Management Information System

Unit - 1
UNIT 1: Introduction to MIS Importance of information for management decisions
Systems Approach and Information System Development Information System Architecture
Quantitative Techniques and Management Information Systems interfacing.
Management Information System: Management Information System is an acronym of these words

Management
Information
System
MANAGEMENT: Management is the art of getting things to be done through and with the
people in formally organized groups
(Koontz 1973)

The basic functions which a manager performs in an organization

Planning: Planning is a process of foreseeing the future in advance. It bridges a gap

between where we are and where we want to be. Planning should answer the following
questions 1. What to do? 2. When to do? 3. Who is to do? 4. How is it to be done? 5.
Where is it to be done?

Organization: Organization is the process of identifying the entire job, dividing the job
into convenient subjects/task allocating sub-jobs to persons or group.

Staffing: Staffing is the process of putting the right person at the right job.
Directing: The function of directing has been identified with command (Henri

Fayol)
Acc. To modern Management Philosophers 1. Communication 2. Motivation 3.
Leadership Direction is important in order to achieve pre-determined goods and
objectives

Controlling: Controlling and planning are the two sides of the same coin. Controlling
ensures that activities are being performed as per plans. Controlling is a process which
includes

Fixing standards for measuring work performance

Measurement of actual performance
Comparing actual with standards and finding out deviation if any, and
Taking corrective action
INFORMATION: Information, the second component in the term Management Information
System, is considered as a valuable resource by the management in order to run a business
organization. Information is data that is processed and in presented in a form which assists
decision-makers. It may contain an element of surprise, reduced uncertainty or provoke a
manager to initiate an action. Data usually take the form of historical records. In contrast to
information, raw data may not be able to surprise us, may not be organized and may not add
anything to our knowledge. The relation of data to information is that of raw material to
finished product, as depicted in the following diagram.

G. RAJA SEKHAR

PROCESSING

INFORMATION
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Management Information System

Unit - 1

Sometime the information of today may not be information after a certain period of time.
Because of this relationship between data and information, the two terms are often used
interchangeably.
Information is a necessary and vital input in any decision-making process in an
organization. However, it is not available in a ready form. Information reduces uncertainty and
triggers action.
SYSTEM: The system is the most loosely held term in management literature because of its
use in different contexts. However, a system may be defined as a set of elements which are
joined together to achieve a common objective. The elements are interrelated and
interdependent. The set of elements for a system may be understood as Input, Process and
Output. A system has one or multiple input(s); these inputs are processed through a
transformation process to convert these input(s) into output(s).

INPUT

PROCESS

OUTPUT

MANAGEMENT INFORMATION SYSTEM:

Management Information System is a system consisting of people, machines,
procedures, database and data models as its elements for capturing data, processing and
retrieving data according to manager requirements for decision support system.
D.P. Goyal
OR
Management Information System
An integrated user machine system
For providing information,
To support the operations, management analysis and decision making.
The system utilizes
Computer hardware and software
Manual Procedures
Models for analysis, planning, controlling and decision-making and
A Database
Gordon B. Davis
OR
The typical MIS is based on four major components

Data Gathering: To collect data from different sources

Data Entry: Data is inputted and stored in databases as information
Data Transformation: Modifying the information into required format
Information Utilization: To disseminate the data to different levels of

management

within the organization, for decision making.

Management Information System

Characteristics:
System Approach: The information system follows a system approach. The systems
approach implies a holistic to the study of the system and its performance in the light
of the objective for which it has been constituted. This approach is anti-piecemeal in
nature. In other words, systems approach, in the sense intended here, means taking a

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Management Information System

Unit - 1
comprehensive view or a complete look at the interlocking sub-system that operate
within an organization.

Management

Oriented: This is an important characteristic of MIS. For designing of

MIS, top-down approach / bottom-up approach should be followed. Top-down approach
suggests that the system development starts from the determination of management
needs and overall business objectives and vise-versa

Need based: MIS design and development should be as per the information needs of
managers at different levels, viz., strategic planning level, management control level
and operational control level. In other words, MIS should cater to the specific needs of
managers in an organizations hierarchy.

Exception

Based: MIS should be developed on the exception-based reporting

principle, which means an abnormal situation i.e. the maximum, minimum or excepted
values vary beyond tolerance limits. In such situations, there should be exception
reporting to the decision-makers at the required level.

Future

Oriented: Besides exception-based reporting, MIS should also look at the

future. In other words, MIS should not merely provide past or historical. Information;
rather it should provide information, on the basis of projections based on which actions
may be initiated.

Integrated: Integration is necessary characteristic of a MIS. Integration

is significant
because of its ability to produce more meaningful information. Integration in the sense
intended here, means taking a comprehensive view or looking at the complete picture
of the interlocking sub-system that operate within the company. One can start
developing an MIS by attacking a specific sub-system, but unless its place in the total
system is realized and properly reflected, serious shortcomings may result. Thus an
integrated system that blends information from several operational areas is a
necessary characteristic of an MIS.

