Management

Information Systems

Prof. Rathnakar Acharya

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Challenges

 Business in the information age must

compete in a challenging market place;
 It
is rapidly changing
 Complex
 Global
 Hyper competitive
 Customer focused
 “Business drives the technology
Technology drives the business”

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 Factors contributing the need for timely and accurate
information;
 Expanded market
 Wal-mart - vender managed inventor
 WISDOM
 Increased competition
 Shorter product life cycle
 Government regulation
 Increased cost pressure
 Canara Bank - iFlex

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Critical question to answer during information strategy
development;
1. What internal and external factors will affect the
future success of the organization?

2. What source of information are available to monitor

these factors?
3. How often should each of these factors be
monitored? Daily, weekly, monthly quarterly,
annually?
4. What for should report on these factors take?
Written, oral, statistical, graphic and on-line visit?
5. Who should receive these reports?

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 Business pressures
1. Global competition for trade and for labor
2. Need for real time operations
3. Changing workforce
4. Customer orientation
5. Technological innovation and obsolescence
6. Information overload
7. Social responsibility
8. Government regulation and deregulation
9. Ethical Issues

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 Organization responses:
1. Strategic systems
2. Customer focus and service
3. Continuous improvement efforts
4. Business process reengineering
5. Empowering employees and collaborative
work
6. Business alliances
7. E-Commerce

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 Capabilities of IS
 Provides fast and accurate transaction processing
 Provides large capacity, fast access storage

 Provides fast communication

 Reduce Information overload

 Provides support for decision making

 Provides a competitive weapon

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MIS-it is a system that access, organizes and
reports on organizational information, needed
for repetitive decision making in functional
areas, usually by middle managers.

 Provides information to the managers in

the functional areas.
 “MIS is the system which makes to
available the right information to the right
person, at the right place at the right time,
in the right form and at the right cost”.

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Need of MIS
 Decision making
 Strategic planning
 Management control
 Operational planning and control
 Competative advantages

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10
Role of MIS
 To provide the information to the managers in
the functional area.
 Required for the increased business complexity
 Qualitative decision making
 Making decision under uncertainty
 Proactive decision making
 Each MIS generates report in its functional area
 Routine scheduled reports
 Ad-hoc (demand) reports

 Exception reports

 Streamline the operations

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Misconception about MIS

1. MIS is a computer based information system

2. More data leads to effective decision making
3. Managers know their all information needs
4. Managers do not have to understand how MIS
works

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Strategic role of MIS
1. Precise development of strategic planning forecasting and
monitoring
2. Overall cost leadership and cost focus
3. Product differentiation
4. Focused differentiation
1. Becoming low cost producer
2. Creating new products and services
3. Focus on the market niche
4. Linking with customers and suppliers
5. Managing value chain
6. Creating strategic alliances

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 Functional sub-systems of MIS:
Marketing Sales forecasting, sales planning, customer and sales
analysis
Manufacturing Production planning and scheduling, cost control analysis

Logistic Planning and control of purchasing, inventories and

distribution
Personal Planning personal requirements

Finance & Accounting Financial analysis, cost analysis, capital requirement,

planning, income measurement
Information Processing IS planning, cost-effective analysis

Top Management Strategic planning, resource allocation

Transaction processing Processing of orders, shipments and receipts

Operational control Scheduling of activities and performance report

Management control Formulation of budgets and resource allocation

Strategic planning Formulation of objectives and strategic planning

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15
Functional Aspects

 MIS is an integrated collection of

functional information systems,
each supporting particular
functional areas.

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 Internet
Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

Accounting
Transaction Databases MIS Exception reports
processing of
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions Databases Human
of
Resources Etc.
external
data MIS
Extranet
Extranet
Etc.

MIS functional Units

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Porter-Millar Postulates
 It changes industry structure and, in doing so, alters the
rule of competitions

 It spawns whole new business, often form within the

company’s existing operations

 It creates competitive advantage by giving companies

new ways to out-perform their rivals.

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Change in industry structure
 Industry profitability is determined by five
competitive forces;
 The bargaining power of the customers
 The bargaining power of suppliers
 Threat of new entrants in the firms market
 Pressure form substitute products or services
 Positioning of traditional industry competitors.
 IT can alter each of the five competitive forces and
thereby help the firm gain competitive advantage.

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20
New ways of doing things
 Functional use
 Strategic use

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 Functional use:
 Lower the cost of value chain
 Facilitating the product delivery
 Adding values to the quality
 Improved product and service quality
 Reduce the defects
 Information transfer 60:40 – value addition
 Speed up the operation – minimize the lead time
 Help to simplify;
 Product
 Product process
 Production cycle time
 Helps in;
 Meet benchmarking standards
 Improve customer service
 Improve quality and precision of design and product

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 Strategic use;
 Gives organizations new ways to out-perform their rivals
 Deal with competitive forces; customer value
 Product differentiation
 Focused differentiation
 Developing right linkage to customers and suppliers
 Becoming a low-cost product (Dell’s – build on order)
 More precise development of strategies, planning,
forecasting and monitoring
 For problem solving and decision making
 Helps to improve organizational abilities to co-ordination
 Think Globally – Act Locally
 Used to acquire organizational flexibility

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 Develop response profiles;
 What will the competitors do in the future?
 What does the organization hold and
advantage over its competitors?
 How will this change the organizational
relationship with the competitors
 Answered by undertaking;
 –competitor analysis, or restoring competitive
Intelligence or B.I

