ASSIGNMENT NO.

1
BUSINESS INFORMATION SYSTEM

PART A

INFORMATION SYSTEM
An information system is a combination of people, hardware, software, data resource, network
communication, policies and procedures that store, retrieve, transforms, and disseminate
information in an organization for the purpose of accurate and timely decision making. Now
day’s people rely on modern information system to store data using physical device (hardware)
and information processing instruction and procedures (software) and communication channels
to communicate with one another.

Major type of information system

The applications of information system in today’s business world are classified in different ways:

 STRATEGIC LEVEL SYSYTEM

 MANAGEMENT LEVEL SYSTEM
 OPERATION LEVEL SYSTEM

STRATEGIC LEVEL SYSTEM:

Also known as executive support system is used by the top level management i.e. C.E.O, Board
of directors. The executive summarizes all the historical information and the information from all
the other management level as well as the external data gathered from external sources to
develop strategic organizational goal, policies, objectives, and planning process. They also
monitor the performance of the organization strategically and its overall direction in the political,
economic, and competitive business environment. The decision taken here are tends to be more
unstructured meaning there are procedures to be followed and rules to guide the decision maker
for taking correct decision. The unstructured decisions are like in which business should be in
within 10 years

MANAGEMENT LEVEL SYSTEM:

This level is basically the integrated system as the information are gathered from up and down
and form various department of management level that are marketing, finance, production, H.R.
the information can be cross integrated between the various department of the company to make
decision. With the use of information system all the data become transparent and the manager
can know what is going on in the business and in other department also so that, the entire
department performs on the same page. The advantage of the management information system is
that it is time saving meaning the management can get the information daily and need not have to
wait for month or week to get the information. This level also includes DSS (Decision Support
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System). This system uses internal data and external data to take managerial decision. This
system helps in taking decision like what is the best way to for the H.R department to handle a
particular decision? How many workers are needed in the organization? Performance of the
employees and managers. The decision made at this level are tends to be semi- structured
meaning the procedures to be followed cannot be specified in advance in some situation for e.g.
which product line to be developed over the next five year?

OPERATION LEVEL SYSTEM:

Operation level includes transaction processing systems so as to record the day to day transaction
that take place in the company like buying and selling of raw material and products, time taken
to produce one product. The collected at this level are in detail each and every activity is feed
into the system like how much time a worker is spending in consuming tea or coffee. The
operating manager develop weekly or short range plan and the decision made by them are tends
to be more structured. Structured decision means which can be specified in advance and involves
a situation in which the procedures can be followed.

INFORMATION SYSTEM RESOURCES

Information system resource consists of 5 types of resources:

People resources: it is of two types End User and IS specialists. End users are those who use
this information system like customers, sales persons, engineers, clerks, managers and
accountants, found at different level of an organization. IS specialist are those who develop and
operate information systems such as system analyst, software developer, system operators and
other technical or mechanical personnel.

Hardware resource: it includes all the physical material and devices used in processing of the
information. This includes machines such as computers and other equipment and also all the data
media or any tangible object in which the data can be stored and recorded. Examples are
computer system and computer peripherals.

Software resources: it includes all set of information processing instructions known as

programs that direct and control computer hardware, also the set of information processing
instruction are called procedures. The examples of software resource are system software,
application software etc.

Data resources: data consists of numbers, letters, symbols, raw facts, figures which are
unprocessed. The managers and information system professional realize that the data constitute
valuable organization resources. The data are stored in the system which is then processed into
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meaningful information needed by the company’s CEO, manager for decision making process
and setting long term goal and objectives and policies and procedures.

Network resources: telecommunication technologies like internet, intranet and extranet are
essential for the successful operation in the business. Telecommunication network consist of
communication processors, computers and other devices inter connected by communication
media controlled by communication software. Network resource includes communication media,
network infrastructure like network operating system and internet browser packages.
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PART B
Today’s companies are realizing the need for information system and have become one of the
corporate assets that deliver the ongoing business value. Software is no longer only a tool to help
communicate and work better together, but has become a platform of information which
connects people and business processes to make an effective and accurate decision. Software
helps in empowering people from the infrastructure to the end user which helps in driving the
business forward. The Information system must be such that it supports the today as well as
tomorrow’s need of business. According to Mckinsey it was said that SBI will sooner be using
new technology as it was lagging its competitors in terms of technology and it has used also the
new technology. SBI has used new technology to manage their CASH SERVICE, from that time
the markets of the company has increased substantially to around 9 lakh as compared to the last
year which was 7 lakh. Earlier SBI used to do all the work manually, which used to take a lot of
time and it cost a lot to the company.

