MODULE OF MANAGEMENT INFORMATION SYSTEM AND E-BUSINESS

FACULTY: EDUCATION

DEPARTMENT: HUMANITIES

OPTION: ECONOMICS&ENTERPRENEURSHIP

Level: IV&V

E504: MANAGEMENT INFORMATION SYSTEM

AND E-BUSINESS

By Mr. Jean Baptiste UWEMEWE (MBA and ACCA Candidate)

 Chapter I

Introduction to
Management Information Systems

Introduction

1.1Management Information System (MIS) Concept

The initial concept of MIS was to process data from the organization and presents it in the form of
reports at regular intervals. The system was largely capable of handling the data from collection to
processing. It was more impersonal, requiring each individual to pick and choose the processed data and
use it for his requirements. This concept was further modified when a distinction was made between
data and information.

The information is a product of an analysis of data. This concept is similar to a raw material and the
finished product. What are needed are information and not a mass of data. This concept was further
modified, that the system should present information in such a form and format that it creates an impact
on its user, provoking a decision or an investigation.

MIS Definition
The MIS has more than one definition, some of which are given below.

1. The MIS is defined as a system which provides information support for decision making
in the organization.
2. The MIS is defined as an integrated system of man and machine for providing the
information to support the operations, the management and the decision making function
in the organization.
3. The MIS is defined as a system based on the database of the organization evolved for the
purpose of providing information to the people in the organization.

Thought there are a number of definitions, all of them converge on one single point, i.e., the MIS is a
system to support the decision making function in the organization.

1.2 Role of the Management Information System

The role of the MIS in an organization can be compared to the role of heart in the body. The
information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure
blood to all the elements of the body including the brain. The heart works faster and supplies more
blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to
the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal
course and also in crisis.

The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is
collected from the various sources, processed, and sent further to all the needy destinations. The system
is expected to fulfill the information needs of an individual, a group of individuals, the management
functionaries: the managersandtop management.

The MIS helps the junior management personnel by providing the operational data for planning,
scheduling and control, and helps them further in decision making at the operations level.

The MIS helps the middle management in short term planning, target setting and controlling the
business functions.

The MIS helps the top management in goal setting, strategic planning and evolving the business plans
and their implementation.

The MIS plays the role of information generation, communication, problem identification and helps in
the process of decision making. The MIS, therefore, plays a vital role in the management,
administration and operations of an organization.

1.3 Impact of the Management Information System

Since the MIS plays a very important role in the organization, it creates an impact on the organization’s
functions, performance and productivity.

The impact of MIS on the functions is in its management. With a good support, the management of
finance, production and personnel become more efficient. The tracking and monitoring of the functional
targets becomes easy.

1.4 MIS and the user

Every person in the organization is a user of the MIS. The people in the organization operate at all
levels in the hierarchy. A typical user is a clerk, an assistant, an officer, an executive or a manager. Each
of them has a specific task and a role to play in the management of business. The MIS caters to the
needs of all persons.

The main task of a clerk is to search the data, make a statement and submit it to the higher level. A
clerk can use the MIS for a quick search and reporting the same to higher level. An assistant has the
task of collecting and organizing the data, and conducting a rudimentary analysis of integrating the data
from different disciplines to analyze it and make a critical comment if anything adverse is found.

The MIS offers the methods and facilities to integrate the data and report the same in a proper format.
An executive plays the role of a decision maker. He is in of responsibility and accountability a position
of a planner and a decision maker. He is responsible for achieving the target and goals of the
organization. The MIS provides facilities to analyze the data and offers the decision support systems to
perform the task of execution.

The manager has a position of responsibility and accountability for the business results. He is a
strategist and a long-term planner.

Introduction to computers

1.5 Definition of a computer

A computer is an information-processing machine. It may also be defined as a device that works under the control of
stored programs automatically accepting, storing and processing data to produce information that is the result of that
processing.

1.6 Why use computers?

Use of computers has become a necessity in many fields. Computers have revolutionized the way businesses are
conducted. This is due to the advantages that computer systems offer over manual systems.