Impact of IT
Business @the speed of thought 24
 IT capabilities and their organizational impacts

Capabilities Organizational impact/benefit

Transactional Transform unstructured process into routines
transactions
Geographical Independent of distance
Automational Reduce the human labour
Analytical Analytical method for a process
Informational Vast amount of detailed information
Sequential Sequence of tasks in process and then
simultaneously
Knowledge Capture and dissemination of knowledge
Tracking Detailed tracking of task status, input and
output
Dissemination Connect the parties-internally or externally
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Use of IT for competitive advantage
 Changing the balance of power between a firm and
its competitors in the Industry in the firm’s favor.
 Product or services - that has the most added

value to customers (Boeing)

 Each sub-system must operate within the overall

corporate goal/plan (policy)

 The contemporary approach of Information System

Development could be broadly categorized into:

 The technical approach
 The behavioral approach

 The socio-technical approach

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 Understanding a computer

 Computer system is a combination of;

 Hardware
 Software
 Data/information

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 Characteristics of computers: Components of a computer
 Automatic  CPU
 Speed  Input device
 Accuracy
 Output device
 Diligence
 Storage devices
 Versatility
 Physical media to link
 Reliability
various communication
 Storage
devices
 No feelings/no emotions/no
questions/ no intelligence

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Generations of computer

 First generation: (1946-56)

 Vacuum tubes
 More storage space
 ENIAC (Elelctronic Numercal Integrator and
Calculator)
 Vacuum tubes generate large amount of heat

 Consumes more power

 Storage: 2KB

 Speed: 10,000 instructions per sec.

 Language: Machine Language

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ENIAC

•containing over 17,000 vacuum tubes and over 500 miles of wires.
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 Second generation: (1957-63)
 Uses transistors
 Lesser storage space
 Less power consumption
 Longer life
 Reliable
 Faster
 Storage: 32KB
 Speed: 2,00,000 to 3,00,000 instructions per month
 Usage of magnetic core memory
 Languages used: ALGOL, COBOL, FORTRAN and SNOBOL
 Applications: Payroll, inventory, production planning,
marketing and accounting.

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 Third generation (1964-79)
 IC Chips
 Higher switching speed of transistors

 Memory expandable up to 2MB

 Speed: 5MIPS

 Increased CPU capability

 Time shared OS

 Integrated DBMS

 Application: dynamic production control system,

airline reservation system, interactive query
system

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Fourth Generation(1980 onwards)

 What we are using today

 Uses VLSI chips

 Over 2,00,000 to 2 million circuits per chip

 Size and power consumption reduces

 Memory size: 2GB

 Speed: 200MIPS

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 Forth generation of computers are
instrumental in:
 Making/possible or available extremely powerful
PCs at low cost
 Spreading computers from office to home

 Decentralization of computer organization

 Networked and distributed data processing

 Usage of graphic systems

 Providing impetus to CAD/CAM

 Ushering in the computer culture

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Fifth generation
 Use of parallel processing
 Use of Artificial intelligence

 Interactive mathematical models

 A blend of voice, image and massive data from

various devices
 Natural interface

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Computer categories
 Super computer
 Main frame computer

 Mini computer

 Micro computer

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Data communication and ITES

 Software functions:
 Manage the computer resource of the
organization
 Provide tools for human beings to take the
advantages of these resources
 Act as an intermediately between organization
and stored information

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 Software categories
 System software
 OS
 Process management; multiprogramming; time
sharing;multiprocessing; virtual memory; fault tolerance;
GUI
 Language translators
 Utility programs

 Communication software

 Application software

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40
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 Data organization or sequence;
 Bits
 Byte

 Character

 Fields

 Records

 Files

 Database

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 Data operations:
 Capturing
 Verifying

 Classifying

 Sorting/arranging

 Summarizing

 Calculating

 Storing

 Retrieving

 Reproducing

 Disseminating/communicating

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 Data processing steps;
 Data collection
 Data collation
 Data conversion
 Data written in documents
 Data in machine readable form
 Input unit
 Memory, CPU
 Processed data in internal form
 Output unit
 Data transformed to a readable form

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 Transaction processing:
 Transaction processing has relevance for the
following reasons:
 Information
 Action

 investigational

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 Data processing modes:
 Computers are used for the processing of data,
analyzing it and getting the necessary information for
facilitating decision making
 Batch processing
 On-line processing
 On-line real-time processing
 Distributed processing
 Other data processing modes:
 Time sharing
 Multi-programming
 Multi-processing

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 Data transmission
 Data communication, which consists of data
processing as well as data transmission generally
requires:
 Transmitter (source of information)

 Converter at transmitting end

 Transmission channel/carrier

 Converter at the receiving end

 Receiver (of transmitted information)

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 Transmission signal
 Analog
 Characteristics
 Amplitude
 Phase

 Frequency

 digital

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 Communication channels:
 Guided
 Twisted pair
 Coaxial
 optical
 Unguided
 IR
 LOS microware signals
 RF/wireless transmission (AM/FM)
 Satellite
 GEO
 MEO
 LEO

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 Characteristics of the communication channel:
 Transmission speed (baud rate)
 Bandwidth
 Transmission mode (synchronous/ asynchronous)
 Transmission direction
 Simplex; Half Duplex; full-Duplex
 Communication processors
 Front end processor
 Concentrators
 Multi-plexer
 Telecommunication software

