MODIBBO ADAMA UNIVERSITY, YOLA

FACULTY OF SOCIAL AND MANAGEMENT SCIENCES

DEPARTMENT OF INFORMATION TECHNOLOGY

MANAGEMENT INFORMATION SYSTEM (IMT308)

LECTURE NOTES

COMPILED BY: MALAM ABDULWAHAB SHEHU

2022/2023 SESSION
 COURSE CONTENTS
1. INTRODUCTION
2. INFORMATION SYSTEM
3. BUSINESS PROCESS AND INFORMATION SYSTEMS
4. TYPES OF INFORMATION SYSTEM
5. MANAGEMENT INFORMATION SYSTEMS (MIS)
6. THE FUNCTIONS OF MIS IN AN ORGANIZATION
7. COMPONENTS OF MANAGEMENT INFORMATION SYSTEMS
8. CHARACTERISTICS OF MIS
9. DEVELOPMENT OF MANAGEMENT INFORMATION SYSTEMS
10. THREATS AND VULNERABILITIES OF MANAGEMENT INFORMATION
SYSTEMS
11. INFORMATION SECURITY MEASURES AND BEST PRACTICES IN MIS
12. MANAGEMENT INFORMATION SYSTEMS TOOLS USED IN AN
ORGANIZATION
13. INFORMATION SECURITY IN MANAGEMENT INFORMATION SYSTEMS
14. INTERNET, INTRANET, AND EXTRANET
15. MANAGING DIGITAL FIRMS
E-COMMERCE
E-BUSINESS

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 INTRODUCTION
Management Information System is an acronym of three words, viz., Management, Information,
and System to fully understand the term MIS, let us try to understand the three concepts terms
that made it up.

Management: Management is the art of getting things done through and with the people in
formally organised groups. Every business unit has some objectives of its own. These objectives
can be achieved with the coordinated efforts of several personnel. The works of a few persons
are properly coordinated to achieve the objectives through the process of management.
Management is a vital aspect of the economic life of man, which is an organised group activity.
It is considered as the indispensable institution in the modern social organisation marked by
scientific thought and technological innovations.
A manager is thus someone who defines, plans, guides, helps, and assesses the work of others.
The following mentioned management functions will involve creative problem solving.

Figure 1: Management hierarchy

Managerial functions of MIS
 Planning: According to Terry and Franklin, “planning is selecting information and making
assumptions concerning the future to put together the activities necessary to achieve
organizational objectives.” Planning includes both the broadest view of the organization,
e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.
 Organising: Organizing is the classification and categorization of requisite objectives, the
grouping of activities needed to accomplish objectives, the assignment of each grouping to a
manager with the authority necessary to supervise it, and the provisions for coordination
horizontally and vertically in the organization structure. The focus is on separation,
coordination, and control of tasks and the flow of information inside the organization. It is in
this function that managers allocate authority to job holders.
 Staffing: Staffing function requires recognition of human resource needs, filling the
organisational structure and keeping it filled with competent people. This function includes
recruiting, training; evaluating and compensating are the specific activities.

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  Directing: Direction is telling people what to accomplish and seeing that they do it to the
finest of their capability. It includes making assignments, corresponding procedures, seeing
that mistakes are corrected, providing on the job instruction and, of course, issuing orders”.
The purpose of directing is to control the behaviour of all personnel to accomplish the
organisation's mission and objectives while simultaneously helping them accomplish their
own career objectives.
 Controlling: Control is the course of action that measures present performance and guides it
towards some predetermined goal. The essence of control lies in checking existing actions
against some desired results determined in the planning process.
Information: Information is data that is processed and is presented in a form which assists
decision-making. It may contain an element of surprise, reduce 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 organised and may not add
anything to our knowledge.
Information could be classified based on the purpose for which it is utilised, into three main
categories:
 Strategic information: it is required by the managers at the strategic level of management
for formulation of organisational strategies.
 Tactical information: information in this category is used in short term planning and is of use
at management control level.
 Operational information: it applies to short periods which may vary from an hour to a few
days.
System: The term system is the most loosely held term in management literature because of its
use in different context. However, a system can be defined as a set of elements which are
joined together to achieve a common objective or goal. The elements are interrelated and
interdependent. The set of elements for a system may be understood as input, process, and
output. Also, a system has one or multiple inputs; these inputs are processed through a
transformation process to convert them into outputs.

The three elements of a system are:

 Input
 Process
 Output
INFORMATION SYSTEMS
Definition of Information Systems: The An information systems as a set of interrelated
components that collect, process, store, and distribute information to support decision making
and control in an organization.

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 BUSINESS PROCESSES AND INFORMATION SYSTEMS
Business processes and information systems are interrelated components that work together to
achieve organizational goals and objectives. Here is a detailed explanation of business
processes and information systems:

Business Processes: A business process is a series of tasks that are completed in order to
achieve a specific goal for a business. Business processes can be simple or complex, and they
can involve one or more departments within an organization. Examples of business processes
include order processing, inventory management, and customer service.

Information Systems: An information system is a combination of hardware, software, and

telecommunications networks that people build and use to collect, create, and distribute useful
data, typically in organizational settings. Information systems are used to collect, process, store,
and disseminate information to support decision making, coordination, control, analysis, and
visualization in an organization. Examples of information systems include transaction
processing systems (TPS), management information systems (MIS), and decision support
systems (DSS).

Business processes and information systems are closely related. Information systems are
designed to support and enhance business processes. They provide tools and technologies to
automate routine tasks, improve operational efficiency, and support decision-making. Business
processes, on the other hand, provide the context and purpose for information systems. They
define the goals and objectives that information systems are designed to achieve.

TYPES OF INFORMATION SYSTEMS

There are several types of IS, each designed to support different levels of management in an
organization. Here are the types of Information Systems in detail:

1. Transaction Processing System (TPS): TPS is a type of MIS that supports the operational level
of an organization. It is used to process and record transactions, such as sales, payments, and
inventory updates. TPS is designed to handle large volumes of data and ensure data accuracy
and consistency. An example of TPS is a point of sale system used in a retail store.

