[1-(1+i)-T ]/ I

Where T is a number of period, in which an amount S for each period is to be received and i is a discount rate.

Calculations:

For Plan A:

S = 1.0 i = 0.12 T = 5 I = 3

So after putting all the values in the above formula, we get:

PV = 1.0 [ 1- (1+0.12)-5 ]/ 0.12 = 3.605

Therefore, NPV = 3.605 – 3 = 0.605

For Plan B:

S= 0.75 i = 0.12 T = 5 I = 2.7

So after putting all the values in the above formula, we get:

PV = 0.75 [ 1- (1+0.12)-5 ] / 0.12 = 2.704

Therefore, NPV = 2.704 – 2.7 = 0.004

From the above data: since Plan A has more NPV we should select plan A. Plan A is a better investment plan because NPV of plan A is 0.605 which is more than plan B which is equal to 0.004.

Q.6: Write short notes on the following:

a) Transaction Processing System (TPS)

b) Knowledge Based System (KBS)

Concept of Transaction Processing System

Concept of Knowledge Based System

Answer:

Concept of Transaction Processing System:

The act of conducting or carrying out a deal or business agreement, an exchange or trade, as of

ideas, money etc. A transaction is the smallest unit of business activity, may be uses of records

are themselves transactions. Transactions are mainly observed at the bottom level of the

management. Plenty of operational activities at the bottom level result in one or more

transactions. Every transaction may be considered to generate information. The information

generated can be highly structured. Structured information is easy to process further. Examples

– payroll system, transport ticket reservation system, purchase order entry system, marks

tabulation systematic TPS offers the following characteristics. These characteristics are

responsible for the TPS to perform methodical, standardized and reliable transactions.

Reliability: TPS incorporate safeguard and disaster recovery methods tonsure

transaction security and also remain operational permanently.

Rapid processing: TPS process transactions very fast due to the virtual transaction

processing.

Standardization: To maximize efficiency of the transactions, TPS interfaces consider

identical data for every transaction, irrespective of the customer.

Concept of Knowledge Based System:

KBS are the systems based on knowledge base. Knowledge base is the database maintained for

knowledge management which provides the means for data collections, organization and

retrieval of knowledge. The knowledge management manages the domain where it creates and

enables an organization for adoption of insights and experiences.

There are two types of knowledge bases:

a. Machine readable knowledge bases: The knowledge base helps the computer to process

through. It makes the data in the computer readable code which makes the operator’s

performance easier. Such information is used by semantic web. Semantic web is a web that

makes

A. description of the system that a system can understand.

b. Human readable knowledge bases: They are designed to help people to retrieve knowledge.

The information needs to be processed by the reader. The reader can access the information

and synthesize his own.