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 Computer networks:
 Node
 Access path
 Access Point
 Protocol
 File server
 Network OS
 Gateways
 Routers
 Bridge
 Switch
 brouters

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 Network topologies
 Star
 tree
 Ring
 Bus
 Mesh
 Hybrid

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 Types of networks:
 WAN
 MAN (WiMAX)
 BBN
 LAN (WLAN – Wi Fi)
 PAN (Blue tooth)
 BAN
 VAN
 VPN

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Internet

 “A massive electronic and telecommunication

network connecting the computers of business,
consumers, government agencies, schools, and
other organizations worldwide, which exchanges
information seamlessly using open, non-
proprietary standards and protocols”
 Metcalf's law

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Evolution of the Internet
 1969 – ARPANET (Advanced Research
Project Agencies) from DoD
 Packet switching network
 The goal of the project were to allow
researchers to share computing resources
and exchange information regardless of their
location.

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 1980 – ARPANET split into – ARPANET and
Milnet.
 Worldwide UNIX communication network,
 USENET ( User’s Network),
 Computer Science Network ( CSNET)
 BITNET ( for academic and research communities)

 1986 – NSFNET- linked researchers across the

country with five supercomputer centers.

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Infrastructure of the Internet
 US government funding on internet
 Administrative processes such as standards
development and the DNS ( domain name
system), through contract with private
organizations that perform these functions.
 Infrastructure is supplied by network service
providers such as UUNET, MCI WorldCom
company, GTE Internetworking, and Sprint.
 ISP’s– Tier 1, Tier 2, and Tier 3
 Backbone providers

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Operation of Internet

 Set the rules used to send

and receive packets from
one machine to another
over the Internet - IP
 Switching techniques

 IP – operates at the seven

layer ISO – OSI model

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 To allow access to network
Application resources

To translate, encrypt and

compress data Presentation

To establish manage and

Session terminate sessions

To provide end to end Transport

message delivery

To move packets from

To organize bits into frames;
to provide node to node
delivery
Network source to destination;
provide internetworking
Data link
To transmit bits over a
medium: to provide
Physical mechanical and electrical
specifications
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DNS
The system administered Com – commercial
by Network Solution edu – educational
Inc.(NSI) to assign mil – military
names to each site on gov – government
the internet. net – network org.
org – org.
firm - business & firm
store – business offering goods for
purchase
info – information service provider
web – entities related to www

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Services provided by Internet
 Communication services
 Chatting
 E-mail  Instant messaging
 Usenet newsgroup (forums)  Internet Telephony
 Usenet Networking  Internet fax
 TelNet
 Streaming audio & video
 Gopher
 Archive
 Real-time audio and
 WAIS (wide area information video
service)
 WWW

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Information Retrieval Services

 File Transport Protocol (FTP)

 Enables user to access a remote computer and
retrive file from it.
 Archie
A tool that allows user to search the files at FTP sites.
It regularly monitors hundreds of FTP sites and
update a database on software documents and data
files available for downloading.

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 Gophers
 Most files and digital information that are
accessible through FTP are also available
through gopher.
 It is a computer client tool it enables user to
locate the information stored on Internet
gopher servers through a series of
hierarchical menus.

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Veronica ( Very Easy Rodent- Oriented Net-
wide Index to computer Archives)

 Provides the capability of

searching for text that
appears in gopher
menus.

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 WAIS – Wide area information Servers
 Allows the user to locate files around the
internet.
 Most thorough way to locate a specific file, but
it requires that users know the names of the
databases they want to search

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 Web Services;
 WWW – WWWW
 Retrieve, format
and display
information using
hypertext links

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 Handles all types of digital information
 1989 –Timothy Berners-Lee proposed global
network of hypertext documents
 Web is based on standard hyper text language-
HTML
 Which formats and incorporates dynamic
hypertext links to other documents stored on
some or different computers.

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 HTML was discovered form Standard
Generalized Markup Language – SGML
 Hypertext links
 Navigation
 Home page
 URL

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Internet Benefits
 Reducing communication cost
 Enhancing communication and coordination
 Accelerating the distribution of knowledge
 Improving customer service and satisfaction
 Facilitating marketing and sales

 Internet problems:
 Security
 Technological problem
 Lack of standards
 Legal issues
 The traditional internet culture
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Intranet

A private network that uses

Internet software and TCP/IP
protocols in essence a
private Internet or group of
private segments of the
public Internet network.

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Building Intranets
 To build an intranet, a company needs:
 Web servers
 Browsers
 Web publishing tools
 Back-end databases
 TCP/IP networks (LAN or WAN)
 Firewalls

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Architecture of an Intranet

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 Intranet Functionalities

 Intranet functionalities
 Web-based database access for ease of use
 Search engines, indexing engines, directories
assisted by keyword search
 Interactive communication—chatting, audio support,
videoconferencing
 Document distribution and workflow

 Groupware

 Conduit for computer-based telephony system

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 Intranet application areas
 Search and access to
documents
 Personalized information
 Enhanced knowledge
sharing
 Individual decision
making
 Software distribution
 Document management
 Project management
 Training
 Enhanced transaction
processing
 Paperless information
delivery
 Employees control their
own information
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An Extranet

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ISDN – Integrated service Digital Network
 International standard for transmitting voice
data, image and video to support a wide range
of services over the Public telephone network
 Developed by CCITT standard
 ISDN is digital; flexible; economy; lower power
consumption and easy maintainability
 Basic rate and primary rate