Common Data Flow: Because of integration concept of MIS, there is an opportunity to

avoid duplication and redundancy in data gathering, storing and dissemination. System
designers are aware that a few key source document account for much of the
information flow. The common data flow concept support several of the basic tenets of
the system analysis. These include avoiding duplication, combining similar functions
and simplifying operations wherever possible. The development of common data, flow
is an economically sound and logical concept, but it must be viewed in a practical light.

Long-Term Planning: MIS is developed over relatively long periods. Such systems do
not develop overnight. A heavy element of planning is involved. The MIS designer must
have the future objectives and needs of the company in mind. The designer must avoid
the possibility of the system going obsolete before its time.

Sub-System

Concept: The process of MIS development is quite complex and one is

likely insight frequently. Thus the system, through viewed as a single entity, must be
broken into digestible sub-systems which are more meaningful at the planning stage

Central

Database: A Central database is the mortar that holds functional system

together. Each system requires access to the master file of data covering inventory,
vendors. Personnel, customers etc.

Management
Functions:
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Information

System
3

User

User
User

Management Information System

Unit - 1

MIS is set up by an organization with the prime objective management information to

be used by its managers in decision-making. Thus, MIS must perform the following functions
in order to meet its objectives.

UserData

Capture: MIS capture data from various internal and external sources of an
organization. Data capture may be manual or through computer terminals. End users
typically record data about transactions on some physical medium, such as a paper
from, or enter it directly into a computer.

Processing
Source

of Data: The captured data is processed to convert it into the required

management information. Processing of data is done by such activities as calculating,
comparing, sorting, classifying and summarizing. These activities organize, analyze and
manipulate data using various statistical, mathematical, operations research and / or
other business models.

Storage of Information: MIS stores processed or unprocessed data for future use. If
any information is not immediately required, it is saved
as an organizational record. In
Source
this activity, data and information are retained in an organized manner for later use.
Stored data is commonly organized into fields, record, files and database.

Retrieval of Information: MIS retrieves information from its stores as when required
by various users. As per the requirements of management users, the retrieved
information is either disseminated as such or it is processed again to meet the exact
Management information demand.

Dissemination

of Information: Information, which is a finished product of MIS, is

disseminated to the users in the organization. It could be periodic, through reports or
online through computer terminals

Structure of MIS:
MIS structure may be described by following a variety of approaches

Physical Components: Hardware, Software, Databases, procedures, Input and Output

Information System Processing Functions:

a To process transactions
b To maintain Master files
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Management Information System

c To produce Reports
d To process enquiries
e To process Interactive Support Applications

Unit - 1

Decision Support
Levels of Management Activities
a

b
c

Strategic Planning: long range consideration, business directions, Market

Strategy, Product Mix, etc.
Management Control Level: Acquisition, organizing of resources, structure of
work
Operational Control: It is related to short-term decisions for current operations.

Organizational Functional: Production, Finance, Marketing, Human Resource and MIS

The Challenge of Information Systems:

The information system investment challenge: How can organizations obtain business
value from their information systems?

The

Strategic Business Challenge: What complementary assets are needed to use

information technology effectively?

The

Globalization Challenge: How can firm understand the business and systems
requirements of global economic environment?

The

Information Technology Infrastructure Challenge: How can organization an

information technology infrastructure that can support their goals

Ethics and Security:

Pitfalls of MIS:

It is common for the people within the organization to resist the implementation of an
MIS or the modification or replacement of an existing MIS. According to Dickson and Simmons,
there are five factors leading of the resistance of new MIS system.

Disruption

of departmental boundaries: A new MIS often results in changes in

several organizational units. For instance, inventory and purchasing departments might
be merged in order to make MIS more efficient.

Distribution of the

informal system: the informal communication network may be

disrupted as the MIS alters communication patterns.

Specific

individual Characteristics: People who have worked with the old systems
for years may feel threatened towards their job comfort zone or their power base.

The organizational culture: If the organization has a culture of openness, trust and
free communication, employees will not resist the MIS. However, if the culture is closed
and inflexible, resistance is almost a certainty.

How the change is implemented: If management and subordinates work together in

planning to strategically implement at new MIS, resistance can be minimized.

Types of Decisions:
Structured

Decisions: These are repetitive and routine and decision makers can
follow a definite procedure for handling them to be efficient, these decisions are made
by Lower, Middle level management in the organization, but include unstructured
components.
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Unstructured

Decisions: In which the decision makers must provide judgment

evaluation, and insights into the problem definition. These decisions are made at higher
level of the firm.

Semi Structured Decisions: In which only part of the problem has a clear-cut answer
provided by an acceptance procedure.