1.7 Computer application areas

Some of the areas that computers are used include:

 Communication – Computers have also enhanced communication through email communication, electronic
data interchange, electronic funds transfer, Internet etc.
  Banking – the banking sector has incorporated computer systems in such areas as credit analysis, fund
transfers, customer relations, and online banking.

 Education– computers incorporate databases of information that are useful in organizing and disseminating
educational resources. Such E-learning and virtual or distributed classrooms have enabled the teaching
industry to have a global reach to the students.

1.8 Classification of computers

Computers can be classified in different ways as shown below:

Classification by processing
This is by how the computer represents and processes the data.

a) Digital computers are computers which process data that is represented in the form of discrete values by
operating on it in steps. Digital computers process data represented in the form of discrete values like 0, 1, 2.

b) Analog computers are used for scientific, engineering, and process-controlled purposes. Outputs are
represented in the form of graphs.

c) Hybrid computers are computers that have the combined features of digital and analogue computers.

Review questions
1) What is the scope of information system and Management Information
system?
2) Give three reasons for using computer for MIS in the organization?
3) Designing an MIS for an organization?
4) Can you think of an MIS which could be user independent and business
dependent?
5) State the difference between MIS and a computer system.
6) Take an organization of your knowledge and give a conceptual view of MIS
and physical view of MIS.
7) State which capabilities of a computer are used in MIS to create an impact.
8) Identify the nature of impact of MIS on people, organization and the
management style.
 9) If application science and MIS can be brought together, the MIS designwould
be realistic and useful. Discuss.
10) Why is MIS looked upon as a strategic need of management today?

CHAPTER II

Role and Importance of Management

2.1 Introduction to Management

Management as defined by Mary Follett is the art of getting things done through people” A manger is
defined as a person who achieves the organization’s goals by motivating others to perform and not by
performing himself.

In the process of management, a manager uses human skills, material resources and scientific methods
to perform all the activities leading to the achievement of goals.

2.2 Functions of the Manager

An individual who gets the thing done is a Manager. It is necessary to distinguish between the task and
the functions. While manager may perform the task such as accounting, selling, manufacturing,
purchasing, etc. These activities are called as tasks and not as functions. The activities that are
performed through the managerial functions are planning, organization, staffing, directing coordinating
and controlling.

 Planning is the function of management that involves setting objectives and determining a
course of action for achieving those objectives. Planning requires that managers be aware of
environmental conditions facing their organization and forecast future conditions.

 Organization is the function of management that involves developing an organizational

structure and allocating human resources to ensure the accomplishment of objectives.

 Staffing is the process of hiring eligible candidates in the organization or company for
specific positions. In management, the meaning of staffing is an operation of recruiting the
employees by evaluating their skills, knowledge and then offering them specific job roles
accordingly.
  Directing is said to be a process in which the managers instruct, guide and oversee the
performance of the workers to achieve predetermined goals. Directing is said to be the heart
of management process.

 Coordinating is the process of organizing people or groups so that they work together
properly and well.

 Controlling involves ensuring that performance does not deviate from standards. Controlling
consists of three steps, which include (1) establishing performance standards, (2) comparing
actual performance against standards, and (3) taking corrective action when necessary.

2.3 Managers and the Environment

All managers, whether they are managing a business, a school, a hospital, Government Department, or
any enterprise, work in an environment in which the organization operates. There are a number of
forces which are generated in the environment, which have an impact on the managerial performance.
These forces may be from within or from outside the organization. They affect, directly or indirectly, the
process of the management and a manager is required to meet these forces effectively. While to some
extent the internal environment is controllable, the external environment is beyond his control. For the
purpose of discussion, the external environment is classified into five classes as the economic, the
technological,the social, the political and the ethical environment.

Economic Environment
The economic environment comprises capital, labor, price changes, productivity, fiscal and monetary
policy and customers.

Capital
It is required to run the organization. The enterprise needs a long-term and a short- term capital. The
capital required can be either from the internal sources or borrowed from the financial institutions.
When a capital is borrowed, it is borrowed at an interest. The organization is forced to borrow for
various reasons and the interest charged by the lending financial institutions forms the cost of the
capital. Hence management of the capital is an important aspect of the business.

