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Mis Unit III-2

this ppt help to know basic about mis. it is a collage work and following topic are cover 1)data 2)information 3)data processing 3) characteristic 4)external and internal

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Meenakshi Pawar
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2K views20 pages

Mis Unit III-2

this ppt help to know basic about mis. it is a collage work and following topic are cover 1)data 2)information 3)data processing 3) characteristic 4)external and internal

Uploaded by

Meenakshi Pawar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Data

Data are raw facts about a business and its business transactions. Data are objective measurement of attributes of entities (such as people, place, thing or event). These measurement are usually represented by symbol such as numbers, codes, words, alpha numeric, images, audio and video etc. Data is the collection of facts, which is unorganized but can be organized into useful information.

Information Information has to be generated from data, which acts as a raw material that
needs some processing. Information is a necessary and vital input I any decision making process in an organization. Information reduces uncertainty and trigger action.

Definition of Information Data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective actions or decisions.

Data Processing
The conversion of facts into meaningful information is know as data processing. It is the execution of systematic sequence of operations performed upon data to transform it into information.

DATA

Processing

Information

Characteristics of useful / good Information


1. Timeliness : an information to be useful must be made available to the recipient on appropriate time. The appropriate time is one when the recipient wants to initiate some actions that are meant to achieve organizational objectives. 2. Adequacy: To be useful, an information must be adequate so that desired actions can be initiated. In measuring the adequacy of information, following aspects should be taken into consideration. i. Information should be complete as possible so that it reflects the true picture of an issue. ii. Information should be reliable.

iii. Information should be valid to the purpose for which it will be used.
iv. Appropriate level of quality of information should be maintain. v. Data redundancy should be avoided

3. Form: for making an information useful. It should be made available in a form which suits the recipient most. Information may be communicated in visual, written or verbal form. Following aspects of useful information are

i.

Often a combination of different forms can be used.

ii. Information should be provided in right format. iii. Data should be classified into those categories which are relevant for taking actions. iv. Format should be simple

Sources of Information The sources of information can be divided into types


1. Internal Source: the internal information is that information which has been generated from the operations of the organization at various functional areas like sales , production, HR and finance etc. it is generally required by middle and lower level of management for making routine and regular decisions. Internal information is collected from within the boundary of the business organization. E.g. balance sheet, sales forecast, budge allocation and utilization reports. Internal reports are generally generated weekly, monthly, quarterly and yearly.

External Source: External information is collected from the external environment of the business organization in which it operates. External information is considered to affect the organizational performance from outside the organization. External information is generally required by the top level of management for making strategic decisions. E.g. government policies, economic trends, competitors activities, market trends, surveys.

External

top

middle lower

Internal

Sources of information and Managerial Lever

Types of Information 1. Action versus no-action information: information which induces action is called action information. The information which communicates only the status of a situation is a non-action information. For e.g. No Stock report calling a purchase action is an action information but the stock ledge showing is Noaction information. 2. Recurring versus non-recurring information: information generated at regular interval is a recurring information. E.g. monthly sales, stock statements etc. the information that are not generated at regular interval and generated only when required is called non-recurring information. E.g. financial analysis or the report on the market research.

3. Internal versus External information: information generated within the boundaries of business is known as internal information. Whereas the information generated from outside the boundaries of business is known as external information.

Information can also be classified as under, in terms of its application 1. Planning information: certain standards, norms and specifications are used in the planning of any activity. Hence such information is called planning information. 2. Control information: reporting the status of an activity through feedback mechanism is called the control information.

3. Knowledge information: a collection of information through the library reports and the resea4rch studies to build up a knowledge base as a information source for decision making is known as knowledge information.

Classification of information on the basis of usage 1. Organization information: when the information is used by everybody in the organization 2. Database information: when the information has a multiple use and application 3. Functional information: when the information is used in the operation of a business .

Relevance of Information in Decision Making


Decision theory suggests the methods of solving the problems of decision making under certainty, risk and uncertainty. Decision making under certainty is possible when decision maker has full knowledge about the alternatives and its outcomes (known as Perfect information). In uncertain situations, the decision maker requires additional information to take more accurate decisions. If this additional information wipes out uncertainty or risk completely then it is called perfect information. In organization, Managers play a key role in decision making for this information system have become the main tool.

Information Required at each stage Status Report Trend Report

Decision Making Stages


Business Intelligence Data Collection Data Processing

Statistical Model

Analytical Tools

Design Strategy Alternative Strategies Forecast Possible Choose alternatives Selection best alternative

Alternatives Scenario

Feedback and follow up

Review Monitoring

Cost Benefit Analysis


Any system in the organization must produce more benefits as compared to tits costs for the organization to survive and grow.

Identification of cost and benefit

Evaluation of costs and benefits

Choice of system

Process of cost / benefit analysis

Identification of Costs and Benefits


In this step, the different cost and benefit associated with the information system. Tangible and Intangible Costs and Benefits: Tangible Cost: Payment of Cash like hardware/software purchase Tangible Benefit: Reduced time in preparing a report

Intangible Cost: Cost of breakdown of an on-line system during banking hours will cost lose of deposit and human resource Intangible Benefit: Higher customer satisfaction or improved business image.
Fixed and Variable Costs and Benefits Fixed Cost: remain same irrespective of volume e.g. interest on loan Fixed Benefit: benefit from reduced number of employees Variable cost: vary in proportion to the volume of activities of the system. Variable Benefit: are realized on a regular basis.

Direct and Indirect Costs and Benefits


Direct Cost: that are associated directly to an operation Direct Benefit: are specifically attached to a given operation e.g. save in time. Indirect Cost: are not directly related to an operation e.g. insurance cost, maintenance cost Indirect Benefit: are realized as a by-product of another operation.

Evaluation of Costs and Benefits


Capital Budgeting is planning the deployment of available capital for the purpose of maximizing the long term profitability of an organization. It is of two types 1. Discounted cash flow criteria: in this future cash inflows (earning from investment ) are discounted to make these comparable with present day investment. 2. Non-Discounted Cash flow criteria: no such discounted is made.

Discounted cash flow criteria 1. 2. 3. 4. Net present value Internal rate of return Profitability index Discounted payback period

Non-Discounted

1. Simple payback period 2. Accounting rate of return

Quantitative and Qualitative cost benefit analysis


In Quantitative cost benefit comparison which expresses all costs and benefits in monetary terms, compares costs and benefits by summarizing the ratio of benefits by summarizing the ratio of benefits to costs. In Qualitative cost benefit analysis differs from quantitative cost benefit analysis in drawing on a range of evidence of costs and benefits, not all cost and benefits can be converted to monetary value. Quantitative Benefits are: Reduced costs, reduced staff, increase productivity Qualitative Benefits: Improved public performance, increased work satisfaction, improved management, better time management

Assessing Information Needs of the Organization

Information Needs Depends On

Type of Business

Type of Business Decision

Type of Business Manager

Business Functions
Business Decision Type of business manager

Marketing Finance Production HR

Structured Decision Semi-structured decision Unstructured decision

Top level (Strategic planning) Middle level (Tactical planning) Supervisory level( Operational planning)

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