Stages in the decision making process:

Simon (1960)

Intelligence

Identifying and understanding the problems

MIS deliver information can help for identify problems

Problem discovery

What are the possible solutions?

Design
for exploring alternatives,
because they process analytical tools for modeling data, grabbing users to exp

Solution discovery

What is the best solution?

Choice
using analytical
tools to identifying optional solutions
Also GDSS using online meeting and collaborative tools to choose the most acceptable and wide

Choosing Solutions

Models of Decision
Making:
How well the solution working

Individual Decision making models:

MIS providing managers with routine reports on the progress of a specific solutio
a RationalImplementation
Model: [Equity] Rational is built on human behavior ideas that people engage
using analytical models and data to fine tune of solution
in basically consistent, rational, value-maximization calculation. According to this model
an individual identifies goals, action by their contribution to those goals and choose the
alternatives
that contribute most to those goals.
Testing
the Solution
Negative aspects:
Looking personal benefits
Single goal oriented
Unlimited needs and preferences of human beings
Personal bios
b Congnitive Model: [Thinking indifferent Manner] Underlying personality dispositions
towards the treatment of information, selection of alternatives, and evaluation of
consequences
Congnitive style that describes people (systematic decision makers) who approach a
problem by structuring it in terms of some formal methods
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Management Information System

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Congnitive style that describes people (intuitive decision makers) who approach a
problem with multiple methods in an unstructured manner using trial and error to find a
solution.
Group Decision Making Models:

a
b

c
d

Organizational Models: Decision making that takes into account the structural and
political characteristics of an organization.
Bureaucratic Models: Decision making where decisions are shaped by the organizations
standard operating procedures (SOPs)
Rules are strictly followed
Traditionally thinking
Structure of hierarchy
Political Models: Decision making where decisions result from competition and
bargaining among the organizations interest groups and key leaders.
Garbage Models: Decision making that states that organizations are not rational and
that decisions are solutions that become attached to problems for accidental reasons. If
any one takes faulty decision making, then that information stored for future purpose.

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Management Information System

IMPORTANCE OF INFORMATION FOR MANAGEMENT DECISIONS:

Unit - 1

On the basis of decisions to be taken by managers at different levels of management,

we can divide information into three categories
Intelligence information is gathered from
the external
environment
Public
information
is disseminated to the external environment

Strategic Informatio
Top Level

Tactical Inform

Middle Level

Operational Infor

Lower Level
OPERATIONAL INFORMATION:
Operational decisions are taken by the lower level of management. So their information
need is also known as operational information with relates to the day-to-day operations like
daily or weekly sales, day-to-day cash positions, day-to-day productions etc. This information
is repetitive in nature.
Managers requires low predictions to obtain this information as it is retrieved internally
from previous and current performance.
TACTICAL INFORMATION:
This information related to the middle level of managers. They require information for
allocating resources and establishing control to implement the top level plans.
It is partly historic and partly current which uses both the internal and external
resources of providing information.
STRATEGIC INFORMATION:
Strategic information is used to make a choice among business options. It helps in
evaluating those options so that managers can find alternative strength than his competitors.
It is related to the top managers.
It is predictive in nature and have long term perspective. It is retrieved not only from
external sources but to some extent internal resources are also explored.
The main emphasis of information system is to generate information which is required by the
managers of a business organizations
There are mainly 3 levels of management in every business organization top level, Middle
level, Lower level.
Top level Management is the highest level of management and they are the policy makers
of any business organization such as formulation of strategy policies, long-term plans and
objectives, makes strategic decisions.

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Middle Level Managers is the next level of management which is responsible for
Receives Quarterly / Monthly reports on final reviews, financial analysis, Summarized comparison of

Receives Monthly reports on plant comparisons financial planning reports, Product Cost summaries pl

Receives Weekly / Monthly reports on financial statement & analysis of important costs, summarized

Receives weekly reports on departmental cost, summaries and production cost

Receives reports on direct and indirect labour, materials usage, scrap, production counts and m
implementing these plans and getting work done by the subordinates, such as formulate
operational plans & objectives to implement strategy, Make operational decisions.
Lower level management relates to the work force of any business organizations these are
the people responsible to convert the plan and polices into actual products and services, such
as operational plans and objectives make short run decisions, transact day to day business
operations.

INFORMATION NEEDS OF MANAGERS AT DIFFERENT LEVELS TRANSLATED BY

MANAGEMENT INFORMATION SYSTEM.
Systems Approach and Information
There are different approaches which are commonly used in the design of
Management Information System.
TOP DOWN APPROACH: Top down approach is sometimes known as object oriented
approach. Top down Approach consists of a hierarchy of modules, with each module
having a single entry and single exist subroutine.
The top level shows the most important division of work and the lowest level at
the bottom shows the details.