Labor
The next important cost of a business is the cost of labor. The cost of labor is determined every two
three years by a union agreement. The settlement of an agreement is based on the cost of living index,
the industry wage standards, the availability of labor, etc. These aspects are external to the organization
and a managerhas no control on them.

Price Changes
Price changes occur in the economy for various reasons. The changes occur because of decrease in the
demand and supply, the changes in the consumer behavior, in the consumption pattern and the money
supply, and so on. The price changes affect the cost of raw material and labor and on these changes a
manager has no control.

Productivity
Productivity is a result of the capital, labor and technology. The costs are affected by the technology
changes affecting the productivity. The manager has to respond quickly to the technological changes to
save the business.

Fiscal and Monetary Policy

The Government announces fiscal policies and controls them. The organization’s profit position is
affected by these policies. These policies affect the credit terms, the price of the inputs and the money
supply affecting the cash position of the organization. A manager has a very little leverage to deal with
these policy changes.
2.4 Management as a control system
Planning, organizing, staffing, coordinating, directing and controlling are the various steps in a management process.
All the steps prior to a control are necessary but are not necessarily self-assuring the results unless it is followed by a
strong control mechanism. The management experts have viewed these steps as Management Control System.

2.5 MIS: a support to the Management

The management process is executed through a variety of decisions taken at each step of planning
organizing, staffing, directing, coordinating and control. As discussed in Chapter 1, the MIS aids
decision making. If the management is able to spell out the decisions required to taken in these steps are
tabulated in Table 2.2.

Table 2.2 Decisions in Management

Steps in management Decision

Planning A selection from various alternatives- strategies,
 resources, methods, etc.

Organization A selection of a combination out of several

combinations of the goals, people, resources, method, and
authority.
Staffing Providing a proper manpower complement.
Directing Choosing a method from the various methods of
directing the efforts in the organization.
Coordinating Choice of the tools and the techniques for coordinating the
efforts for optimum results.
Controlling A selection of the exceptional conditions and the
decision guidelines.

Review questions
1. Trace the shift in management focus, starting from Frederick W Taylor to peter Drucker.
2. Take a task which you often do, and map the processes in the task against the processes
involved in management process cycle. Are you following all the steps in management
process cycle?
3. MIS supports a manager in his functional responsibilities. Explain.
4. List the external environment in which a manager operates. How many of them have a
direct impact on the management process and hence should be considered in the MIS
design?
5. Explain the importance of management by exception. Can it be the only approach in
managing the business?
6. List the decision involved in each phase of management process, starting from planning
to control.
7. Explain the role of performance standard and feedback” in effective managementof
business.

Chapter III
 Process of Management

3.1 Management effectiveness

“Negandhi Estafen” provides a good model for the analysis of management effectiveness which
generates enterprise effectiveness in achieving the goals and objectives. The model puts a lot of
emphasis on the management philosophy and the environment factors on which the effectiveness is
dependent. The environment factors provide the opportunities to survive and grow with certain
constraints, while the management philosophy sets the guidelines for deciding the management
practices to run the enterprise.

Goals, Objectives and Targets

The process of management begins with setting of goals, objectives and targets. The goals are long-
term aims to be achieved by the organization objective are relatively short term milestones to be
accomplished, while the targets generally refer to physical achievements in the organization’s business.
The goals, objectives and targets are so set.

3.1 Planning
Planning is basic to all managerial functions. It is a process of selecting one course of action from
different alternatives, for achieving the stated goals, objective and targets. It is a decision making
process determining in advance what to do, when to do, how to do what is to do.

3.2 Organizing
Organizing is an important step in the managerial process and relates to the people in an enterprise. It
deals with a quantitative and a qualitative aspect of manpower in terms of placement, the roles and the
relations amongst them, with the aim that they work together effectively towards accomplishing the
goals, objectives and the targets of the organization. In essence, it deals with organizing the
manpower resources for a givenplan of execution.