2. Management Information System (MIS): MIS is a type of MIS that supports the middle level
of an organization. It is used to provide managers with information to monitor and control the
organization's performance. MIS analyzes data from TPS and other sources to produce reports
and summaries that managers use to make decisions. An example of MIS is a sales report that
shows the sales performance of a product over a period of time.

3. Decision Support System (DSS): DSS is a type of MIS that supports the upper level of an
organization. It is used to provide managers with tools to make strategic decisions. DSS uses

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data analysis and modeling techniques to support decision-making. An example of DSS is a
financial forecasting tool that helps managers predicts future financial performance based on
historical data.

4. Office Automation System (OAS): OAS is a type of MIS that supports the knowledge level of
an organization. It is used to automate routine office tasks, such as email, word processing, and
scheduling. OAS improves productivity and efficiency by reducing manual work. An example of
OAS is a document management system that stores and organizes documents electronically.

5. Knowledge Work System (KWS): KWS is a type of MIS that supports the knowledge level of
an organization. It is used to support the work of professionals, such as engineers, scientists,
and designers. KWS provides tools and technologies to support knowledge creation, sharing,
and collaboration. An example of KWS is a computer-aided design (CAD) system used by
engineers to design products.

6. Executive Support System (ESS): ESS is a type of MIS that supports the strategic level of an
organization. It is used to provide executives with tools to make strategic decisions. ESS
provides high-level summaries and visualizations of data to support decision-making. An
example of ESS is a dashboard that shows key performance indicators (KPIs) of the organization.

MANAGEMENT INFORMATION SYSTEMS (MIS)

Management Information Systems (MIS) is a field of study that focuses on the use of
technology to manage and process data to support decision-making. MIS is an interdisciplinary
field that combines business, computer science, and information technology. MIS professionals
are responsible for designing, implementing, and managing information systems that support
organizational goals and objectives. Management Information Systems (MIS) refer to the
organized collection, processing, storage, and dissemination of information to support decision-
making and facilitate the management of an organization.
MIS helps organizations to plan, control, and makes informed decisions by providing accurate,
timely, and relevant information, MIS plays a crucial role in providing managers at all levels with
the information they need to make informed decisions. Different types of decisions, such as
strategic, tactical, and operational, require various levels of information from MIS to ensure
effective planning and execution. MIS helps organizations achieve competitive advantage by
enabling them to respond quickly to changes in the business environment.
Management Information Systems (MIS) are computer-based systems that provide
management with tools to organize, analyze, and access data. MIS is used for decision-making,
coordination, control, analysis, and visualization of information in an organization. The
functions of MIS in an organization include:

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 Collecting and Storing Data: MIS collects and stores data from various sources, such as internal
and external databases, to provide a comprehensive view of the organization's operations. This
data can be used to make informed decisions and improve business processes.
Processing and Analyzing Data: MIS processes and analyzes data to provide meaningful insights
into the organization's performance. This includes generating reports, creating dashboards, and
conducting data analysis to identify trends and patterns.
Providing Information to Management: MIS provides information to management in a timely
and accurate manner. This information can be used to make informed decisions, monitor
operations, and improve strategies.
Supporting Business Processes: MIS supports various business processes, such as order
processing, inventory management, and customer relationship management. It provides tools
and technologies to automate these processes and improve operational efficiency.
Enhancing Communication and Collaboration: MIS enhances communication and collaboration
within the organization by providing tools and technologies for sharing information and
collaborating on projects. This includes email, instant messaging, video conferencing, and
collaboration software.
Ensuring Information Security and Privacy: MIS ensures the security and privacy of sensitive
information by implementing security measures such as firewalls, antivirus software, and
encryption. It also ensures compliance with data protection regulations and privacy policies.

Characteristics of MIS
 Systems Approach: The information system follows a systems approach. Systems approach
means taking a comprehensive view or a complete look at the interlocking sub-systems
that operate within an organisation.
 Management Oriented: Management oriented characteristic of MIS implies that the
management actively directs the system development efforts. For planning of MIS, top-
down approach should be followed. Top down approach suggests that the system
development starts from the determination of management’s needs and overall business
objective. To ensure that the implementation of systems polices meet the specification of
the system, continued review and participation of the manager is necessary.
 Need Based: MIS design should be as per the information needs of managers at different
levels.
 Exception Based: MIS should be developed on the exception based also, which means that
in an abnormal situation, there should be immediate reporting about the exceptional
situation to the decision –makers at the required level.
 Future Oriented: MIS should not merely provide past of historical information; rather it
should provide information, on the basis of future projections on the actions to be
initiated.

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  Integrated: Integration is significant because of its ability to produce more meaningful
information. Integration means taking a comprehensive view or looking at the complete
picture of the interlocking subsystems that operate within the company.
 Common Data Flow: Common data flow includes 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 from a practical
angle.
 Long Term Planning: MIS is developed over relatively long periods. A heavy element of
planning should be involved.
 Sub System Concept: The MIS should be viewed as a single entity, but it must be broken
down into digestible sub-systems which are more meaningful.
 Central database: In the MIS there should be common database for whole system.
COMPONENTS OF MANAGEMENT INFORMATION SYSTEMS
The Components of Management Information Systems (MIS) are the building blocks that work
together to collect, process, store, and disseminate information to support decision-making,
coordination, control, analysis, and visualization in an organization. Here are the components of
MIS in detail:
1. Hardware: Hardware refers to the physical components of an information system. It includes
devices such as computers, servers, routers, storage devices, and peripherals. Hardware
provides the infrastructure for processing and storing data. For example, a computer server is a
hardware component that stores and processes data in an organization's network.

2. Software: Software refers to the programs and applications that run on the hardware. It
includes operating systems, database management systems, enterprise resource planning (ERP)
software, and other specialized applications. Software enables the manipulation, analysis, and
presentation of data. For example, a customer relationship management (CRM) software is a
software component that helps manage customer data and interactions.

3. Data: Data is the raw facts and figures that are collected and processed by an information
system. It can be structured or unstructured and can come from various sources, such as
databases, documents, sensors, and external systems. Data is the foundation for generating
meaningful information. For example, customer sales data and inventory levels are examples of
data used in an information system.