USE OF INFORMATION SYSTEM WITH REFERENCE TO PEOPLE:

People have become important ingredients for the successful operation of information system.
The people resource includes end user and the Information System specialists. In order to make
the software for managing the cash and to use that service there are two types of user:

END USERS:

They are also known as users or clients who use the information system to store data so as to
come out with meaningful information needed by the management to make appropriate and
effective decision. The end users can be a salesperson, customers, engineers, clerks, accountants,
managers at various level of an organization. The end users are mostly knowledge worker who
spend most of their time in collaborating in teams and communicating, creating, using
distributing the information. SBI has started using its own network of automated teller machines
and on the other hand with the use of internet develop their anytime anywhere banking services.

IS specialist:

They are the people who develop and operate information system. It includes system analysts,
system operators, system developers and other clerical, managerial and technical personnel. The
system analyst designs the information system on basis of the information required by the end
users. Software developer create computer program on the basis of the specification of system
analyst whereas system operators helps in monitoring and operating large computer networks
and system.

There are three levels in the organization and the IS is used in all the level
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 Lower level or operational level
 Middle level or knowledge level
 Top level or management level

OPERATION LEVEL:

At operation level the information system are used by the operating manager and self directed
team to store the data related to the operation that are taking place for e.g. how much raw-
material has been procured this month? How many workers are present on a particular date? Etc.
at the operational level data are just stored and retrieved and only those data are stored which are
relevant. The information extracted from the data collected and stored are used to make the
decision that are for the short period of time like weekly production schedule, weekly
maintenance of machine and its cost etc.

MIDDLE LEVEL OR TACTICAL MANAGEMENT:

The middle level consists of manager who uses the information stored in the information system
to take meaningful decision. The manager with the use of information system develops short and
medium range plan, schedules, and budget and specifies the policies, procedures and business
objectives for their subunits of the organization. Managers use the information system to access
the information of other department or to transfer the information intra departmentally so that the
entire department functions together on the same page. There are various departments in the
organization like production, H.R, finance and marketing and all the department are interrelated
to each other for e.g. production department will require the information from the marketing
department regarding the demand of the product from the market through market survey and
finance department require the information regarding the cost incurred in purchase and sales of
products and raw materials

TOP LEVEL MANAGEMENT OR STRATEGIC LEVEL:

The top level consists of board of directors, CEO and top executives who uses the information
extracted from the information system to make long term plan and develop long term strategy,
goals and objectives. They monitor the overall direction in the political, economic and
competitive business environment and strategic performance of the organization.
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USE OF INFORMATION SYSTEM WITH REFERENCE TO PROCESS

Process refers to a series or network of value added activities, performed by the their collaborator
or relevant roles, to successfully and purposefully achieve the organization goal. To any
organization these processes are very critical as they generate revenue and minimize the cost up
to a certain level. The information system facilitate in business effectiveness and efficiency while
striving for flexibility, innovation, and integration with technology. Information system helps in
improving the process continuously and can be described as process optimization process. The
information system process enables the organization to be more effective, more efficient, and
more capable of change than functionally focusing on traditional hierarchical management
approach. The fast process helps in gaining customer satisfaction, product quality or service
quality, delivery of speed and time to the market speed. The process is a strategic asset of an
organization that needs to be managed and improved for the purpose of delivering the value
added products and service to their clients.

The automaton of business processes with the use of information system

has been extended to integrate human driven processes in which the interaction of the human
takes place in parallel or series with the use of technology. For e.g. in the work flow systems the
human judgment or intuition are require to perform in the process of the system.