3.3 Staffing
The function of staffing deals with manning the enterprise as per the organization structure so that they
together implement the process of the management. Staffing involves not only selection of a person but
also appraisal and development so that they perform their designated roles. The selection of a person is
a difficult task. However, the chances of selecting a wrong person are very less if a proper method
is used.
3.4 Coordinating and Directing
The manager’s role, in this situation, is to coordinate all the activities and provide leadership to the
group to keep the plan moving. Directing and leading are the methods, whereby the subordinates are
lead to understand the purpose of the activity, and by way of guidance, a direction is given to them to
march towards the goals. The task of directing and leading becomes more effective if the human side of
the enterprise is taken care of by motivating the people. The manager is required to create an
environment in which everybody can perform their best. The work environment becomes conducive to
good performance if work becomes satisfying and provides an opportunityto expand the scope of work
and his influence.

3.5 Controlling
The last but the most important step in the process of management is controlling, the successful
execution of management plan. Without control, the process becomes unproductive. The purpose of
control is to regulate the process in such a way that the management process continuously strives for the
achievement of the goals, objectives andtargets.

Review questions
1. Explain how management practices are influenced by theManagement philosophy.
2. Explain how practices change with the change in the environment.
3. Show the relationship of organization effectiveness to management effectiveness.
4. Can you state goal, objective and targets which you have set for careermanagement?
What is the qualitative difference between them?
5. Can attitudes be changed? What role can MIS play in this endeavor?
6. A plan without a strong control feature is destined to fail. Why?
7. Where should be the control system strong ñ in feedback loop or in measurement of
standards?
8. Distinguish between top management plan, middle management plan andoperations
management plan in terms of goal scope and content.
9. The manager has a leadership role to play. How can MIS support this role?
10. Is it necessary that management should be efficient or effective, or both. Can
management afford to be one and not both?

Chapter IV
 Organization Structure and Theory

4.1 Basic model of organization structure

The word organization means two things. The first meaning of the word organization is an institution or
a functional group. The organization structure is built on four basic principles, hierarchy of authority,
specialization, standardization or formalization and, centralization.

Hierarchy of Authority
The authority is measured on the basis of command on control of resources, the risk of business, and the
decision making power to manage the risk and rewards.

Specialization

The second principal of building organization structure is specialization. Specialization can be decided
in a number of ways, arranging all similar and associated tasks under one head. For example, a business
organization can be structured on the specialization such as Manufacturing, Marketing, Accounting and
Personal. A hospital can be structured on the basis of specialization such as General Medicine, Surgery.

Standardization (Formalization)
The purpose of standardization or formalization is to make a person in an organization independent,
whereby the interaction between the individuals in the organization is minimum. The people work on
the basis of rules, procedures, systems, guidelines and policies.

Centralization
Centralization refers to the location or position where the decision-making center is localized. In a
highly centralized organization, the decision making is at the top while decentralized refers to the
transfer of authority from a central government to a sub-national. When business risks are high and
difficult to manage, the organization emerges ascentralized.

Review questions
1. Draw an organization chart of a company known to you. How would you
describe it product, project Functional, or Matrix?
2. What are the parameters on which an organization is structured?
3. Explain the term: Span of control and Line of authority.
4. What is the meaning of formal organization and informal communication?
 5. Can any business be organized only in one or the other organization model? Justify
your answer.
6. Which all factors will you take up for change if the organization behavior is to change
for the better? Which factor is easy to handle and which is most difficult?
7. Why does an organization need periodical review? Which factors would suggest that
the organization needs a change?

8. Explain how is organization a system where inputs are processed to get adesired
output?
9. What is a goal displacement? Why does it occur? How does the organizationhandle
goal displacement?
10. Why does the organization structure differ from company to company eventhough
they are in same business and industry?

Chapter V

5.1 Decision Making

The Problems in Making Rational Decisions

(a) Ascertaining the problem

As Peter Drucker points out, the most common source of mistakes in the management decisions is the
emphasis on finding the right answers rather than the right questions”. The main task is to define the
right problem in clear terms. The management may define the problem as the Sales are declining”.
Actually, the decline of sales is symptomatic; the real problem may be somewhere else. For example the
problem may be the poor quality of the product and you may be thanking of improving the quality of
advertising.