4. People: People are the users, stakeholders, and personnel involved in the management and
use of the information system. They include system administrators, analysts, managers, and
end-users. People interact with the system, input data, make decisions, and use the
information generated by the system. For example, employees who input sales data into the
system or managers who use reports generated by the system are people components of MIS.

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5. Processes: Processes refer to the procedures, rules, and workflows that govern how data is
collected, processed, stored, and disseminated within the information system. Processes
ensure that data is accurate, consistent, and secure. They define the sequence of activities and
the rules for data manipulation. For example, an order processing workflow that outlines the
steps from receiving an order to shipping the product is a process component of MIS.

These components work together to create an integrated and effective Management

Information System. Hardware provides the infrastructure, software enables data manipulation,
data serves as the foundation, people interact with the system, and processes ensure efficient
and secure data management.

DEVELOPMENT OF MANAGEMENT INFORMATION SYSTEMS

The development of Management Information Systems (MIS) involves several stages that are
essential for the successful implementation of the system. Here are the stages of developing
Management Information Systems with examples:
1. System Survey: This stage involves identifying the problems facing the organization and the
system it has. The team will look for any opportunities that can be done to overcome these
problems. For example, a company may identify that its inventory management system is
inefficient and requires improvement.

2. Needs Analysis: This stage involves determining the requirements of the MIS in the context
of the organization. It should keep pace with changes in the environment, changing demands of
the customers, and growing competition. For example, a company may determine that it needs
a new inventory management system that can handle larger volumes of data and provide real-
time updates.

3. Design: This stage involves designing the MIS based on the requirements identified in the
previous stage. It includes designing the hardware, software, and network components of the
system. For example, a company may design a new inventory management system that
includes a cloud-based database, a user-friendly interface, and real-time reporting.

4. Implementation: This stage involves installing and configuring the hardware and software
components of the MIS. It also involves training employees on how to use the system. For
example, a company may install the new inventory management system and provide training to
employees on how to use it.

5. Testing: This stage involves testing the MIS to ensure that it meets the requirements and
functions as intended. It includes testing the system for accuracy, reliability, and security. For
example, a company may test the new inventory management system to ensure that it
accurately tracks inventory levels and provides real-time updates.

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6. Change and Maintenance: This stage involves making changes to the MIS based on feedback
from users and ongoing maintenance to ensure that the system continues to function properly.
For example, a company may make changes to the inventory management system based on
feedback from employees and perform regular maintenance to ensure that the system remains
up-to-date.

THREATS AND VULNERABILITIES OF MANAGEMENT INFORMATION SYSTEMS

Management Information Systems (MIS) are vulnerable to various threats that can compromise
their security and integrity. Here are some of the threats and vulnerabilities of MIS:
1. Hardware and software failure: These can cause disruptions and loss of data.
2. User Errors: These can include introducing faulty data or improperly processing data.
3. Physical Disasters: These can include floods, fires, power failures, and other electrical
problems.
4. Theft of data: This can occur through hacking or social engineering.
5. Cyberterrorism and cyberwarfare: Terrorists or foreign intelligence services could
exploit network or Internet vulnerabilities to commit cyberterrorism or cyberwarfare
and cripple networks controlling essential services such as electrical grids and air traffic
control systems.
6. Insider threats: The largest financial threats to businesses actually come from insiders,
either through theft and hacking or through lack of knowledge.
7. Software Errors: Hidden bugs or program code defects can cause performance issues
and loss of productivity.
8. Weak Security: Technology with weak security can lead to theft of data or information.
9. Social media attacks: Cyber criminals can identify and infect a cluster of websites that
persons of a particular organization visit, to steal information.
10. Mobile malware: Malware can be installed on mobile devices to steal data or
information.
To mitigate these threats and vulnerabilities, organizations need to establish a vulnerability
management system and develop a cybersecurity strategy. They also need to classify
information into public, protected, and restricted types and implement system access policies.
Additionally, they need to remain vigilant and keep up-to-date with the latest security threats
and potential attacks.

INFORMATION SECURITY MEASURES AND BEST PRACTICES IN MIS

Information security measures are crucial for protecting sensitive data and ensuring business
continuity. Here are some of the best practices for managing information systems:
1. Security Policies: Organizations should implement security policies as a form of
administrative control. These policies should lay out the guidelines for employee use of the

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information resources of the company and provide the company recourse in the case that an
employee violates a policy.
2. Information Security Controls: These are measures taken to reduce information security risks
such as information systems breaches, data theft, and unauthorized changes to digital
information or systems. Types of information security controls include security policies,
procedures, plans, devices, and software intended to strengthen cyber security.
3. Data Backup: A data backup process is the most critical type of data security measure. It is
done by copying or archiving data files. As a result, you can retrieve data in case of a data loss
event.
4. Firewalls: A firewall is a network security system that monitors and controls incoming and
outgoing network traffic based on predetermined security rules. It examines every file which
comes through the Internet, thus preventing damage to your system.
5. Data Encryption: Data encryption is the process of converting plain text into a coded message
to protect the confidentiality of the data. It is an effective way to protect sensitive data from
unauthorized access.
6. Use Strong Passwords: Strong passwords are essential for securing your information systems.
Passwords should be complex, unique, and changed regularly.
7. Regular Audits: Regular audits and assessments help identify vulnerabilities and ensure that
security controls are working effectively.
8. Information Security Management System (ISMS): An ISMS is a set of policies and procedures
for systematically managing an organization's sensitive data. The goal of an ISMS is to minimize
risk and ensure business continuity by proactively limiting the impact of a security breach. An
ISMS typically addresses employee behavior and processes as well as data and technology.
By implementing these best practices, organizations can improve their information security
measures and protect their sensitive data from cyber threats.

MANAGEMENT INFORMATION SYSTEMS TOOLS USED IN AN ORGANIZATION

Management Information Systems (MIS) tools are essential for organizations to collect, process,
store, and disseminate information to support decision-making, coordination, control, analysis,
and visualization. Before looking into the MIS tools used in an organization, lets understand the
computer system and various computing techniques in MIS.
Computers
Computer: is an electric device that accepts data as an input process it and give information as
an output. It can be as simple as our Calculators. The computers can be a stand-alone or
networked.
Stand-alone and Network computers
When a computer is used on its own without any connection to other computers, it is said to be
being used in a stand-alone environment. If data needs to be passed to another department,

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then it needs to be printed out on paper, or copied onto disk before being transferred by
person to the other person for entry into their computer system. Information flow occurs all
the time in organisations, so it makes sense to have a method that makes information exchange
easier and faster, such as by connecting the computers together by means of cables. A group of
computers connected in this way is called a computer network.