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ITES
 Involves the offering of services from remote
locations
 ITES based on web enabled services – using
telecom and data networks
 BPO – ITES
 The transfer of ownership of the process to the
service providers
 Control is exercised by defining very clear SLA

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ITES services
 Animation
 BPO/Management
 Back office operation
 Collection service
 Customer care/interaction service
 Data organization
 Digital content development
 Legal database
 Market research
 E-Learning
 Transcription and translation service
 Website services
 GIS

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 GIS Applications:
 Advertising
 Archeology
 Education
 Cartography (map making)
 Election administration
 Insurance
 Routing/distribution network
 Oil/gas/mineral exploration
 Wilde life
 Government agencies
 Transportation and logistics
 Urban and regional planning
 Emergency response planning

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Constraints of ITES

1. Relatively poor quality infrastructure

2. DoT regulations hampering
sufficient/unrestricted inter-connectivity
3. Non-granting of industry status
4. Insufficient regulations in the area of data
protection security
5. Undue emphasis on financial services

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Management and Decision making

 Management is a process by which goals are

achieved through the use of resources
 People, money, materials, space, time
 Appropriate use of resources require managers
to make decisions in planning, organizing
staffing and control.
 These resources are considered as inputs and the
attainment of the goals is know as output.
 Ratio between the two indicates the productivity

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Decision making
 Decision is a choice out of several options made by the
decision maker to achieve some objective in a given
situation.
 Decisions made at different levels
 Characteristics of decision making;
 Sequential nature
 Exceedingly complex due to risk and trade offs
 Influenced by personal values
 Made in institutional settings and business environment context

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Decision making environment
 Ambiguity,certainty, uncertainty, and risk
 Decision types:
 Programmed decisions
 Non-programmed decisions

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 Programmed decisions:
 Routine/structured

 Repetitive/short term
 Definite procedure is to be followed

 There are certain norms

 Situations are known

 Taken at the lower/operational level of the

org.

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 Techniques used for making programmed
decisions;
 Habit
 SOP
 DOP
 Org. hierarchy or structure
 OR
 IT

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 Non-programmed decisions;
 Innovative
 New/complex situations
 important and critical
 Strategic
 Long term

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 Techniques used for taking non-programmed decisions;
 Judgment

 Intuition

 Business intelligence

 Creativity

 Complex/specifically designed computer programs

 Training the executives

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Decision making process
 Determine the existing problems and/or
opportunities
 Generate alternative course of action

 Analyze/choose/select a course of action

 Implement the course of action

 Monitor, follow-up and initiate course-

corrective action

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Support for Various Decision-Making Levels

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Decision Support System (DSS)

 Managers primary function is decision making

 Decision makers must have data information and
knowledge
 The quality of these decisions are consequently the
welfare of the organization
 Many organizations describes themselves as information
corporations
 Web technologies and digitization are increasing the
creation, dissemination, storage and use of information
for decision makers.

91
 Serve the management level of the org.
 Helps managers to make decisions that are
unique, rapidly changing and not easily specified in
advance.
 DSS uses internal information from TPS and MIS
and also from external sources – current stock
price or product price of the competitors.
 Designing it requires analytical power than
other systems
 Built explicitly with a variety of models to
analyze data

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 DSS
 Definition:
 “A computer based
information system that
combines models and
data to provide support for
decision makers in solving
semi-structured or
 Management level
interdependent problems
 Inputs: Low volume data
with extensive user
involvement”.
 Processing: Interactive
 Outputs: Decision analysis
 Users: Professionals, staff
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 How IT supports in decision making?
 Includes K.M, DSS, Data warehousing,
Business Intelligence, Data Mining, and
electronic document management.
 The resources considered for decision
making is known as input, attainment of the
managers goal is output.
 Managers success is based on the ratio of
inputs and outputs – Productivity

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 Manager has to do many roles:
1. Interpersonal roles – figurehead, leader,
liaison
2. Informational roles – monitor disseminator,
spokes person
3. Decisional roles – entrepreneur, disturbance
handler, resource allocator, navigator

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Characteristics of DSS
1. It is designed and run by managers
2. It contains a database drawn from internal files and external
environment
3. It focuses on decision processes rather than on transaction
processing
4. It permits managers to test the probable result of alternative
decisions
5. It supports decision making usually in solving semi-structured
complex problems
6. It helps in refining managerial judgment applied to problem
solving
7. It improves managerial decision and their by managers
effectiveness
8. The decision maker retains control over decisions through out
the decision process

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Decision making tools
 Pay of matrix
 Decision tree
 Queuing model
 Distribution model
 Inventory model
 Game theory

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 Decision making models:
 Classical model
 Collect all the information
 Administrative model
 Make the decision in the best interest of the Manager
 Herbert Simon model

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 When making decision, the decision maker typically goes
through a fairly systematic process;

Intelligence

Design

Choice
Herbert Simon’s Decision
model

implementation

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 Intelligence Phase:
 Where reality is examined and problem is defined
 Organizational objectives
 Search and scanning procedures
 Data collection
 Problem identification
 Problem classification
 Problem statement
 Objectives

100
 Design phase:
A model or simplified representation of reality
 Formulate a model
 Set criteria for choice

 Search for alternatives

 Predict and measure outcomes

101
 Choice phase:
 Involves the selection of best solution
 Solution of the model
 Sensitivity analysis

 Selection of the best alternative

 Plan for implementation

 Design of a control system

102
 Implementation:
 Successful implementation results in resolving
the original problem

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MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Decision-Making Process