(b) Not enough time to be rational

The decision maker is under pressure to make decisions. If time is limited, he may make a hasty
decision which may not satisfy the test of rationality of the decision. Hasty decisions often lead to more
problems. It takes time to do the necessary research and make an educated decision to solve any
problem, which is why it's usually better to wait and make no choice immediately than make the
wrong decision and pay for it later

(c) Other limitations

Other limitations are the need for a compromise among the different positions, poor communications
and human behavior. How do we then ensure rationality (logic)? It is ensured, if the process of decision
making is carried out systematically, whereby all the aspects of the decision making discussed above are
taken care of.

5.2 Behavioral concepts in decision making

A manager, a human being, behaves in a peculiar way in a given situation. The response of one manager
may not be the same as that of the two other managers, as they differ on the behavioral platform. Even
though tools, methods and procedures are evolved, the decision is many a times influenced by personal
factors such as behavior.

5.3 Organization decision making

An organization is an arrangement of individuals having different goals. Each individual enjoys
different powers and rights because of his position, function and importance in the organization. Since
there is an imbalance in the power structure, the different individuals cannot equally influence the
organizational behavior, the management process and the setting of business goals.

5.4 MIS and decision making concepts

It is necessary to understand the concepts of decision making as they are relevant to the design of the MIS.
The Simon Model provides a conceptual design of the MIS and decision making, wherein the designer has
to design the system in such a way that the problem is identified in precise terms. That means the data
gathered for data analysis should be such that it provides diagnostics and also provides a path to bring the
problem to surface.

Review questions
1. Why do decision making situations arise?
2. Identify few decisions in your life, where the outcomes were known with certainty, riskAnd
uncertainty.
 3. Why do two people disagree on the choice of a decision? Is it then better to resort to?
Programmable decision making?
4. Why is more time spent in problem analysis and problem definition as compared to theTime
spent on decision analysis?
5. If a person is indecisive, is it due to lack of information support or some human factorsOr
both?
6. Why does the decision maker resort to bounded rationality in a decision making situation?Can a
decision be called as right or wrong? What is the measure of correct decision?
7. Can you automate the process of decision making? The answer is ëYesí and ëNoí.
Explain. What best must be aimed at?
8. Explain the role of a model in problem solving. Explain the process of abstraction usedin
constructing the model.
9. List the different criteria which can be used in decision making.
10. Can the quality of decision making be improved? Explain how it can be improved.

Chapter VI

Information

6.1 Information concepts

The word information is used commonly in our day to day working. In MIS, information has a precise
meaning and it is different from data. The information has a value in decision making while data does not
have. Information brings clarity and creates an intelligent human response in the mind.

In MIS a clear distinction is made between data and information. Data is like raw materials while the
information is equivalent to the finished goods produced after processing the raw material.

Information Presentation

Presentation of the information is an art. The data may be collected in the best possible manner and
processed analytically, bringing lot of value in the information; however, if it is not presented properly, it
may fail to communicate anything of value to the receiver.
Bias in information

While choosing the appropriate method of communicating information a care has to be taken to see that is
not biased. For example, while using the techniques of classification or filtering the information, it should
not happen that certain information gets eliminated or does not get classified. This bias enters because
people try to block sensitive information which affects them.

6.2 Information: A quality product

Information is a product of data processing. Even if we take care of the aspects discussed in the above
section, the manager will determine the quality of the information based on the contribution it provided for
effective decision making. The quality of information is high, if it creates managerial impact leading to
attention, decision and action.

6.3 Classification of the information

The information can be classified in a number of ways provide to a better understanding.

John Dearden of Harvard University classified information in the following manner:

Recurring versus non-recurring information

The information generated at regular intervals is recurring information. The monthly sales reports, the
stock statements, the trial balance, etc. are recurring information. The financial analysis or the report on the
market research study is non-recurring information.

Internal versus external information

The information generated through the internal sources of the organization is termed as internal
information, while the information generated through the Government reports, the industry surveys, etc. is
termed as external information, as the sources of the data are outside the organization.

6.4 Methods of data and information collection

Several methods are available for the collection of data. The choice of method will have an impact on the
quality of information. Similarly the design of data collection method also decides the quality of data and
information. The methods of data collection and processing become a part of the MIS.