Advantages of a stand-alone environment

A standalone environment is where each computer is set up and used separately. Each
computer will need its own copy of the operating system and the applications software being
used. In addition, they will use an individual set of data and if data needs to be passed from one
computer to another then this will need to be performed manually.
There are some advantages in using stand-alone machines:
 Cheaper hardware and software - the wires, network cards and software needed to run a
network is expensive, so stand-alone machines provide a cheaper option.
 Less IT knowledge needed - a greater degree of IT knowledge is needed to run a network
successfully and this may mean a network manager/administrator should be employed.
 Fewer problems with viruses - virus infection will be less of a problem with stand-alone
machines unless data and programs are transferred from one computer to another.
 Not as hardware dependent - less dependence on hardware. With some types of network, if
the file server can't be used because of a technical problem, then this affects the whole
network.
Disadvantages of using stand-alone computers
 Transfer of files between computers is sometimes necessary - users often work together on
a project which means they need to transfer data from one computer to another using
portable media such as CDs or flash drives. This is wasteful if CDs are used.
 Hard to keep data up to date - if two people are working with the same set of data, then
care needs to be taken that two different versions are not produced, which can cause
confusion. With a network only the one set of data is produced, so there is no such
confusion.
 Harder to install software - with stand-alone computers, software must be installed on each
computer, whereas with a network you only install software on one computer, so time is
saved during the installation.
 Harder to update software - you must update the software on each computer with stand-
alone computers.
 Backups need to be kept by each user - users of each computer must be relied up to take
their own backups of their data.

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Advantages of using network computers
There are many advantages of networking computers and they far outweigh the disadvantages;
the advantages include the following:
 Ability to share files - No need to make copies of files as all the files can be accessed by all
the computers on the network if needed.
 Ability to share hardware resources - No need to have a printer for each computer as any
hardware device (e.g. printer, scanner, plotter, etc) can be shared.
 Ability to share software - Software can be shared, meaning that everyone will be using the
same version. Maintaining software by keeping it up to date is made much easier.
 Lower software costs - It is cheaper to buy one network version with a license for so many
users compared to buying individual copies for each computer. It also saves time as only one
copy needs to be installed on the server.
 Improved security - It is easier for network managers to control access from computers to
the internet. It is much easier to make sure that any material from the internet is checked
with the latest virus checking software.
 Easier to implement acceptable use policies - Centralizing applications software simplifies
the process of implementing software policies in an organization. Software policies refer to
what software may be installed on computers and how it may be used.
 Easier to back up files - Backing up is performed by the network manager rather than the
individual users. This means backing up is taken seriously and users are less likely to lose
data.
 Improved communication- Networks have e-mail facilities which will improve
communication between workers.
 Central maintenance and support - New upgrades to software need only be added to the
server. Network managers and support staff can see what the users are looking at on their
screen, so they can be given help if they are having problems with a task.
Disadvantages of Using Network Computers include the following:
 Technical knowledge needed - More IT knowledge is needed to run a network, so specialist
staff is usually needed.
 Lack of access when file server fails - If a file server fails (i.e. goes down) the entire network
may fail, which means that users might not be able to access files and data.
 Cost - although a network will save money over time, there is the initial high cost of all the
network equipment and training needed.

Here are the most popular MIS tools used in an organization with relevant examples:
1. Enterprise Resource Planning (ERP) Systems:
- ERP systems are integrated software applications that automate and manage business
processes across an organization.

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- They provide a centralized database that can be accessed by different departments, enabling
efficient data sharing and collaboration.
- Examples of ERP systems include SAP, Oracle, and Microsoft Dynamics.
2. Customer Relationship Management (CRM) Systems:
- CRM systems are software applications that manage interactions with customers and
prospects.
- They provide a centralized database of customer information, enabling businesses to
personalize customer interactions and improve customer satisfaction.
- Examples of CRM systems include Salesforce, HubSpot, and Zoho CRM.
3. Business Intelligence (BI) Systems:
- BI systems are software applications that analyze data to provide insights into business
performance.
- They enable businesses to make data-driven decisions, identify patterns, and gain valuable
insights into customer behavior, market trends, and operational efficiency.
- Examples of BI systems include Tableau, Microsoft Power BI, and QlikView.
4. Supply Chain Management (SCM) Systems:
- SCM systems are software applications that manage the flow of goods and services from
suppliers to customers.
- They enable businesses to optimize inventory levels, reduce costs, and improve supply chain
efficiency.
- Examples of SCM systems include SAP Ariba, Oracle SCM Cloud, and JDA Software.
5. Electronic Data Interchange (EDI) Systems:
- EDI systems are software applications that enable the electronic exchange of business
documents between organizations.
- They provide a standardized format for exchanging documents such as purchase orders,
invoices, and shipping notices, enabling efficient and accurate transactions.
- Examples of EDI systems include IBM Sterling B2B Integrator, Cleo Integration Cloud, and SPS
Commerce.
6. Knowledge Management Systems (KMS):
- KMS helps organizations store, organize, and distribute knowledge and information efficiently.
- It allows users to capture, categorize, and share knowledge, making it easily accessible to
employees and customers.
- Examples of KMS tools include Zendesk, Freshdesk, and Monday.com.
7. Decision Support Systems (DSS):
- DSS assists in decision-making processes by providing relevant information and analysis.
- It helps managers analyze data, generate reports, and make informed decisions based on
various scenarios.
- Examples of DSS tools include Tableau, Microsoft Excel, and SAP Business Objects.