Total
Stud
y
Appr
oach
Key
Vari
able
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Top Dow
n
Appr
oach
Syste
m
Appro
ach

Null
Appr
oach

Bott
om up
Appr
oach
By Prod
uct
Appr
oach

Actually in this approach, the management

information system is designed to support the
goals and objectives of the top managers in the
organization.
In this design, information requirements of
top managers are considered at initial level
and as we go down, the information
requirements of each level is added to them.
Over all objectives of the organization are
set by the top, middle and low management.

Management Information System

Unit - 1
The main drawback of this approach was that the main people who are involved in achieving
the objectives of the organization are not involved fully in the process.
BOTTOM UP APPROACH: it is also known as problem oriented approach. A bottom up
approach is that when small modules are linked with higher modules and soon till the design
is completed.
The needed at higher level that has already being generated at lower level.
This approach is different or opponent of the top down approach which is an analytical
process of breaking down information requirements into move and more detailed component.
Bottom up design first satisfices operational processing requirements. Then
summarizes that information in the form of managerial reports to middle level managers and
soon, until all levels are satisfied.
This approach is not used by a group of the managers because their particular needs
cannot be synthesized with transaction information.
BY PRODUCT APPROACH: The role of information system is just to atomize the manual
work to make the organization paperless. So at that time, all the working or office activities
like payroll, billing and other related data processing are made computerized.
little attention is paid toward information needs of the management. However, it is
understanding that very level of management requires information to take decision.
The drawback of this approach is that no analysis of information requirement at each
level of management is done.
Information produced by the management information system is generally in the form
of voluminous reports and to find relevant information is a very tedious task.
NULL APPROACH: the shortcomings of the by product approach is usually overcome. This
approach lays little emphasis on the production of formal information for management by the
Management Information System.
According to mintzberg, most of top managers gather information through verbal and
informal communication rather than information through formula reports.
But while supporting this designing approach, one must keep in mind that MIS best
serve the information needs of mangers at middle and lower level.
KEY VARIABLE: In this approach, MIS provide information related to key variables only. These
key variables are crucial attributes of the organization to access its performance, taking
decisions and planning, cash, profit sales etc.
According to this approach key variable are identified and MIS is designed to produce reports
on the effective management of these variables.
In this concept only variation from actual performance is reported. The main strength of
this approach lies in its recognition that effective information must be provided selectively.
TOTAL STUDY APPROACH: In this approach a comparison between the information
requirements of management and the information supply by the current management
information system is done.
This process can be done by taking interviews from all the managers regarding their key
decisions, objectives and information needs.

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Management Information System

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In this approach main emphasis is to find out the organization information needs as well as to
find out the short comings of the present management information system and to take
effective measure to fill the gap arrived.
CRITICAL SUCCESS FACTOR: This approach is based on the assumptions that an
organization has certain specific goals.
There is a long list of approach. The primary aim of Management Information System
design is to identify the information at each level and effectively serve different information
needs at different level of management.

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Management Information System

Unit - 1

Network Re

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Management Information System

MANAGEMENT INFORMATION SYSTEM ARCHITECTURE:

Unit - 1

A Management Information System architecture comprises data architecture, hardware

architecture, software architecture, network architecture and soon. In general MIS,
architecture serves as a higher level frame work for understanding different views of the
fundamentals building blocks of an information system.
MIS architecture framework was initially inspired by the work of John Zachman and later
on by Whitten, Bentley and Dittman.
According to them, different systems stakeholders have different perspectives or views
regarding system architecture. System owners and system users have three common goals
from information systems such as

To improve business knowledge.

To improve business process and services.
To improve business communication and people collaborations.
But the role of system designer and builders is more technology oriented. Their focus is an
information system is as follows
The database technologies that support business accumulation and use business
knowledge.
The software technologies that automate and support business process and services.
The interface technologies that support business communications and collaborations.
KNOWLEDGE:
Data is converted into information and information leads to business knowledge that
helps management to make intelligent decisions. So knowledge is what enables a company to
achieve its mission and vision.
In order to improve knowledge by the information than system, stakeholders has their own
perspective.
The owners are interested in information rather than raw data that adds new business
knowledge.
The owners role in information system development should be to define the scope and
vision of this system.
An information workers and systems users capture, store, process, edit and use data
available in the organization, they deal with data requirements of organization.
Data requirements are an extension of the business entities and business rules that are
prescribed by the system owners.
The data provided by system users is used to create information and subsequent
business knowledge.
They are responsible to convert data requirements given by system user into database
design which is used by system builders to develop a computerized database used in
information system.
They focus on the actual database management system technology used to store the
business data that will support Business Knowledge.
They may use database technology as well as other technologies such as flat files into
the development of information system.
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Management Information System

PROCESS:

Unit - 1

The other fundamental goal of MIS is to improve its business and service process.
Process represent the working of the information system. In information system people
perform some processes and other processes are by machines and computers.
Views of different system stakeholders in terms of improvement of process are as follows
System owners are interested in the business functions and the group of related
processes that supports a business.
Cross functional information system is that which supports relevant business process
from several businesses functional without regards to traditional organizational
boundaries.
System users specify the business process in terms of business requirements for a new
system.
Process requirements man users expectations of the processing requirements for
business process and its information system.
Process requirements are also frequently specified in term of work flow that means flow
of transactions through business process to ensure that the appropriate checks and
approval are implemented.
System designer View:
Many business purchase readymade commercial software solutions instead of building or
developing their own in-house software. The designer must develop software specification
which fulfill the business process requirements of the system users as well as provide
sufficient details and consistency for communicating the software design to system builders.
COMMUNICATION:
A common goal of most business organizations is to improve their communication and
cooperation among employees and various components of the information system. The need
of communication improvements can be at two ends
Information system must provide an effective and efficient interface to the systems
users. These interfaces leads to teamwork.
Information system act as on effective & efficient interface with other information
system either in the business itself or outside the business organization.
System owners view: Relevant problems, opportunities and constraints may be identified and
analyzed to obtained a proper solution.
System user View: The input and output represent how these systems would interact with
user, employees, customers, division of business itself and the other business houses.
NETWORK
Network technology allows properly designed information system to separate the knowledge,
process and communication and force them to communicate across the network.

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Management Information System

SYSTEM DEVELOPMENT

Unit - 1

ystem development in the industry, is the process of developing a new information

system. System development includes a systematic process of conceiving, designing
and creating as information system.

No doubt, the process of developing a small system may be very simple, but for the
large complicated system, which is supposed to support thousands of business processes for
a large number of users both within and outside an organization, the development process
becomes very complex.
System development uses a systematic approach for problem solving, in which a
complex problem is broken up into smaller manageable problems using a systems hierarchy
and then developing solution for each problem within the hierarchy.
System development includes both top down as well as bottom up approaches while for
the problem identification, it uses top down approach, the system development uses bottom
up approach for solution.
System development process can be divided into following stages
SYSTEM
INVESTIGATI
ON
MAINTANEN
CE

SYSTEM
ANALYSIS

SYSTEM
INVESTIGATION: A business
organization may have some
problem which may not be clear
to
the
managers
of
the
organization.
Examples:

Improve
IMPLEMENTATI
ON

SYSTEM
DESIGN

operational
efficiency.

Improve
effectiveness.

Gain
TESTING

SYSTEM
DEVELOPME
NT

competitive
advantage.

Expand

the

existing business into new markets.

Diversify the business by introducing new product lines and soon.

The organization may thus, invite a business analyst (consultant) to assist him / her in
identifying the problem / opportunity, identifying it and suggesting an information
solution for the identified problem or an opportunity.
Preliminary investigation is the first step in the system development, in which someone
identifies a need for a new system and then the feasibility of such an identified system is
determined.
The objectives are to determine whether the request is valid and feasible before any
recommendations is made that may include.

To do nothing.
To improve or modify the existing system.
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To build / acquire altogether a new system.

System investigation is not a design, nor does it include the collection of details to completely
describe the business system. System investigation includes the following two sub-stages
Problem Definition
Feasibility Study

Problem definition:
To identify and understand the problem at hand or an opportunity becomes very crucial
as it sets the stage to understand the problem or the opportunity. It has been observed that
this step is often skipped in the entire system development process and becomes a major
reason for the failure of information system.
Thus the business analyst most prepares written statement of the objectives and scope
of the problem.
Based on interviews with the user the business analyst writes brief description of his /
her understanding of the problem and reviews it with both groups meeting.
Some of the statements of the problem may be like