6.5 Value of the information

The decision theory suggests the methods of solving the problems of decision making under certainty
(quality), risk and uncertainty (lack of knowledge). A decision making situation is of certainty when the
decision maker has full knowledge about the alternatives and its outcomes. This ispossible when perfect
information is available.

6.6 General model of human as an information processor

A manager or a decision maker uses his sensory receptors, normally eyes and ears, to pick up
information and transmit them to brain for processing and storage. The result of this processing will be
a response which may be a decision, an action or at least recognition of the event for future use. Hence,
a manager can be said to be an information processor.

6.7 MIS and the information concept

The goal of the MIS should be to provide the information which has a surprise value and which reduces the
uncertainty. It should simultaneously build the knowledge base in the organization by processing the data obtained
from different sources in different ways.The designer of the MIS should take care of the data problems knowing
that it may contain bias and error by introduction of high level validations, checking and controlling the procedures in
the manual and computerized systems.

Review questions
1. Since your school days, you have purchased number of books and your home library has over two
hundred books. Would you call this awareness of your as a data or information? How would you call
convert this awareness into information?
2. Explain why information has no specification but it has a character and value.
3. Can value of information be improved? Can information have a value which is person
independent?
4. Explain the difference between data processing and information processing.
5. What is information overload? How does it occur? And how would you control it?
6. The trend now is to improve data quality, increase storage and offer distributed access; andleave
the processing of data to the user of the information. Why?
7. The character and value of information is linked to the people in the organization and tothe
management process in the organization. Explain.
8. Explain how quality of information improves the knowledge and decision makingcapability of
the people.
9. Is it worth to invest for obtaining perfect information? Is it possible to specify the perfect
information?
 10. Take up a project in a known organization and identify the information in followingclasses:
● Organizational,
● Strategic,
● Knowledge,
● Planning, and
● Control.
Chapter VII

Choice of Information Technology

7.1 Nature of IT decision

A business enterprise or an organization requires making a decision of choosing appropriate information
Technology (IT), as a vehicle, to handle the management information system. The choice of IT is a
strategic decision, making long-term impact on the effectiveness of the MIS of the enterprise. The
information technology affects the people, the processes and the productivity of the organization.

Just as the MIS handles the decision support applications, the choice of the Information Technology
makes a qualitative difference in the decision making process. Hence, a wrong choice of the IT would
kill a good MIS design as the information technology would not support the user on the aspects and the
requirements such as speed, response, access, security and integration of the information processing on
the different hardware, software platforms. The choice of information technology can be compared to a
decision of constructing a house.

7.2 Information Technology implementation plan

The implementation of the information technology is a complex task and needs a detailed and careful
planning for successful implementation. It is necessary to prepare a plan of implementation covering the
following features. These features are:

7.2.1 Site preparation

7.2.2 System development plan
7.2.3 Information technology installation schedule
7.2.4 Recruitment and training of computer personnel
7.2.5 Training of the users
7.2.6 Investment plan

Site Preparation
This is a major activity, wherein you prepare the site for the physical installation of the hardware i.e.,
the main computer system, the peripherals, the electrical and communication cabling, the air
conditioning system, the tape-disk consumable storage, and the office layout for the professionals.

System Development Plan

It includes the overview of how the systems engineering and downstream (the direction in which a stream or river
flows) engineering activities will proceed. This is a key document for the coordination of many worker roles within
the project.

Information Technology Installation Schedule

This schedule gives the item-wise details of the hardware arrival and its installation, testing and
acceptance. It also needs to be linked with the information system development plan to synchronize the
installation with the user of the hardware and the software. Many times the schedule also considers key
issues like data conversion, switching over from an old system to a new system, rewriting programmer
for new software environment and so on. Such schedule also helps in the smooth transition from old to
the new. It may be from one information technology to another information technology environment or
from the manual system to the computerized system.

Recruitment and Training of Information Technology Personnel

The implementation of the information technology needs specific skills in the manpower responsible for
effective implementation. The skills may fall in the area of languages, tools of development and also
acquiring the precise know-how on the emerging technologies and its application in the information
systems. Such recruitment and training then calls for restructuring of the information technology
organization.