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8. Business Process Management (BPM) Systems:
- BPM systems automate and optimize business processes to improve efficiency and
productivity.
- They provide tools for modeling, executing, monitoring, and optimizing workflows and
processes.
- Examples of BPM tools include IBM Business Process Manager, Appian, and Pega Systems.
9. Customer Support and Service Management Systems:
- These systems help organizations manage customer support and service processes.
- They include ticketing systems, knowledge bases, and customer relationship management
(CRM) tools.
- Examples of customer support and service management tools include Zendesk, Freshdesk, and
Salesforce Service Cloud.
10. Data Analytics and Reporting Tools:
- These tools enable organizations to analyze and visualize data to gain insights and make data-
driven decisions.
- They provide capabilities for data mining, reporting, dashboards, and predictive analytics.
- Examples of data analytics and reporting tools include Tableau, Microsoft Power BI, and
QlikView.
These MIS tools help organizations manage and leverage information effectively, improve
decision-making, enhance customer service, and optimize business processes. The choice of
tools depends on the specific needs and requirements of the organization.

SOURCES OF SOFTWARE PACKAGES

The software packages can be sourced through internal development and external acquisition.
The internal development involves employing programmers and system analyst and setting up
an IT group within the organisation. While external acquisition as the name implies involve
external programmers and system analyst to develop the software, it is basically classified into
five: a) Proprietary Software, b) Open Source Software (public domain), c) Shareware, d)
Freeware and e) Free Open Source Software (FOSS)

a) Proprietary Software
Proprietary software is software that is owned by an individual or a company (usually the one
that developed it). There are almost always major restrictions on its use, and its source code is
almost always kept secret (source code is the version of the software as it is originally written
by a developer in a plain text, readable in plane or alphanumeric characters). Sometimes these
are called “closed code software” which means, the source code is not for open access. Most
software is covered by copyright which, along with contract law, patents, and trade secrets,
provides legal basis for its owner to establish exclusive rights.

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Furthermore, the owner of proprietary software exercises certain exclusive rights over the
software. The owner can restrict use, inspection of source code, modification of source code,
and redistribution. Proprietary software may also have licensing terms that limit the usage of
that software to a specific set of hardware. Apple has such a licensing model for Mac OS X, an
operating system which is limited to Apple hardware, both by licensing and various design
decisions. Examples of proprietary software include Microsoft Windows, Adobe Flash Player,
PS3 OS, iTunes, Adobe Photoshop, Google Earth, Mac OS X, Oracle's version of Java and some
versions of UNIX.

b) Open Source Software

The term "open source" refers to something that can be modified and shared because its
design is publicly accessible. Open source software is software whose source code is available
for modification or enhancement by anyone. Open source software is different. Its authors
make its source code available to others who would like to view that code, copy it, learn from it,
alter it, or share it. Libre Office and the GNU Image Manipulation Program are examples of
open source software. As they do with proprietary software, users must accept the terms of a
license when they use open source software—but the legal terms of open source licenses differ
dramatically from those of proprietary licenses.

Open source software licenses promote collaboration and sharing because they allow other
people to make modifications to source code and incorporate those changes into their own
projects. Some open source licenses ensure that anyone who alters and then shares a program
with others must also share that program's source code without charging a licensing fee for it.

c) Shareware software
These softwares are generally downloaded from the Internet, which can be freely used and
distributed. However, it does require that if users would like to continue using it, they pay the
developer a fee. This is nearly always done by means of a credit card transfer across the
Internet. When payment is received, users get a serial number with which they can continue to
use the software. Shareware is not a totally free software, but you usually get a certain days
trial depending on the software or the company. After you have passed those days the software
expires and works no more. If the user would like to continue using that software, they must
pay a certain fee to get the original product. Shareware is not free software, or even semi free.
There are two reasons it is not free:
i. For most shareware, source code is not available; thus, you cannot modify the program at
all.
ii. Shareware does not come with permission to make a copy and install it without paying a
license fee.

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Shareware is inexpensive because it is usually produced by a single programmer and is offered
directly to customers. Thus, there is practically no packaging or advertising expenses. Those
Sharewares can be shared in any Website if they are for trial purposes or to attract customers.

d) Freeware
Freeware is software which can be freely copied and distributed. Usually there are certain
restrictions such as it may not be resold, or its source should be acknowledged. Examples of
freeware include PDF edit (Software that allows you to edit PDF files), YouTube Downloader
(Downloads & converts videos from YouTube), 3.GOM media player (Play video files of multiple
video formats).

e) Free Open Source Software (FOSS)

We have discussed about different software ownership. The software developer has all the
rights to decide whether the source code needs to be shared or not. This decision makes the
change that the software is free or proprietary. The paradigm shift in the intellectual property
and knowledge management paves the roots for democratisation of knowledge. This results in
free and open movement and copy left movement (as against copy right). These basically focus
on the freedom of the user to access, modify, and redistribute the software. Therefore, Free
and Open-Source Software (FOSS) is computer software that can be classified as both free
software and open-source software. That is, anyone is freely licensed to use, copy, study, and
change the software in any way, and the source code is openly shared so that people are
encouraged to voluntarily improve the design of the software.
This contrasts with proprietary software, where the software is under restrictive copyright and
the source code is usually hidden from the users. “Free software” means software that respects
users' freedom and community. Roughly, it means that the users have the freedom to run, copy,
distribute, study, change and improve the software. Thus, “free software” is a matter of liberty,
not price. A program is free software if the program's users have four essential freedoms:

i. The freedom to run the program as you wish for any purpose.
ii. The freedom to study how the program works and change it so that it does your
computing as you wish. Access to the source code is a precondition for this.
iii. The freedom to redistribute copies so you can help your neighbour.
iv. The freedom to distribute copies of your modified versions to others. By doing this you
can give the whole community a chance to benefit from your changes. Access to the
source code is a precondition for this.
INFORMATION SECURITY IN MANAGEMENT INFORMATION SYSTEMS
Information security in Management Information Systems (MIS) refers to the protection of
sensitive data and information assets from unauthorized access, use, disclosure, disruption,
modification, or destruction. Here are the details of information security in MIS with examples:

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 Information Security Management System (ISMS):
- An ISMS is a set of policies and procedures for systematically managing an organization's
sensitive data.
- It includes the processes, people, technology, and procedures that are designed to protect
against unauthorized access, use, disclosure, disruption, modification, or destruction of
information.
- An ISMS provides a holistic approach to managing the information systems within an
organization, protecting all types of proprietary information assets, including personal data,
intellectual property, financial data, customer data, and data entrusted to companies through
third parties.
- An effective ISMS can help support a business in many ways, such as ensuring compliance with
data protection regulations, reducing the risk of data breaches, and improving customer trust.