104
 Components of DSS:
1. DSS Database
2. Model Base
3. DSS software system
4. Hardware
5. The user interface
6. The analysis tools

105
 DSS database:
A collection of current or historical data from a
number of applications or groups.
 Easily accessible
 Precision

 Accurate

106
 Model driven DSS:
 Primarily stand alone system that uses some
type of model to perform what if and other
kind of analysis.
 Model is a simplified representation of reality
 Simplification is required, because the reality is too

complex to copy exactly

107
108
 Behavioral Model – for understanding the
behavior/trends amongst the variables
 Trend analysis, Forecasting, co-relation,
regression
 Management Science Model – developed
based on the principles of management,
management Accounting and Economics
 Inventory management, Cost accounting, Capital budgeting

109
 OR models – mathematical models,
represents real life problems
 Linear model
 ABC Analysis

 Material Requirement Planning (MRP)

110
111
 Iconic (Scale) model:
 Physical replica of the system
 Based on a different scale from the original

 Iconic models may be 2D or 3D

 2D – photographs

 3D – models of car, bridges, airplane, production

line

112
 Analog model:
 Does not look like real system but behaves like it
 It could be a physical model, but the shape of the

model differ from that of the actual system

 Ex: - organizational chart, blue print of the machine

or building

113
 Mathematical (QT) Model:
 Most DSS analysis is executed numerically using
mathematical, statistical, financial, or other QT
models

114
 Mental model:
 People frequently use a behavioral mental model
 Mental model presents a description of how a person thinks
about a situation
 It includes – beliefs, assumptions, relationships and flow of
work as perceived by the individual
 Mental model determines the information we use and the
manner in which people interpret information
 Developing mental model is the first step in decision making

115
 Data driven DSS:
 Helps in generating useful information's from
huge quantity of data in organizational
databases, data warehouses and websites
 Data from TPS, OLAP and data mining
 Mines customers data from the web site
 Data from the enterprise system

116
DECISION-SUPPORT SYSTEMS (DSS)

• Components

•Data management
• user interface
• model management
•Knowledge management

117
DSS Applications in different Management
levels

 DSS for operational Management:

 For day-to-day operations
 Material requirement planning
 Linear programming

 Queuing theory

 Analysis of variances

 Correlation analysis

 Descriptive statistics like mean median etc.

118
 DSS for tactical planning and
Management control:
 Regression analysis
 Correlation analysis

 Factor analysis

 Multidimensional scaling

 Game theory

 Non-linear programming

 Network analysis

119
 DSS tools for strategic planning:
 Expert systems
 Natural language systems

120
 Some of the major capabilities are;
1. What if analysis
2. Sensitivity analysis
3. Risk analysis
4. Goal seeking analysis
5. Exception reporting analysis

121
 What if analysis:
 When a model is solved the results depends
on the assumptions, which are frequently
subjective made by one or more peoples.
 What if analysis attempt check the impact of a

change in the assumptions (input data) on the

proposed solutions.
 Ex: what will happen if the total inventory cost
if the originally assumed cost of the carrying
inventories is not 10% but 12%.

122
 Sensitivity analysis:
 Is the investigation of the effect that changes if
one or more parts of a model have on other
parts of the model.
 Variation in input results in the variation in the output.
 A sensitive model means that small changes in
conditions dictates a significant different
solution.
 The chances for a particular solution to succeed
are very high in non-sensitive model
 Two types of sensitivity analysis are:
1. What if
2. Goal seeking analysis
123
 Goal seeking analysis:
 Represents “backward” solution approach
 It attempts to find the value of the inputs necessary

to achieve a desired level of output

124
 Risk analysis:
 To assess the risk involved
 Probability of risk

125
 Exception reporting analysis:
 Tracks exceptions like;
 over due accounts
 Production runs that results in more power consumption
than estimated
 Sales man who could not meet sales target

126
Factors influencing success and failure in DSS

1. User training and involvement

2. User experience
3. Familiarity (length of use)
4. Top management support
5. Orientation towards the top management
6. Novelty of applications
7. ROI

127
Comparison between MIS & DSS
MIS
Structured task
Identifies the information
requirement
Data storage
Indirect access to data
Based on computer experts
Cannot be used for decision
making
Emphasis on efficiency
DSS
Semi/unstructured task
Establishes tools to be used
for decision process
Data manipulation
Direct access to data
Based on managerial
judgment
Used for decision making
Emphasis is on effectiveness
128
Types of DSS

1. Status enquiry system

2. Data analysis system
3. Information analysis system
4. Accounting system
5. Model based system

129
Decisions and type of system required
Decision Type of system required

Selection of vendor Inquiry system

Procurement Inquiry system

Pricing Data analysis

Selection of vendor based on price, Information analysis

quality, performance
Selection of capital asset ROI analysis system

Inventory rationalization Valuation of inventory and

accounting system
Management of inventory within various Inventory optimization
financial and stocking constraints model
130
GDSS
 “An interactive computer based system that
facilitates the solution of the semi-structured and
unstructured problems by a group of decision
makers, either by speeding up the decision
making processor or by improving the quality of
the resulting decisions or both”.

131
 Features of GDSS:
 Anonymous inputs without identifying the source of
inputs to enable group decision makers to
concentrate on the merits of the input without
considering who give it.
 Parallel communication to enable every group
members to address issues or make comments
suggestions simultaneously.
 Automated record keeping by anonymously
recording each comment that is entered into the PC
by the group member for further review and
analysis.

