Evolution of Information System :
The first business application of computers
(in the mid- 1950s) performed repetitive,
high-volume, transaction-computing tasks.
The computers” crunched numbers”
summarizing and organizing transactions
and data in the accounting, finance, and
human resources areas. Such systems
are generally called transaction processing
systems (TPSs)
Intelligent Support System (ISSs): Include expert
systems which provide the stored knowledge of
experts to nonexperts, and a new type of
intelligent system with machine- learning
capabilities that can learn from historical cases.
Knowledge Management Systems: Support the
creating, gathering, organizing, integrating and
disseminating of organizational knowledge.
Data Warehousing: A data warehouse is a
database designed to support DSS, ESS and
other analytical and end-user activities.
Mobile Computing: Information systems that
support employees who are working with
customers or business partners outside the
physical boundaries of their company; can be
done over wire or wireless networks.
Decision Support Systems (DSS):
Computer-based information systems that
combine models and data in an attempt to
solve semi-structured and some
unstructured problems with extensive user
involvement.
DSS Characteristics & Capabilities:
Sensitivity analysis. The study of the impact that
changes in one (or more) parts of a model have on other
parts.
What-if analysis. The study of the impact of a change in
the assumptions (input data) on the proposed solution.
Goal-seeking analysis. Study that attempts to find the
value of the inputs necessary to achieve a desired level of output.
DSS Structure and Components:
•Data management subsystem
•Model management subsystem
•User interface
•Users
•Knowledge-based subsystems
•DSS Computing Environment.
Emerging Types of DSS :
Frontline decision making. The process by
which companies automate the decision
processes and push them down into the
organization and sometimes out to
partners.
Real-Time Decision Support. The systems
that supports business decisions that must
be made at the right time and frequently
under time pressure.
Group Decision Support Systems:
Virtual group. A group whose members
are in different locations.
Group decision support system (GDSS).
An interactive computer-based system that
supports the process of finding solutions
by a group of decision makers.
Decision room. A face-to-face setting for a
group DSS, in which terminals are
available to the participants.
Executive Support Systems:
Organizational decision support system
(ODSS): A DSS that focuses on an
organizational task or activity involving a
sequence of operations and decision
makers.
Executive information system (EIS): A
computer-based technology designed in
response to the specific needs of
executive support system (ESS).
The Capabilities of an ESS.
Expert Systems (ES):
A computer system that attempts to mimic
human experts by applying reasoning
methodologies or knowledge in a specific
domain.
Expertise and knowledge
Expertise is the extensive, task-specific knowledge
acquired from training, reading and experience. The
transfer of expertise from an expert to computer and
then to the user involves four activities:
Knowledge acquisition: Knowledge is from experts or from
documented sources.
Knowledge representation: Acquired knowledge is
organized as rules or frames (objective-oriented) and
stored electronically in a knowledge base.
Knowledge inferencing: Given the necessary expertise
stored in the knowledge base, the computer is
programmed so that it can make inferences. The
reasoning function is performed in a component called the
inference engine, which is the brain of ES.
Knowledge transfer: The inferred expertise is transferred
to the user in the form of a recommendation.
Expert Systems Components
:
•Knowledge base
•Inference engine
•User interface
•Blackboard
•Explanation •subsystem
MIS AS A TECHNIQUE OF PROGRAMMED DECISIONS:
A programmed decision is used to solve routine, repetitive but complex problems. These techniques are also called as Quantitative Techniques. The managers working at lower-level of managementmake these decisions.
Various Approaches or Techniques for making programmed decisions are:-
1. Linear Programming
Linear Programming is a quantitative technique. It is used to decide how to distribute the limited resources for achieving the objectives. Here, linear, means the relationship between variables, and programming means taking decisions systematically. Linear programming is used when two or more activities are competing for limited resources. For e.g. product mix decisions, inventory management decisions, etc. Linear programing is used for Agriculture, Industry, Contract biding and Evaluation of tenders.
2. Decision Tree
A decision tree is a diagram which shows all the possible alternatives of a decision. All this information can be seen at one glance. It is also easy to understand. A decision tree is like a horizontal tree. The base of the tree is called theDecision Point. From this point, the different alternatives and sub-alternatives are shown as branches and sub-branches. The manager must study all the alternatives very carefully and select the best alternative.
3. Game Theory
A game is a situation involving at least two people. Each persons decision is based on what he expects the other to do. Game theory is used for deciding about competitive pricing. For e.g. A company may increase the price of its product when it feels that the competitor may also increase the price. For e.g. Pepsi will increase its price if it feels that Coca Cola will also increase its price. Here, both decisions- makers adapt to each other's decisions.