The existing system has a poor response time

It is unable to handle the workload
The problem of cost
The problem of accuracy and reliability
The requisite information is not produced by the existing system
The problem of security
There is another needs to go in for integrated information system
Feasibility Study:
Feasibility study refers to checking an identified solution for its viability i.e., whether
the identified solution can be carried out and implemented in the organization or not. In this
step a high level study is conducted which is intended to answer a number of questions like
what is the problem.
The aim of a feasibility study is to assess alternative systems or solutions and to
propose the most feasibility and desirable system for development. Thus, feasibility study
provides an overview of the problem and acts as an important checkpoint that should be
completed before committing more resources.
The feasibility study of proposed solution can have carried out in terms of the following
Technical feasibility: The technical feasibility is conducted to analyze whether the hardware and software
required for the proposed system can be acquired or developed by an organization in the
given time.
Technical feasibility should answer the following questions
Does the necessary technology exist to do what is suggested and can it be acquired?
Does the proposed equipment have the technical capacity to hold the data required to
use the new system?
Will the proposed system provide adequate responses to inquiries, regardless of the
number of locations and users?
Can the system be expanded?
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Is there any technical surety of accuracy, reliability, ease of access and data security?
Economic Feasibility:
In this study, expected costs and expected benefits are evaluated to know whether
benefits justify the investment in the proposed system. The economic questions raised by
analysts during the preliminary investigation are for the purpose of estimating the following
The cost of conducting a full system investigation
The cost of hardware and software for the class of application being considered for the
entire life of the proposed project.
The operating expenses required during the life period of the suggested project(s).
The benefits in the form of reduced costs, improved customer service, improved
resource utilization or fewer costly errors.
Legal Feasibility: Legal feasibility is undertaken to evaluated the legal aspects to implement a solution
for the identified problem. The various questions raised by the analysts during the preliminary
investigation for the purpose of legal feasibility. Legal feasibility includes
Whether any legal permission is required to implement the system?
Whether the required permission, if any, can be obtained from the concerned agency?
Whether the system abides by all laws and regulations of the land?
Operational feasibility:
This study covers the willingness and ability of the management, employees,
customers, suppliers etc. to operate, use and support the proposed system. Operational
feasibility asks if the system will work when it is developed and installed. The three major
barriers to implementation? Is there a resistance to the new systems? The following questions
are asked in operational feasibility
Is there sufficient support from the management? From employees, customers &
suppliers?
Are current business methods acceptable to the users?
Have the users been involved in the planning and development of the system project?
If the users and all others stakeholders agrees to the new system and thus the new system is
developed as per rules, regulations, laws, organizational cultural, union agreements etc. and
above all with the active involvement of the users.
Schedule feasibility:
The identified solution would be value if it can be completed within the time framework.
Thus, the system is assessed in terms of schedule feasibility the schedule feasibility evaluates
the probability of completing the system in the time allowed fir its development.
SYSTEM ANALYSIS:
System analysis is a detailed study of various operations of a system.
System analysis may be understood as a process of collecting and interpreting facts,
identifying problems and using the information to recommend improvements in the system
System analysis is carried out with the following two objects
To know how a system currently operates, and
To identify the users requirements in the proposed system.
Basically system analysis is a detailed study of all important aspects under considerations and
the existing system, and thus the study becomes a basic for the proposed system. Such a
study analysis should be done by using various modern tools and techniques, such as data
flow diagrams, data dictionary, and rough descriptions of the relevant algorithms.

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Requirements determination:
Requirement determination which is also termed as a part of software requirements
specifications (SRS) in the starting point of the system development activity.
The requirement determination is a means of translating the ideas given by the user into a
formal document and thus to bridge the communication gap.
A good SRS provides the following benefits
It bridges the communication gap between the user and the developers by acting as as
a basis of agreement between the two parties.
It reduces the development cost by overcoming errors and misunderstanding early in
the development.
It becomes a basis of reference for validation of the final product and thus acts as a
benchmark.
Requirement determination consists of three activities

Requirement anticipation
Requirement investigation
Requirement specification
REQUIREMENT ANTICIPATION activates include the past experience of the analysis, which
influence the study, they may foresee the like hood of certain problems or features and
requirements for a new system.
REQUIREMENT INVESTIGATION is at the center of system analysis in this the existing
system is studied and documented for further analysis. Various methods like fact-finding
techniques are used for the purpose.
REQUIREMENT SPECIFICATION activates, the data produced during the fact-finding
investigation in analyzed to determine requirements specification, which is the description of
the features for a proposed system.
SYSTEM DESIGN:
System design is another important step in the system development process. This
phase starts start the system analysis phase is over.
System design Objectives:
A system designed with the following main objectives

Practicality: The system should be designed in such a way that it may be learnt and
operated with ease by the users. The design should be user oriented.

Flexibility: The business organization are dynamic in nature. Therefore, a system must
be responsive to the change inevitably requested by its users.

Efficiency: A system must be efficient i.e., it should perform jobs within their specified
time. The efficiency of a system may be measured in terms of the following parameters
o Throughput: it is the ability to handle a specified number of jobs per unit of
time
o Response time: the ability to respond to a request made by the user within a
given time limit
o Runtime: it is the ability to undertake the complete job within a given time limit.

Security:

This aspect related to hardware reliability, physical security of data and

detection and prevention of fraud and abuse of data.

System design is carried out at two levels, namely

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Conceptual

level design (External design or general design) is a prerequisite for the

detailed design. It is also known as gross design high level design.