132
 Success factors of GDSS:
 Depends upon the quality of meeting, effective and efficient
use of time and ability of the group members.
 Improved preplanning
 Increased participation
 Open, collaborative meetings atmosphere
 Criticism-free idea generation
 Idea organization and evaluation
 Setting priorities and making decisions accordingly
 Documentation/record keeping of meetings
 Access to external information, if and when required
 Preservation of organization memory

133
Executive Support System (ESS or EIS)

 “Information system that

provides top executives with
rapid access to timely
information and direct access
to management reports,
especially exception reports
drill down reports”.

134
Internal and external factors for EIS

 Internal factors  External factor:

 Need for timely  Increasing and
information intensifying global
 Need for improved competition
communication
 Rapidly changing
 Need for access to
operational data business environment
 Need for corporate  Need to be more
database proactive
 Identification of historical  Increasing government
trends
regulation

135
EIS characteristics

 Informational characteristics
 Flexibility and ease of use
 Timely information

 Produce correct, validated and relevant information

 User-interface characteristics
 User friendly system – GUI
 Access from many places

 Provides secure, reliable and confidential access

 customized

136
 Managerial characteristics
 Provides support for defining the overall vision,
mission and strategy – strategic or futuristic
oriented
 Can help with higher degree risk

 Linked with value added business process

 Support the need for the access of external

database
 Performance oriented

137
Capabilities of ESS

 Capabilities and benefits:

 Drilldown – provides details behind any given
information
 Critical success factors and key performance
indicators (KPI)
 Status access
 Trend analysis
 Ad hoc analysis
 Exception reporting

138
Office Automation System (OAS)

 It is an information system, collect, process, store and

transmit electronic message, document and other forms
of communications among the individuals, workgroups
and organization.
 Increases the productivity of managerial end users
 Office publishing system – word processing, DTP
 Image processing system- document management and
interactive video
 Electronic communication systems – electronic meeting,
teleconferencing

139
 Other publishing systems:
 Word processing system
 Desktop publishing
 Electronic Meeting System (EMS)-IP telephony
 Teleconferencing
 Telecommuting
 Multimedia

140
Enterprises Resource Planning (ERP)

 An integrated process of planning and

managing all major business process with
a strategic client/server architecture in real
time including contacts with business
partners and with customers.

141
 Old Dream of Total Integration
 Unification of all key operational systems
 Integration is Geographic (multiple sites in USA, Europe & Asia
for many large firms)
 Functional, with modules for
 Logistics
 Financial
 Human Resources
 And more specialized areas, such as SCM, CRM

142
 Major Suppliers
 SAP
 Oracle
 J.D Edwards
 PeopleSoft
 Siebel Systems

143
SAP Today
 Biggest ERP supplier
 55% global share, and rising fast
 One of world’s most successful software firms
 Huge web of connections
 More than 1,000 “partners”
 More than 12,000 customers
 More than 10 million licensed users
 22 versions tailored to specific industries
 Web offering called “mySAP.com”
 1979: SAP /R2 for mainframes
 1992: SAP /R3

144
Benefit: Operational Efficiency
 Lower cost
 Data entered only once, used by all processes and
departments
 Better customer service
 Current data accessible to all participants
 E.g. customer service rep can see stock levels in other divisions,
progress on order.
 Allows management of processes across organizational
boundaries

145
CRM Software

 Customer Relationship Management

 Idea: centralize all processes and data related to
interaction with customers
 Often offered by ERP suppliers

146
Expert Systems

 “An expert system is a computer

program that is designed to hold
the accumulated knowledge of one
or more domain experts”

147
Capabilities of ES

 Capturing expertise's
 Codifying the expertise's
 Duplicating and transferring expertise's
 Saving the human experts time
 Saving on maintenance and updating of
knowledge base

148
Characteristics of ES

 Ability to explain reasoning or suggested

decision
 Ability to display intelligent behavior
 Ability to draw conclusion
 Ability to deal with certainty
 Limited to relatively narrow problems
 Inability to deal with mixed knowledge
 Difficult to maintain
149
Applications of Expert Systems

Medical system
for diagnosis of
respiratory conditions

PROSPECTOR:
Used by geologists
to identify sites for
drilling or mining
150
Applications of Expert Systems
MYCIN:
Medical system for
diagnosing blood disorders.
First used in 1979

DESIGN ADVISOR:
Gives advice to
designers of
processor chips

151
Applications of Expert Systems
DENDRAL: Used to
identify the structure of
chemical compounds.
First used in 1965

LITHIAN: Gives advice

to archaeologists
examining stone tools
152
Components of an Expert System

 The knowledge base is the collection of facts

and rules which describe all the knowledge
about the problem domain
 The inference engine is the part of the
system that chooses which facts and rules to
apply when trying to solve the user’s query
 The user interface is the part of the system
which takes in the user’s query in a readable
form and passes it to the inference engine. It
then displays the results to the user.
153
154
Why use Expert Systems?
 Experts are not always
available. An expert system can
be used anywhere, any time.
 Human experts are not 100%
reliable or consistent
 Experts may not be good at
explaining decisions
 Cost effective
 ES increases productivity in
Automobile

155
Problems with Expert Systems

 Limited domain
 Systems are not always
up to date, and don’t learn
 No “common sense”
 Experts needed to setup
and maintain system