Information Security Policy:

- An information security policy is a set of guidelines and rules that define how an organization
will protect its information assets.
- It should cover all aspects of information security, including access control, data protection,
incident management, and business continuity.
- An information security policy should be in place before setting up ISMS, as it can help an
organization discover the weak points of the policy.

Advantages of Information Security in Management Information Systems

Information security in Management Information Systems (MIS) has both advantages and
challenges. Here are the advantages and challenges of information security in MIS:
Advantages:
1. Protection of Sensitive Information: Implementing security measures can protect sensitive
information from unauthorized access, use, disclosure, disruption, modification, or destruction.
2. Compliance: Implementing information security can help organizations meet compliance
requirements, such as HIPAA, PCI-DSS, and SOX.
3. Risk Management: By implementing security measures, organizations can better manage the
risks associated with their information systems.
4. Business Continuity: By protecting information systems from natural disasters, power
outages, and other disruptions, organizations can ensure that their business operations can
continue uninterrupted.
5. Cost Savings: Implementing security measures can help organizations avoid costly data
breaches and other security incidents.
Challenges:
1. Security and Privacy: Information security in MIS faces challenges related to data breaches,
online fraud, and protecting customer information.

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2. Logistics and Fulfillment: Efficient order fulfillment, shipping, and returns management are
crucial for a seamless customer experience.
3. Competition: The online marketplace is highly competitive, requiring businesses to
differentiate themselves and provide unique value propositions.
4. Technical Infrastructure: Maintaining a robust and scalable technical infrastructure to handle
high website traffic and ensure smooth transactions is essential.
5. Customer Trust: Building trust with customers is crucial in information security, as customers
need to feel confident in sharing their personal and financial information.

An effective ISMS, information security policy, information security measures, and addressing
information security challenges are crucial for ensuring information security in MIS.

Information Security Measures:

- Information security measures are the tools and technologies used to protect information
assets.
- They include firewalls, antivirus software, encryption, access control, and intrusion detection
systems.
- Information security measures should be implemented based on the organization's specific
needs and risks.

EMERGING TRENDS IN MANAGEMENT INFORMATION SYSTEMS

Emerging trends in Management Information Systems (MIS) are constantly evolving as
technology advances and organizations seek to leverage new opportunities. Here are some
emerging trends in MIS:

1. Data Analytics and Business Intelligence: The ability to collect, analyze, and derive insights
from large volumes of data is a significant trend in MIS. Data analytics and business intelligence
tools allow organizations to make data-driven decisions, identify patterns, and gain valuable
insights into customer behavior, market trends, and operational efficiency.

Example: Companies using data mining tools to collect information on consumer purchases and
economic trends to translate it into goals and directions for future business operations.

2. Artificial Intelligence (AI) and Machine Learning (ML): AI and ML technologies are
increasingly being integrated into MIS to automate processes, improve decision-making, and
enhance customer experiences. AI-powered chatbots, predictive analytics, and
recommendation systems are examples of how AI and ML are transforming MIS.
Example: Implementing AI algorithms to analyze customer data and provide personalized
product recommendations.

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3. Cloud Computing: Cloud-based MIS allows organizations to store, process, and access data
and applications remotely. It offers scalability, flexibility, and cost-effectiveness, enabling
organizations to focus on their core business while leveraging the power of cloud infrastructure.
Example: Adopting cloud-based enterprise resource planning (ERP) systems to streamline
operations and improve collaboration across departments.

4. Internet of Things (IoT): The IoT involves connecting devices and sensors to gather real-time
data, enabling organizations to monitor and control various processes. MIS leverages IoT data
to optimize operations, improve efficiency, and enable predictive maintenance.
Example: Using IoT sensors to monitor equipment performance and automatically trigger
maintenance requests when necessary.

5. Cybersecurity and Data Privacy: With the increasing threat of cyberattacks and data
breaches, organizations are prioritizing cybersecurity and data privacy in their MIS. This
includes implementing robust security measures, encryption, and compliance with data
protection regulations.
Example: Enhancing network security with advanced firewalls, intrusion detection systems, and
encryption protocols.

6. Mobile and Remote Access: The ability to access MIS applications and data remotely through
mobile devices is gaining importance. Mobile MIS applications enable employees to access
information on the go, collaborate, and make informed decisions regardless of their location.
Example: Using mobile MIS apps to track sales performance, access real-time inventory data,
and communicate with team members.

These emerging trends in MIS are shaping the way organizations collect, analyze, and utilize
information to gain a competitive edge, improve decision-making, and enhance operational
efficiency.

INTERNET, INTRANET, AND EXTRANET

The Internet can be defined as a network of computers using standard protocols for sharing of
data. It binds computers running on different platforms into a Web to access information by
using a standard client programme, such as Web Browsers like Internet Explorer, Chrome,
Mozilla Firefox, Netscape and so on. The use of accessing information through Web Browsers
has become so popular over the last few years that an increasing number of Web-based
software programmes are being developed throughout the world. Almost all the software
producers such as Microsoft, SUN etc. are now designing their services, which could be easily
accessed through Web Browsers. The popularity of Web Browsers has also given birth to the
development of Intranets and Extranets. The Intranets and Extranets use Internet protocols and

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technology for sharing the data from one computer to another. The users also need not to
understand different commands for accessing different databases as almost all of them could
be accessed through a Web Browser.