4. Simulation
Simulation technique is used to decide about complex problems. The effect of the decision is observed in a simulated situation and not in a real situation. For e.g. A company can find out the effectiveness of its new advertisement by first showing it to few people before telecasting it on TV.
5. Queueing Theory
This technique is used to find solutions to the waiting list problems in case of airline reservations, railway reservations, college admissions, etc. Queueing theory helps to find out the optimum number of service facilities required and the cost of these services. For e.g. A transport company may introduce more vehicles to carry the passengers in the waiting list. This will prevent the passengers from going to the competitor's company.
6. Network Techniques
Managers use network techniques like PERT (Program Evaluation Review Technique) and CPM (Critical Path Method) for complex projects, where many activities have to be completed. With the help of these techniques, complex projects can be completed as per the schedule. Network techniques save time and cost.
7. Probability Decision Theory
Probability Decision theory is based on the assumption that the future is uncertain. There is a chance that a certain event may or may not take place. Based on available data and subjective judgement of the manager, various probabilities are assigned (given) to alternative courses of action (decision). The likely / possible outcomes of different alternatives are evaluated, and the most likely alternative is selected.
8. Payoff Matrix
Payoff matrix is a statistical technique, which helps managers to choose the best alternative. A payoff is the return or reward for selecting the best alternative. The best alternative can be a combination of many alternatives or a single alternative. For e.g. A manager may decide to increase sales and profit by increasing advertising, improving quality of the product, reducing the price, etc. Each alternative or a combination of alternatives may provide an expected reward.
GENERAL BUSINESS PLANNING:
1. Executive summary
Write this last. It’s just a page or two that highlights the points you’ve made elsewhere in your business plan.
It’s also the doorway to your plan—after looking over your executive summary, your target reader is either going to throw your business plan away or keep reading, so you’d better get it just right.
Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company.
2. Opportunity
Describe the problem that you solve for your customers and the solution that you are selling.
It is always a good idea to think in terms of customer needs and customer benefits as you define your product offerings, rather than thinking of your side of the equation (how much the product or service costs, and how you deliver it to the customer).
Sometimes this part of the plan will include tables that provide more details, such as a bill of materials or detailed price lists, but more often than not this section just describes what you are selling and how your products and services fill a need for your customers.
3. Market analysis summary
You need to know your target market—the types of customers you are looking for—and how it’s changing.
Use this section to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them.
You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?
4. Execution
Use this section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.
You’ll want to cover the technology you plan on using, your business location and other facilities, special equipment you might need, and your roadmap for getting your business up and running. Finally, you’ll want to outline the key metrics you’ll be tracking to make sure your business is headed in the right direction.
5. Company and management summary
This section is an overview of who you are.
It should describe the organization of your business, and the key members of the management team, but it should also ground the reader with the nuts and bolts: when your company was founded, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated.
Be sure to include summaries of your managers’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. Full-length resumes should be appended to the plan.
6. Financial plan
At the very least this section should include your projected profit and lossand cash flow tables, and a brief description of the assumptions you’re making with your projections.
You may also want to include yourbalance sheet, your sales forecast,business ratios, and a break-even analysis.
Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business.
PRIORITIZATION AND DEVELOPMENT STRATEGIES:
MIS design and development process has to address the following issues successfully:
There should be effective communication between the developers and users of the system.
There should be synchronization in understanding of management, processes and IT among the users as well as the developers.
Understanding of the information needs of managers from different functional areas and combining these needs into a single integrated system.
Creating a unified MIS covering the entire organization will lead to a more economical, faster and more integrated system, however it will increase in design complexity manifold.
The MIS has to be interacting with the complex environment comprising all other sub-systems in the overall information system of the organization. So, it is extremely necessary to understand and define the requirements of MIS in the context of the organization.
It should keep pace with changes in environment, changing demands of the customers and growing competition.
It should utilize fast developing in IT capabilities in the best possible ways.
Cost and time of installing such advanced IT-based systems is high, so there should not be a need for frequent and major modifications.
It should take care of not only the users i.e., the managers but also other stakeholders like employees, customers and suppliers.
Once the organizational planning stage is over, the designer of the system should take the following strategic decisions for the achievement of MIS goals and objectives:
Development Strategy: Example - an online, real-time batch.
System Development Strategy: Designer selects an approach to system development like operational verses functional, accounting verses analysis.
Resources for the Development: Designer has to select resources. Resources can be in-house verses external, customized or use of package.
Manpower Composition: The staffs should have analysts, and programmers.