Training of Users
The latest development in the information technology requires its users to be well trained for its
effective use. The training may range from awareness to learning of the specific tools. The users should
be trained to use the various information technology facilities.
Investment Plan
When all the facets of the information technology implementation are ready, it is possible to work out
the monetary implications such an implementation. It is important to note that the intermediate
information technology solution to save on the investment is not effective. If there are any budgetary
limitations, it is better to postpone the implementation.

7.3 Choice of the Information Technology and the Management Information System
The choice of the information technology is a backbone of the Management Information System. It is a
critical, strategic decision affecting the business operations and prospects. It affects the people, the
processes and productivity and helps organization emerge with a new work culture. Since, it is a high
investment decision; the management would look at it from the return it yields (produce) in the
business.

The success of the MIS lies in how the information technology is implemented in the organization. A lot
depends on the people and their ability to accept the new work style and the new work culture. All the
implementation of the information technology leads to organizational transformation in the content and
structure.

Review questions

1. The selection of information technology is a strategic decision in MISdevelopment.

Explain.
2. What are the technology decisions? And what is their relevance?
3. What is a configuration of IT platform when it comes to MIS? Why should the
configurations be determined?
4. Which are the three parameters used in the evaluation of the IT before decision ismade?
5. Why is the operational feasibility of the IT system important?
6. What methods are available to contain the investment in IT to the budget availability
without compromise on the plan or quality of the MIS?
7. MIS implementation is use of IT in business processes is a cultural change in the
organization. How would you handle it for smooth changes over fromconventional to
technology-based management?
8. Technology obsolescence is a fact of life when it comes to IT. While deciding
configuration, what care should be taken so that the investment is protected for a
 reasonable period of time; application development effort is not wasted and organization
is not required to learn a new technology again and again.
9. Top management always asks for return on investment (ROI) made in IT. How would
you calculate ROI in IT? What other measures would you suggest for evaluating the
investment in IT?
10. How does the work culture, management style and the organization’s learning
capability have a bearing on the IT or MIS decision?

Chapter-8

Enterprise Management System (EMS)

Computer, electronics, communication, and audio video technologies have converged closely to
produce a new style of operating business. The dynamic business environment of today is full of
challenge and opportunities. The dependence on the information, as driving energy source, is
increasing. Every business activity has additional dimensions, such as speed and time.

Enterprise management systems are large -scale software packages that track and control the
complex operations of a business. They are used as a central command center, automating
the organization and making it convenient to prepare reports and make decisions.

8.1 The 3 Types of Enterprise Systems

1. Customer Relationship Management

Customer relationship management (CRM) is a software that helps organizations present a consistent message about
customer insights by gathering the latest information about a lead. Collections of data for CRM software usage
happen at each step of a presale process, including sales and marketing, call centers, help desks and customer support
service.

2. Enterprise Resource Planning

Enterprise Resource Planning (ERP) is designed to facilitate a company’s cross-functional processes. This software
allows companies to eliminate inconsistencies and duplications of efforts during operations, share data, standard
practices across enterprises and access information in a real-time environment.

What is Enterprise Resource Planning Used For?

In selecting an enterprise resource planning platform, organizations should consider the various ERP modules that
align with their strategic, economic and technical goals. Let’s take a closer look at some of those functional areas:

 Manufacturing: Engineering, scheduling capacity, quality control, and workflow and product life
management are among core functions that can fall within an ERP system’s manufacturing module.

 Accounting/Finance: By streamlining cash management tasks and other accounting functions, ERP systems
can offer businesses real-time data performance and insights while ensuring compliance with financial
regulations.

 Human Resources: Human resources modules within an ERP system can include tools to gather and
interpret data on training, recruiting, payroll, benefits, retirement and diversity management. HR managers
can also monitor and measure key performance indicators (KPIs) for individual employees, job roles and
departments.