An Intranet can be defined as an “internal internet”— a network of an office, company,

university or college or even a large library that runs on IP protocols. An intranet is a private
network that is contained within an enterprise. It may consist of many interlinked Local Area
Networks and use leased lines in the Wide Area Network. Typically, an intranet includes
connections through one or more gateway computers to the outside Internet. The main
purpose of an intranet is to share information within the organisation and computing resources
among employees. An intranet can also be used to facilitate working in groups and for
teleconferences. The Intranet is a Web-based architecture used for managing internal
information.
Another definition can be given as: Intranet is an organisation’s internal information system
that uses Internet tools, protocols, and technology. An Intranet could be something as simple as
a single HTML document made accessible on a Local Area Network with no access to the
Internet at large; or it could be as complex as one or more dedicated Web servers with
thousands of HTML documents linking together a worldwide network of corporate offices; or it
could be anything in between. An intranet differs from a conventional LAN in two ways: it links
more than one kind of networking technology using the Internet protocols, TCP/IP; and it uses a
firewall to keep the larger Internet out of your internal information resources. This means
Intranets take the same features that make a World Wide Web useful - minus geographic and
time barriers, integrating multiple information services into a single interface, interactive
multimedia application, etc. - and bring them into the office.

Typically, larger organisations allow users within their intranet to access the public Internet
through firewall servers that could screen messages in both directions so that company security
is maintained. When part of an intranet is made accessible to its staff (working in branch
offices), customers, partners, suppliers, or others outside the organisation, that part becomes
part of an extranet. A firewall is a computer or several computers that sit between your
network and the greater Internet. Using filtering and specialised routing, as well as rules you
decide upon, firewalls keep out people who don't have permission to access your resources
internally. You, on the other hand, can access all the resources of the general Internet.

As intranet uses TCP/IP, HTTP, and other Internet protocols, it looks like a private version of the
Internet. With tunneling, companies can send private messages through the public network,
using the public network with special encryption/decryption and other security safeguards to
connect one part of their intranet to another. In some ways, the word "intranet" is a
portmanteau word, which logically combines the concepts in "internal internet between

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business sites." Going deeper, we see that an intranet uses not only the protocols for transport
but the tools for collaboration, information dissemination, and resource sharing that the
Internet offers. Internal Web servers, FTP archives, newsgroups, and other resources become
the way your employees get their work done.

An Extranet, or extended Intranet, can be defined as a private network of linking branch offices
or several cooperating organisations located outside the walls of any organisation. An Extranet
service uses existing Intranet interactive infrastructure, including standard servers, e-mail
clients and Web browsers. This makes Extranet far more economical than the creation and
maintenance of a proprietary network. It enables trading partners, suppliers and customers
with common interests to form a tight business relationship and a strong communication bond.
The Extranet can also be defined as “a network that links business partners to one another over
the Internet by tying together their corporate intranets”.

Extranets may be used to allow inventory database searches, for example, or to transmit
information on the status of an order. They are being used by businesses of all types such as
banks, airlines, railways, large corporate offices having several branches etc. An Extranet is a
private network that uses the Internet protocol and the public telecommunication system to
securely share part of an organisation's information or operations with its branches (located
within the same city or outside), partners, users, customers, suppliers or contacts. An extranet
can be viewed as part of an organisation's intranet that is extended to users outside the
organisation. An extranet requires security and privacy.

Advantages of Intranet
An increasing number of organisations throughout the world are now using almost all the
facilities/ provisions of Internet technology for internal communication. Access to internal
document collections, document management system, chat, file transferring, e-messaging and
video-conferencing are the popular usage of Intranet. Almost all the internal information of an
organisation such as newsletters, telephone directories, calendars, policy manuals, current
personnel lists, etc. are being made available through Intranets. The Intranets are becoming
quite popular due to the following reasons:

 The interface is easy to use; it also encompasses access to multimedia formats such as
text, video, sound and graphical images.
 A single interface to all formats of information using the Internet open standard
removes the requirement for an organisation's network to provide several dedicated
interfaces traditionally needed to interrogate proprietary systems such as databanks,
bibliographic information retrieval systems and management information systems. Also,
the user only needs to be familiar with one interface.

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  Compared to the cost of employing proprietary information systems, or group ware,
intranets are very inexpensive to set up. In addition, proprietary packages also use in-
house protocols, which often result in a dependency on the software distributor, and
update and utilities may only be acquired from the original vendor.
 They provide improved access in a few respects:
o documents may be shared across all major networking platforms.
o information is accessible regardless of the user's location
o a workstation configured for use on an intranet is also ready for Internet use if
the necessary gateways are incorporated into the network.
o access and use of groups using the intranet may be monitored, making it
possible to assess the value of services and resources offered on the intranet
o user authentication systems can be incorporated into browsers, so that access to
information can be controlled.
Advantages of Extranet
An organisation can use provisions of the Intranet to create systems with an idea to build them
for improving employee productivity, sharing data, or updating human resources information,
for example. Then they would build other applications for use outside the organisation - either
products for their customers or products to let the company communicate better with their
vendors. So in addition to internal company networks, or intranets, that are behind the firewall,
companies are building external networks called "extranets" that reach out to people who may
physically work outside the firewall but who are an important part of the business strategy,
product-delivery system, or customer-support apparatus. The organisations can use an extranet
to:
 Exchange large volumes of multimedia data using Electronic Data Interchange (EDI) -
Share office information, library, circulars, etc., at all the locations.
 Collaborate with other organisations on joint development efforts - Jointly develop and
use training programmes with other organisations.
 Provide or access services provided by one organisation to a group of other
organisations.
 Share news of common interest exclusively with partner organisations. An extranet is
not the only method of connecting an organisation to distant locations of the same
organisation but also to similar organisations, their employees, researchers, etc. to
other businesses.
 Ubiquity of Access - Suppose an organisation must rely on contractors and
subcontractors to supply you with widget parts. One advantage of the Internet is that it
is becoming increasingly acceptable to any existing contractor or subcontractor. You
don’t need to make sure your operating system is the same, or that you’re using the
same type of database. You don’t even need to be using the same Web browser. “An

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 extranet is an effective way for organisations to communicate without having to agree
to buy all similar systems so the cost of enabling goes way down”.
 Open Standards - Another advantage of an extranet is the Internet’s open standards.
Regardless of what equipment different companies own, it’s unlikely they buy their
equipment from the same vendor. The extranet eliminates many compatibility
problems.
 Less Time and Money - Lastly, and most importantly, an extranet can save a corporation
money and time. Extranet is certainly not a miracle situation to handle complex
problems of remote office. The Intranet and Extranets are being popularly used for
communication application like Audio and Video conferencing, net meetings, net shows,
collaborative Multimedia computing and so on.