156
Knowledge Engineers
 Tasked with working with the expert to
extract expertise and codify in a set of rules.
 Has training in the development of expert
systems, but not necessarily in the
application domain.
 Know the capabilities of the technology and
knows how to apply it.
 Autonomic computing

157
Artificial Intelligence

 “The study of thought process of human

and representation of those process via
machines”
 Three objectives of AI:
 Make the machine smarter
 To understand what intelligence is

 To make the machine more useful

158
 What is an intelligence behavior?
 Learning or understanding from experience
 Making sense of ambiguous or contradictory messages
 Responding quickly and successfully to a new situation
 Using reasoning to solve problems and direct actions
effectively
 Dealing with complex situations
 Understanding and inferring in ordinary, rational ways
 Apply knowledge to manipulate the environment
 Recognizing the relative improvement of different elements in
a situation

159
 Comparing AI with NI:
 AI is more permanent
 AI can be less expensive
 AI is consistent and thorough
 AI can be documented
 AI offers ease of duplication and dissemination
 NI is creative
 NI enables peoples to benefit from and directly use sensor
experiences
 NI enables people to recognize relationships between things to
sense qualities and spot patterns that explain how various items
interrelate.
 Human reasoning is making use of wide context of experience

160
 Commercial AI systems:
 Expert systems
 Natural language technology
 Speech (voice) understanding
 Robotic and sensory systems
 Computer vision and science recognition
 Intelligent compute assisted instruction
 Machine learning
 Handwriting recognition
 Intelligent agents

161
 AI applications;
 Manufacturing/production planning and schedule
 Project management
 Factory management
 Sales, distribution and field services
 Diagnosis and trouble shooting
 Financial management
 Portfolio management
 Asset and liability management
 Criminology
 geology
 Nuclear science

162
System Analysis and Design
 Types of systems:
 Conceptual and empirical systems
 Theoretical,explanatory and provides clarifications
 Natural and artificial systems
 Rivers, mountains,minerals
 Open and closed systems
 Always interacting with the environment and exchanges
information
 Probabilistic and deterministic systems
 In a deterministic system the interaction of elements is
known and hence the outcome predictable

163
 Other systems are;
 Social and machine system
 Physical and abstract system

 Permanent and temporary system

 Stationary and non-stationary system

 All systems must have:

 Goals, components/sub-systems, structure, behavior, life
cycle, boundaries

164
 System characteristics:
 System receives inputs by way of information,
energy or materials
 System process the inputs and produces/gives

output/results
 System has a structure –organized in a particular

way
 System interdependent

165
 What is control?
 “The process by which manager assures that
resources are obtained and used effectively in the
accomplishment of an organization’s objectives”
 It is one of the major functions of management

along with planning, organizing, directing and

leading.

166
 Control systems
 Closed
 Open loop system

 Cybernetic system (communication)

167
 Control may result;
 Performance of group/individuals

 Characteristics of group/individuals

 Characteristics or value of a variable within

prescribed limit.

 Control will be;

 Setting standards of performance
 Measuring performance against standard

 Taking corrective action to reduce deviation from

standards

168
  Control cycle;
1.Determine
goals

8.compare goals achieved

2. Plan
with the goals desired

7.Compare actual and

budgeted performance Control process cycle 3. Determine
the work load

6. Perform work 4. Find the required

resources

5.acquire the authority

to use resources 169
170
 Law of requisite variety
 Murphy’s law – “if things can go wrong it will
go wrong and it will go wrong at the time you
least expect it to go wrong”
 System theory has an appropriate mechanism to
ensure that their malfunctioning is detected and
also corrected

171
SDLC
 SDLC stands for
 Systems Development Life Cycle
 SDLC - refers to the development stage of the system’s life
cycle.
 Allsystems have a life cycle or a series of stages they
naturally undergo. 
 The number and name of the stages varies, but

the primary stages are conception, development,

maturity and decline.

172
 Basic concept of system development
 The definition stage
 The development stage
 The installation and operation stage
 System analysis
 System design
 Programming

 Testing

 conversion

 Implementation

 Maintenance (starting Maturity)

 System Implementation

173
 The definition stage;
 Proposal definition (SRS)
 Feasibility assessment
 Technical
 Economical

 Operational

 Motivational

 schedule

174
 Information requirement analysis
 Input and output data for report
 Functional requirements

 User interface requirements

 Conceptual design
 Documenting flow of activities and processing
 General description/concepts on inputs/output

 Functions expected to be performed

 General outlines and regards different manuals

(operating/users/training)
 Follow up/audit/control procedures

175
 Development stage:

 Physical system design

 Physical database design
 Program development
 Procedure development (user
manual/deliverbles)

176
 Installation and operation stage
 Conversion
 Parallel
 Direct

 Pilot

 phased

 Operation and maintenance

 Post audit

177
 System analysis:
 Complete understandings of important business
activities
 Understanding the user requirements

178
 System design:
 To ensure that the system meets organizational objectives promotes
integration of activities and facilitate control as the emphasis in system
design.
 Major activities:
 Specify data element, records and files
 Specify input performance and data preparation formats
 Specify system output
 Develop feedback and control mechanism
 Develop program specification
 Develop operation specification
 Identify personnel who will complete these activities
 Plan the resources
 Schedule:
 Switch over to new system
 User training
 Parallel operation
 System review