Detailed system design (Internal design or Detailed design) is to prepare a blueprint of

a system that meets the goals of the conceptual system design.
System Development:
The most creative and challenging phase of the system life cycle is system design, which
refers to the technical specifications that will be applied in implementing the candidate
system. It also includes the construction of programmers and program testing.
It has the following stages:

Acquiring hardware and software, if necessary

Database design
Developing system processes
Coding and testing each module
The final report prior to implementation phase includes procedural flowcharts, record layout,
report layout and plan for implementing the candidate system. Information on personnel,
money, hardware, facility and their estimated cost must also be available. At this point
projected cost must be close to actual cost of implementation.
Testing the System
System testing requires a test plan that consists of several key activities and steps for
programs, strings, system, and user acceptance testing. The system performance criteria deal
with turnaround time, backup, file protection and the human factors.
Testing process focuses on both:

The internal logic of the system/software, ensuring that all statements have been
tested;

The external functions, by conducting tests to find errors and ensuring that the defined
input will actually produce the required results.

In some cases, a 'parallel run' of the new system is performed, where both the current and the
proposed system are run in parallel for a specified time period and the current system is used
to validate the proposed system.
SYSTEM IMPLEMENTATION:
Once the development of MIS is complete, it is ready for implementation is a process of
installing a newly developed MIS at the users premises and continuously getting the output
it was designed to generate. The new system may be replacement of manual system or a
major modification to an already existing computer-based information system.
Before implementation the designer or developer has to make an environment to get support
from all levels of management.