MANAGING DIGITAL FIRMS

E-COMMERCE
E-commerce, or electronic commerce, refers to the buying and selling of goods, services, or the
transmission of funds and data over the internet. It has revolutionized the way businesses
operate and created new opportunities for entrepreneurs and consumers alike. Here is a
detailed explanation of the concept, types, advantages, and challenges of e-commerce:

Concept of E-commerce:
- E-commerce involves the exchange of goods, services, funds, or data over electronic
networks, primarily the internet.
- It encompasses various activities such as online shopping, electronic banking, online auctions,
and digital content distribution.
- E-commerce can be conducted between businesses (B2B), businesses and consumers (B2C),
consumers and consumers (C2C), or consumers and businesses (C2B).
E-Commerce businesses may employ some or all the following:
 Online shopping websites for retail sales direct to consumers.
 Providing or participating in online marketplaces, which process third-party business-to-
consumer or consumer-to-consumer sales.
 Business-to-business buying and selling.
 Gathering and using demographic data through Web contacts and social media.
 Business-to-business electronic data interchange.
 Marketing to prospective and established customers by E-mail or fax (e.g., with
newsletters).
 Engaging in the pretail for launching new products and services.
Pretail (also referred to as pre-retail, or pre-commerce) is a sub-category of E-Commerce and
online retail for introducing new products, services, and brands to market by pre-launching
online, sometimes as reservations in limited quantity before release, realisation, or commercial

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availability. Pretail includes pre-sale commerce, pre-order retailers, incubation marketplaces,
and crowd funding communities.

E-Commerce with the “5-C Model”

Commerce –inthe electronic marketplace there is a matching of customers and supplies, an
establishing of the transaction term, and facilitation of exchange transaction.

Collaboration – the Web is a vast nexus, or network, of relationships among firms and
individuals. More or less formal collaborations are created or emerge on the Web to bring
together individuals engaged in knowledge work in a manner that limits the constraints of
space, time, national boundaries, and organisational affiliation.

Communication – as an interactive medium, the Web has given rise to a multiplicity of media
products. This universal medium has become a forum for self-expression (as in blogs) and self-
presentation. The rapidly growing M-Commerce enables connectivity in context, with location-
sensitive products and advertising. In communication domain, the Web also serves as a
distribution channel for digital products.

Connection – Common software development platforms, many of them in the open-source

domain, enable a wide spectrum of firms to avail themselves of the benefits of the already
developed software, which is, moreover, compatible with that of their trading and collaborating
partners. The Internet, as a network of networks that is easy to join and out of which it is
relatively easy to carve out virtual private networks, is the universal telecommunications
network, now widely expanding in the mobile domain.

Computation – Internet infrastructure enables large-scale sharing of computational and storage

resources, thus leading to the implementation of the decades-old idea of utility computing.

E-BUSINESS
E-business, or electronic business, refers to the use of the internet and other electronic means
to conduct business activities such as purchasing and selling goods and services, advertising,
and communicating with customers. Here is a detailed explanation of the concept, types,
advantages, and challenges of e-business:

Concept of E-business:
- E-business involves the use of electronic means to conduct business activities, including
buying and selling goods and services, advertising, and communicating with customers.
- It encompasses various activities such as online shopping, electronic banking, online auctions,
and digital content distribution.
- E-business can be conducted between businesses (B2B), businesses and consumers (B2C),
consumers and consumers (C2C), or consumers and businesses (C2B).

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Types of E-Business/E-Commerce
- B2C (Business-to-Consumer): In B2C e-business, businesses sell products or services directly
to consumers. Examples include online retail stores like Amazon and clothing brands selling
through their websites.
- B2B (Business-to-Business): B2B e-business involves transactions between businesses. It
includes online marketplaces, supply chain management systems, and electronic data
interchange (EDI) systems used for seamless business transactions.
- C2C (Consumer-to-Consumer): C2C e-business enables consumers to sell products or
services directly to other consumers. Platforms like eBay and Craigslist facilitate C2C
transactions.
- C2B (Consumer-to-Business): C2B e-business occurs when consumers offer products or
services to businesses. Examples include freelance platforms where individuals offer their skills
or expertise to businesses.

Similarities between E-commerce and E-business:

- Both involve the use of electronic means to conduct business activities.

-Both can be conducted between businesses (B2B), businesses and consumers (B2C),
consumers and consumers (C2C), or consumers and businesses (C2B).
- Both involve the use of the internet and other electronic networks to conduct transactions.

Distinctions between E-commerce and E-business:

- E-commerce refers to buying and selling products or services online, while E-business
encompasses all business conducted online.
- E-commerce is a subset of E-business, which includes all the processes required to run a
company online.
- E-commerce is primarily concerned with the firm's dealings with its customers, clients, or
suppliers, while E-business refers to undertaking industry, trade, and commerce with the help
of information technology and communication.
- E-commerce has an extroverted approach that covers customers, suppliers, distributors, etc.,
while E-business has an ambient approach that covers internal as well as external business
processes.

Advantages of E-commerce and E-business:

- Global Reach: Both E-commerce and E-business allow businesses to reach a global customer
base, breaking geographical barriers.
- Convenience: Customers can shop online anytime, anywhere, and have products delivered to
their doorstep.
- Cost Savings: E-commerce and E-business eliminate the need for physical stores, reducing
overhead costs.

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- Personalization: E-commerce and E-business platforms can personalize recommendations and
offers based on customer preferences and behavior.
- Increased Efficiency: Automated processes and streamlined operations lead to improved
efficiency in inventory management, order processing, and customer service.

Challenges of E-commerce and E-business:

- Security and Privacy: Both E-commerce and E-business face challenges related to data
breaches, online fraud, and protecting customer information.
- Logistics and Fulfillment: Efficient order fulfillment, shipping, and returns management are
crucial for a seamless customer experience.
- Competition: The online marketplace is highly competitive, requiring businesses to
differentiate themselves and provide unique value propositions.
- Technical Infrastructure: Maintaining a robust and scalable technical infrastructure to handle
high website traffic and ensure smooth transactions is essential.

- Customer Trust: Building trust with customers is crucial in both E-commerce and E-business,
as customers need to feel confident in sharing their personal and financial information.

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