The processing of the business started as soon as the data are entered into the computer system.
The data are recorded and edited means the irrelevant data are deleted from the system. End user
directly entered the data into the computer system; the data are transferred into a machine
readable medium for e.g. magnetic disk until the processing started. For e.g. the data regarding
the purchase of raw material are recorded in the computer system. The data stored are then
processed such as calculating, comparing, sorting, classifying and summarizing so as to convert
them into meaningful information of the end user. The quality of data stored in the information
system must be corrected and updated continuously. The goal of the information system is to
provide appropriate information for the end user to make effective and accurate decision.
Information produce by the information system are in the form of message, reports, forms, and
graphic images. The processing enables the management to solve business problem and respond
to changing consumer, market, and regulate the demand faster than competitors so as to create
competitive advantage.

The processing of the business activities with the help of information system can be classified
into five categories:

DESIGN:

Process designing consists of identifying the existing process and designing of ‘to be’ processes.
The design represent the flow of process, the actor within it, escalation, alert and notifications,
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service level agreement, standard operating procedures and task hand over mechanism. The
process that are good design helps in reducing the problem over the lifetime. The aim is to ensure
that correct and efficient design is made for the processing. The improvement can be made in
human to human, human to system and system to system work flow and might also target the
demand, market and competitive challenges that can be faced by the businesses.

MODELING:

Modeling of the process takes into consideration the theoretical design and combination of
variables (such as changes in costs of material and rent, to determine the process that might
operate under different circumstances).

EXECUTION:

Executing an automated process require to develop and purchase an application which execute
all the steps of the process completely and accurately. Another approach that can be use is the
combination of software and intervention of human, however it become difficult to operate. So, a
software has been develop which help in processing which is defined in a computer language
that can directly executed by the computer. The system will use the service connected
application to perform business activities. Automating a process require flexible and
comprehensive infrastructure, implementing these system in a legacy IT environment.

MONITORING:

Monitoring means tracking the individual process so, that the information regarding the
performance of one or more processes can be provided. For e.g. tracking helps in determining the
state of customer order like ordered arrived, invoice paid and awaiting delivery, so that the
problem can be identified and corrected in the operation. The degree of monitoring depends upon
the information that the business wants to evaluate and analyzed and how it wants to be
monitored, in near real time or ad- hoc. Process mining refers to the collection of tools and
method related to process monitoring. The aim of the process mining is to analyze and compare
the events log extracted through process monitoring with the prior process model.

OPTIMIZATION:

This includes retrieving process performance information from modelling and monitoring phase
and further identifying the bottlenecks, opportunities available for cost saving; and the
improvement, applying them in the design of the process. This helps in creating greater business
value.

USE OF INFORMATION SYSTEM WITH REFERENCE TO

DATA
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Data are like raw material of information system and are consists of raw facts, figures, numbers,
alphabets, symbol, etc. Data constitute valuable information for the organization so the data
must be viewed as a resource that should be managed effectively to benefit all stake holders in
the organization. Data are stored, processed and analyzed using a sophisticated software
application that can help in revealing information relating to sales, customers, competitors and
markets which is very useful for the middle level management in taking decision, as well as to
the top level management in developing their long term goals and objectives, policies,
procedures etc. Data today does have become the lifeblood of organization so, the data must be
managed effectively and efficiently as it is considered as an integral part of the organizational
strategy. SBI has participated in NDS database Health check and after implementing this tool
SBI has saved its time from 40% to 65%. Further with the use of this technology the response
time and the performance has increased by 30%. The efficiency of the company has increased
with the use of this NDS technology where as all the staff has started working smoothly. SBI is
now able to monitor all its function efficiently with respect to the heterogeneous environment.
The return on investment has shown improvement as the time spent in diagnosing the
performance now take 5 five minutes but earlier without the use of this technology it used to take
30 minutes. It has increased the productivity of DBA staff. The benefits of using this technology
was that the problem related to database no more exist. The DBA use NDS to improve the
operation by offering functionality in the main location. Another tool used by SBI is QUESTION
APPLICATION MANAGEMENT TOOL which helps in increasing the team’s productivity and
helps on supporting the business requirement.