179
 A good system design should posses the
six important characteristics:
 Acceptability
 Decision facilitating ability

 Economy

 Flexibility

 Reliability

 Simplicity

180
Phases of the Systems Development Life Cycle

1. Project Identification and Selection

 Two Main Activities
 Identification of need
 Prioritization and translation of need into a development schedule
 Helps organization to determine whether or not resources
should be dedicated to a project.
2. Project Initiation and Planning
 Two Activities
 Formal preliminary investigation of the problem at hand
 Presentation of reasons why system should or should not be
developed by the organization

181
Alternative Approaches

 Prototyping
 Building a scaled-down working version of the system
 Steps in prototyping:
1. Identify the user basic requirements
2. Develop the initial working prototype

3. Use the prototype for further refinement

4. Review and enhance prototype

Approaches to developing prototype systems:

a. non-functional prototype systems
b. partially functional prototype system
c. fully functional prototype system

182
 Advantages:
 Users are involved in design
 Captures requirements in concrete form
 Ability to try out ideas without incurring large/huge cost
 The ability to get a functioning system into the hand of the
user quickly
 Reduced application development time to achieve a
functional system
 Effective utilization of scare resources
 It can help reduce maintenance
 Most useful when there is uncertainties
 It enables user to react immediately
 Minimizes the development cost

183
 Limitations:
 Better suited for small modular applications
 Performance may be rather inefficient

184
Approaches to developing prototype systems

 Non- functional prototype systems

 User interface
 Data entry display
 System output
 Partially functional prototype systems
 Operational level
 Fully functional prototype systems
 To see the expected result

185
CASE tools

 Computer Aided Software Engineering

 Using software packages to accomplish and
automate many of the IS development work
 Promote standardization
 Amount of the repetitive work can be reduced
 planning
 Design (system design, database design)
 Programming (coding)
 integration
 Testing
 Documentation

186
Object oriented system Development
 Approaches of system development
 Top-down, structured, procedure oriented, bottom
to-up, modular, object oriented.
 Procedure oriented
 Sequence of actions
 Reading

 Calculating

 printing

187
 Characteristics of procedure oriented
 Emphasis on algorithms
 Division of large program into smaller
programs known as functions
 Data moves between function to function
 Top-down approach in program design

188
 OOP approach:
 Emphasis on data rather than procedure
 Programs divided into objects
 Data is hidden and cannot be accessed by
external functions
 Object can communicate each other
 Bottom-to-up approach

189
 OOPs concepts:
 Objects
 Classes
 Data abstraction and encapsulation
 Inheritance
 Polymorphism
 Dynamic binding
 Message passing

190
OOSD advantages
 System development is mainly modular
 System design and development becomes
easier
 System maintenance is simpler
 System objects can be modified by less
disrupting to rest of the program
 Program security is much higher

191
Database management systems

 File management system

 Database management system

192
 Database is a huge repository for structured data
 Data are retrieved form database for processing
them into Information.
 Series of operations – to generate Information
 Types of operations;
1. Aggregation
2. Summation
3. Calculation

193
 Nature of the data;
 Text
 Image

 Audio

 Video

 Animation

194
Characteristics of DBMS

 Shared
 Persistence
 Validity/integrity/correctness
 Security
 Non-redundancy
 Independence

195
 DBMS components:
 Transactionmanagement
 Concurrency control
 Recovery management
 Security management
 Language interface
 Storage management
 Database catalog management

196
DBMS
 Components of DBMS:
Data Model
Data Definition Language
Data Manipulation Language
Data Dictionary

197
 Data Model
 Defines the way data are conceptually
structured.
 Ex.
 Hierarchical

 Network

 relational

198
 Data Definition Language:
 Defines what types of information are there in
the database and how they will be structured
 DDL defines each data element as it appears
in the database before that data element is
translated into the form required by the
applications.
 It defines the logical and physical view of the
database

199
 Data Manipulation language:
 DML allows user to store, retrieve, sort,
display and delete the contents of a database.

200
 Data Dictionary:
 Stored definition of the data elements and
data characteristics such as individuals,
business functions, programs and reports,
that uses data elements as well as physical
representation, responsible parties in the
organization ( Data Ownership) and security.

201
 Advantages of DBMS to the organization:
 Improved strategic use of corporate data
 Reduced complexity of the organization's information system
environment
 Reduced data redundancy and inconsistency
 Enhanced data integrity
 Application data independence
 Improved security
 Reduced application development and maintenance cost
 Improved flexibility of information system
 Increased access and availability of data and information

202
 Disadvantages of Database:
 Higher data processing cost
 Increased Hardware and software cost
 Data insecurity and integrity
 Insufficient database expertise.

203
Data warehousing and data mining

204
Information Security

 Why to break IT systems?

 Revenge
 Money
 The challenge of doing it.

205
 External threats
 Internet connection
 Remote access

 Telecommuting
 firewalls
 Internal threats
 Un- authorised access

206
 Routine maintenance
 Software updates
 Audit trails

207
Information system Quality

 Software used for research and military

applications
 RTT
 Software QA provides the degree of
confidence

208
 Need for software quality assurance
 Avoidinglegal liability if the software fails
 Documents for best practice quality technique
 Marketing the software products
 Making software development cost effective
 Customer satisfaction; delight and customer loyalty

209
Software quality criteria
Quality factor Software quality criteria
correctness Traceability, constancy, completeness
Reliability Error tolerance, consistence, accuracy
Efficiency Execution efficiency, storage efficiency
Integrity Access control, access audit
Usability Operability, training,
communicativeness, I/O
Maintainability Simplicity, modularity, self descriptive
Portability Machine independent, system
independence

210
THANK YOU

211