The first business application of computers
(in the mid- 1950s) performed repetitive,
high-volume, transaction-computing tasks.
The computers” crunched numbers”
summarizing and organizing transactions
and data in the accounting, finance, and
human resources areas. Such systems
are generally called transaction processing
systems (TPSs)
Intelligent Support System (ISSs): Include expert
systems which provide the stored knowledge of
experts to nonexperts, and a new type of
intelligent system with machine- learning
capabilities that can learn from historical cases.
Knowledge Management Systems: Support the
creating, gathering, organizing, integrating and
disseminating of organizational knowledge.
Data Warehousing: A data warehouse is a
database designed to support DSS, ESS and
other analytical and end-user activities.
Mobile Computing: Information systems that
support employees who are working with
customers or business partners outside the
physical boundaries of their company; can be
done over wire or wireless networks.
Decision Support Systems (DSS):
Computer-based information systems that
combine models and data in an attempt to
solve semi-structured and some
unstructured problems with extensive user
involvement.
DSS Characteristics & Capabilities:
Sensitivity analysis. The study of the impact that
changes in one (or more) parts of a model have on other
parts.
What-if analysis. The study of the impact of a change in
the assumptions (input data) on the proposed solution.
Goal-seeking analysis. Study that attempts to find the
value of the inputs necessary to achieve a desired level of output.
DSS Structure and Components:
•Data management subsystem
•Model management subsystem
•User interface
•Users
•Knowledge-based subsystems
•DSS Computing Environment.
Emerging Types of DSS :
Frontline decision making. The process by
which companies automate the decision
processes and push them down into the
organization and sometimes out to
partners.
Real-Time Decision Support. The systems
that supports business decisions that must
be made at the right time and frequently
under time pressure.
Group Decision Support Systems:
Virtual group. A group whose members
are in different locations.
Group decision support system (GDSS).
An interactive computer-based system that
supports the process of finding solutions
by a group of decision makers.
Decision room. A face-to-face setting for a
group DSS, in which terminals are
available to the participants.
Executive Support Systems:
Organizational decision support system
(ODSS): A DSS that focuses on an
organizational task or activity involving a
sequence of operations and decision
makers.
Executive information system (EIS): A
computer-based technology designed in
response to the specific needs of
executive support system (ESS).
The Capabilities of an ESS.
Expert Systems (ES):
A computer system that attempts to mimic
human experts by applying reasoning
methodologies or knowledge in a specific
domain.
Expertise and knowledge
Expertise is the extensive, task-specific knowledge
acquired from training, reading and experience. The
transfer of expertise from an expert to computer and
then to the user involves four activities:
Knowledge acquisition: Knowledge is from experts or from
documented sources.
Knowledge representation: Acquired knowledge is
organized as rules or frames (objective-oriented) and
stored electronically in a knowledge base.
Knowledge inferencing: Given the necessary expertise
stored in the knowledge base, the computer is
programmed so that it can make inferences. The
reasoning function is performed in a component called the
inference engine, which is the brain of ES.
Knowledge transfer: The inferred expertise is transferred
to the user in the form of a recommendation.
Expert Systems Components
:
•Knowledge base
•Inference engine
•User interface
•Blackboard
•Explanation •subsystem
MIS AS A TECHNIQUE OF PROGRAMMED DECISIONS:
A programmed decision is used to solve routine, repetitive but complex problems. These techniques are also called as Quantitative Techniques. The managers working at lower-level of managementmake these decisions.
Various Approaches or Techniques for making programmed decisions are:-
1. Linear Programming
Linear Programming is a quantitative technique. It is used to decide how to distribute the limited resources for achieving the objectives. Here, linear, means the relationship between variables, and programming means taking decisions systematically. Linear programming is used when two or more activities are competing for limited resources. For e.g. product mix decisions, inventory management decisions, etc. Linear programing is used for Agriculture, Industry, Contract biding and Evaluation of tenders.
2. Decision Tree
A decision tree is a diagram which shows all the possible alternatives of a decision. All this information can be seen at one glance. It is also easy to understand. A decision tree is like a horizontal tree. The base of the tree is called theDecision Point. From this point, the different alternatives and sub-alternatives are shown as branches and sub-branches. The manager must study all the alternatives very carefully and select the best alternative.
3. Game Theory
A game is a situation involving at least two people. Each persons decision is based on what he expects the other to do. Game theory is used for deciding about competitive pricing. For e.g. A company may increase the price of its product when it feels that the competitor may also increase the price. For e.g. Pepsi will increase its price if it feels that Coca Cola will also increase its price. Here, both decisions- makers adapt to each other's decisions.