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System
Implementat
ion

Parallel

Pilot

Phased

Plunge

PARALLEL: When new and old system are run in parallel for a trail period and a comparison
of both is done. If the proposed system gives a satisfactory solution to information need, it is
accepted and old one become obsolete.
PILOT: In this the new system is introduced at one location or site only for trail. If its
performance is according to the need it is introduced in whole of the company or organization.
PHASED: Introduce the system in phases i.e., the new system is introduced at one site at a
time. This method is useful when upgrading of an old system is being done.
PLUNGE: It is also known as immediate cut over or change-over. Introduce the new system as
and when it is ready to work and remove the old one directly.
SYSTEM MAINTENANCE
Maintenance is necessary to eliminate the errors in the working system during its working life
and to tune the system to any variation in its working environment. Often small system
deficiencies are found, as system is brought into operation and changes are made to remove
them. System planner must always plan for resources availability to carry on these
maintenance functions.
QUANTITATIVE TECHNIQUES AND MANAGEMENT INFORMATION SYSTEMS
INTERFACING.
Meaning and Definition:
Quantitative techniques may be defined as those techniques which provide the
decision makes a systematic and powerful means of analysis, based on quantitative data. It is
a scientific method employed for problem solving and decision making by the management.
With the help of quantitative techniques, the decision maker is able to explore policies for
attaining the predetermined objectives. In short, quantitative techniques are inevitable in
decision-making process.
Classification of Quantitative Techniques:
There are different types of quantitative techniques. We can classify them into
three categories. They are:
1 Mathematical Quantitative Techniques
2 Statistical Quantitative Techniques
3 Programming Quantitative Techniques
1 Mathematical Quantitative Techniques:
A technique in which quantitative data are used along with the principles of
mathematics is known as mathematical quantitative techniques.
Mathematical quantitative techniques involve:
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a Permutations and Combinations: Permutation means arrangement of objects
in a definite order. The number of arrangements depends upon the total number
of objects and the number of objects taken at a time for arrangement. The
number of permutations or arrangements is calculated by using the formula.
Combination means selection or grouping objects without considering their order.
The number of combinations is calculated by using the formula.
b Set Theory:
Set theory is a modern mathematical device which solves various types of critical
problems.
c Matrix Algebra:
Matrix is an orderly arrangement of certain given numbers or symbols in rows
and columns. It is a mathematical device of finding out the results of different
types of algebraic operations on the basis of the relevant matrices.
d Determinants:
It is a powerful device developed over the matrix algebra. This device is used for
finding out values of different variables connected with a number of
simultaneous equations.
e Differentiation:
It is a mathematical process of finding out changes in the dependent variable
with reference to a small change in the independent variable.
f Integration:
Integration is the reverse process of differentiation.
g Differential Equation:
It is a mathematical equation which involves the differential coefficients of the
dependent variables.
2 Statistical Quantitative Techniques:
Statistical techniques are those techniques which are used in conducting the statistical
enquiry concerning to certain Phenomenon. They include all the statistical methods
beginning from the collection of data till interpretation of those collected data.
Statistical techniques involve:
a Collection of data:
One of the important statistical methods is collection of data. There are different
methods for collecting primary and secondary data.
b Measures of Central tendency, dispersion, skewness and Kurtis
Measures of Central tendency is a method used for finding he average of a series
while measures of dispersion used for finding out the variability in a series.
Measures of Skewness measures asymmetry of a distribution while measures of
Kurtis measure the flatness of peakedness in a distribution.
c Correlation and Regression Analysis:
Correlation is used to study the degree of relationship among two or more
variables. On the other hand, regression technique is used to estimate the value
of one variable for a given value of another.
d Index Numbers:
Index numbers measure the fluctuations in various Phenomena like price,
production etc. over a period of time, they are described as economic
barometres.
e Time series Analysis:
Analysis of time series helps us to know the effect of factors which are
responsible for changes:
f Interpolation and Extrapolation:
Interpolation is the statistical technique of estimating under certain assumptions,
the missing figures which may fall within the range of given figures.
Extrapolation provides estimated figures outside the range of given data.
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g Statistical Quality Control
Statistical quality control is used for ensuring the quality of items manufactured.
The variations in quality because of assignable causes and chance causes can be
known with the help of this tool. Different control charts are used in controlling
the quality of products.
h Ratio Analysis:
Ratio analysis is used for analyzing financial statements of any business or
industrial concerns which help to take appropriate decisions.
i Probability Theory:
Theory of probability provides numerical values of the likely hood of the
occurrence of events.
j Testing of Hypothesis
Testing of hypothesis is an important statistical tool to judge the reliability of
inferences drawn on the basis of sample studies.
3 Programming Techniques:
Programming techniques are also called operations research techniques.
Programming techniques are model building techniques used by decision makers in
modern times. Programming techniques involve:
a Linear Programming:
Linear programming technique is used in finding a solution for optimizing a given
objective under certain constraints.
b Queuing Theory:
Queuing theory deals with mathematical study of queues. It aims at minimizing
cost of both servicing and waiting.
c Game Theory:
Game theory is used to determine the optimum strategy in a competitive
situation.
d Decision Theory:
This is concerned with making sound decisions under conditions of certainty, risk
and uncertainty.
e Inventory Theory:
Inventory theory helps for optimizing the inventory levels. It focuses on
minimizing cost associated with holding of inventories.
f Network programming:
It is a technique of planning, scheduling, controlling, monitoring and coordinating large and complex projects comprising of a number of activities and
events. It serves as an instrument in resource allocation and adjustment of time
and cost up to the optimum level. It includes CPM, PERT etc.
g Simulation:
It is a technique of testing a model which resembles a real life situation
h Replacement Theory:
It is concerned with the problems of replacement of machines, etc. due to their
deteriorating efficiency or breakdown. It helps to determine the most economic
replacement policy.
i Non Linear Programming:
It is a programming technique which involves finding an optimum solution to a
problem in which some or all variables are non-linear.
j Sequencing:
Sequencing tool is used to determine a sequence in which given jobs should be
performed by minimizing the total efforts.
k Quadratic Programming:
Quadratic programming technique is designed to solve certain problems, the
objective function of which takes the form of a quadratic equation.
l Branch and Bound Technique
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It is a recently developed technique. This is designed to solve the combination
problems of decision making where there are large number of feasible solutions.
Problems of plant location, problems of determining minimum cost of production
etc. are examples of combination problems.
Functions of Quantitative Techniques:
The following are the important functions of quantitative techniques:
1 To facilitate the decision-making process
2 To provide tools for scientific research
3 To help in choosing an optimal strategy
4 To enable in proper deployment of resources
5 To help in minimizing costs
6 To help in minimizing the total processing time required for performing a set of jobs
USES OF QUANTITATIVE TECHNIQUES
Business and Industry
Quantitative techniques render valuable services in the field of business and industry. Today,
all decisions in business and industry are made with the help of quantitative techniques.
Some important uses of quantitative techniques in the field of business and industry are given
below:
1 Quantitative techniques of linear programming is used for optimal allocation of scarce
resources in the problem of determining product mix
2 Inventory control techniques are useful in dividing when and how much items are to be
purchase so as to maintain a balance between the cost of holding and cost of ordering
the inventory
3 Quantitative techniques of CPM, and PERT helps in determining the earliest and the
latest times for the events and activities of a project. This helps the management in
proper deployment of resources.
4 Decision tree analysis and simulation technique help the management in taking the
best possible course of action under the conditions of risks and uncertainty.
5 Queuing theory is used to minimize the cost of waiting and servicing of the customers
in queues.
6 Replacement theory helps the management in determining the most economic
replacement policy regarding replacement of an equipment.
Limitations of Quantitative Techniques:
Even though the quantitative techniques are inevitable in decision-making process, they are
not free from short comings. The following are the important limitations of quantitative
techniques:
1 Quantitative techniques involve mathematical models, equations and other
mathematical expressions
2 Quantitative techniques are based on number of assumptions. Therefore, due care
must be ensured while using quantitative techniques, otherwise it will lead to wrong
conclusions.
3 Quantitative techniques are very expensive.
4 Quantitative techniques do not take into consideration intangible facts like skill,
attitude etc.
5 Quantitative techniques are only tools for analysis and decision-making. They are
not decisions itself.

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