3. Supply Chain Management Systems

The third type of enterprise application is supply chain management systems. A supply chain refers to the collection
of people, tasks, equipment and other resources required to produce and move products from a vendor to a customer.
These management systems facilitate integrated partnerships amongst all the goods, services and customers points.
The main goal for supply management systems is to coordinate the timely flow of information in the upstream and
downstream of an organization. Some management systems may feature functions for purchasing, inventory
management, product configuration, supplier scheduling, goods inspections, claims processing and warehousing.
8.2 The purpose of enterprise system management
Enterprise Systems Management (ESM) is concerned with control, monitoring and the management of IT
infrastructure and applications in order to optimize IT service delivery

8.3 Costs and Benefits of Enterprise Systems

The fundamental purpose of an enterprise system is the advantage of business module integration. This seems
straightforward enough but is reflected in many aspects of the business:
 Management can easily access information to make data-driven decisions quickly.
 Data becomes visible and accessible across the entire organization.
 Automation of transactions brings more efficiency to day-to-day processes.
 There is improved transparency of data and department practices.
 There is ease of obtaining records for audits and compliance.

Chapter-9

E – Business

9.1 What is E-Business?

Electronic business, or e-business, is the application of information and communication technologies ICT in support
of all activities of business. E-business refers to a broader definition of e-commerce, not just buying and selling of
goods and services, but also servicing customers, collaborating with business partners and processing electronic
transactions. Electronic business methods enable companies to link their internal and external data processing
systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs
and expectations of their customers.

9.2 The different between E-Business and E-Commerce

E-Business
 E-business is superset of E-Commerce
 E-business includes all kinds of pre-sale and post-sale efforts
 E-business covers internal process such as production, Inventory management, product development, finance etc
 E-business involves the use of CRM’s, ERP’s that connect different business processes

E-Commerce
 E-commerce is subset of E-business
 E-commerce just involves buying and selling of products and services
 E-commerce covers outward facing processes that touch customers, suppliers and external partners
 E-commerce usually requires the use of just a website

To put it simply, Electronic Business (E-Business) is the administration of conducting any business using internet,
extranet, web and intranet. This would include buying and selling of goods or services using commercial transactions
conducted electronically along with providing customer or technical support with the help of the internet. E-business
is similar to E-commerce but it is more than just a simple act of buying and selling services or goods online. In fact, it
is the method of utilizing digital information and advanced communication technologies to streamline different
business processes – from the initial to implementation phase. E-business includes a lot of business processes
including online order processing, CRM (Customer Relationship Management), supply chain management and many
more. E-commerce is a part of e-business, so let me give you a comprehensive detail about what is e-business.

9.3 Impact of E-Business on Business

 Direct sales to customers

 Anytime access from anywhere
 Customization of products ie. action of modifying something to suit a particular individual or task
 Quicker time to market
 Lower stock outs ie. Making sure you always have inventory
 Price discrimination ie. Similar goods and services are transacted at different prices by the same provider in
different markets

9.4 Advantages of E-Business

 Worldwide presence
 Cost-effective marketing and promotions i.e. producing good results without costing a lot of money
 Better customer service
  Developing a competitive strategy
 Curtailing of transaction cost i.e. cut down or reduce

9.5 Challenges in E-Business

The rapidly changing business environment has led several companies to adopt e-commerce. E-Business brings about
a lot of changes in the way firms work. It also throws up challenges that they have to meet in order to reap the
benefits of e-commerce. The various challenges to businesses include technological challenges, legal and regulatory
challenges, behavioural and educational challenges, and other miscellaneous challenges. Various issues pertaining to
the implementation of new technology include security issues, choice of Internet payment instrument and its inter-
operability, inter-operability of technology and technological application, comparative buying capabilities, richness
and depth of information available over the Internet, lack of reliable network infrastructure, lack of e-commerce
standards, deployment of public key infrastructure to enable identity authentication, technical integration of new
technology with existing applications, and high cost of bandwidth. Challenges associated with legal and regulatory
framework include the difficulty in regulating and enforcing standards, due to lack of consistent rules and policies;
customs and taxation uncertainties; and government intervention.

Changes in attitudes of consumers result in behavioural challenges to businesses. These challenges include lack of
trust of customers and their fear of intrusion of privacy which makes them reluctant to involve in e-transactions. In
addition, the rampant frauds taking place over the Internet and lack of awareness of customers about the availability
of services poses a challenge to businesses. Miscellaneous challenges such as channel conflict, the problem of
attracting and retaining a critical mass of customers, and the need to improve the order fulfilment process, are the
other aspects that have become a cause of worry to businesses.

End of module.