4. Simulation
Simulation technique is used to decide about complex problems. The effect of the decision is observed in a simulated situation and not in a real situation. For e.g. A company can find out the effectiveness of its new advertisement by first showing it to few people before telecasting it on TV.
5. Queueing Theory
This technique is used to find solutions to the waiting list problems in case of airline reservations, railway reservations, college admissions, etc. Queueing theory helps to find out the optimum number of service facilities required and the cost of these services. For e.g. A transport company may introduce more vehicles to carry the passengers in the waiting list. This will prevent the passengers from going to the competitor's company.
6. Network Techniques
Managers use network techniques like PERT (Program Evaluation Review Technique) and CPM (Critical Path Method) for complex projects, where many activities have to be completed. With the help of these techniques, complex projects can be completed as per the schedule. Network techniques save time and cost.
7. Probability Decision Theory
Probability Decision theory is based on the assumption that the future is uncertain. There is a chance that a certain event may or may not take place. Based on available data and subjective judgement of the manager, various probabilities are assigned (given) to alternative courses of action (decision). The likely / possible outcomes of different alternatives are evaluated, and the most likely alternative is selected.
8. Payoff Matrix
Payoff matrix is a statistical technique, which helps managers to choose the best alternative. A payoff is the return or reward for selecting the best alternative. The best alternative can be a combination of many alternatives or a single alternative. For e.g. A manager may decide to increase sales and profit by increasing advertising, improving quality of the product, reducing the price, etc. Each alternative or a combination of alternatives may provide an expected reward.
GENERAL BUSINESS PLANNING:
1. Executive summary
Write this last. It’s just a page or two that highlights the points you’ve made elsewhere in your business plan.
It’s also the doorway to your plan—after looking over your executive summary, your target reader is either going to throw your business plan away or keep reading, so you’d better get it just right.
Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company.
2. Opportunity
Describe the problem that you solve for your customers and the solution that you are selling.
It is always a good idea to think in terms of customer needs and customer benefits as you define your product offerings, rather than thinking of your side of the equation (how much the product or service costs, and how you deliver it to the customer).
Sometimes this part of the plan will include tables that provide more details, such as a bill of materials or detailed price lists, but more often than not this section just describes what you are selling and how your products and services fill a need for your customers.
3. Market analysis summary
You need to know your target market—the types of customers you are looking for—and how it’s changing.
Use this section to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them.
You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?
4. Execution
Use this section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.
You’ll want to cover the technology you plan on using, your business location and other facilities, special equipment you might need, and your roadmap for getting your business up and running. Finally, you’ll want to outline the key metrics you’ll be tracking to make sure your business is headed in the right direction.
5. Company and management summary
This section is an overview of who you are.
It should describe the organization of your business, and the key members of the management team, but it should also ground the reader with the nuts and bolts: when your company was founded, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated.
Be sure to include summaries of your managers’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. Full-length resumes should be appended to the plan.
6. Financial plan
At the very least this section should include your projected profit and lossand cash flow tables, and a brief description of the assumptions you’re making with your projections.
You may also want to include yourbalance sheet, your sales forecast,business ratios, and a break-even analysis.
Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business.
PRIORITIZATION AND DEVELOPMENT STRATEGIES:
MIS design and development process has to address the following issues successfully:
There should be effective communication between the developers and users of the system.
There should be synchronization in understanding of management, processes and IT among the users as well as the developers.
Understanding of the information needs of managers from different functional areas and combining these needs into a single integrated system.
Creating a unified MIS covering the entire organization will lead to a more economical, faster and more integrated system, however it will increase in design complexity manifold.
The MIS has to be interacting with the complex environment comprising all other sub-systems in the overall information system of the organization. So, it is extremely necessary to understand and define the requirements of MIS in the context of the organization.
It should keep pace with changes in environment, changing demands of the customers and growing competition.
It should utilize fast developing in IT capabilities in the best possible ways.
Cost and time of installing such advanced IT-based systems is high, so there should not be a need for frequent and major modifications.
It should take care of not only the users i.e., the managers but also other stakeholders like employees, customers and suppliers.
Once the organizational planning stage is over, the designer of the system should take the following strategic decisions for the achievement of MIS goals and objectives:
Development Strategy: Example - an online, real-time batch.
System Development Strategy: Designer selects an approach to system development like operational verses functional, accounting verses analysis.
Resources for the Development: Designer has to select resources. Resources can be in-house verses external, customized or use of package.
Manpower Composition: The staffs should have analysts, and programmers.
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