Lecture – II

Part – I

Types of MIS
Enterprise Resource Planning

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 Recall: What is MIS
Definition:
The MIS is defined as a system based on the database of the evolved for the purpose of
providing information to the people in the organization.
Management information system is a system, which is designed to provide information
to various organizational levels, to assist them in decision-making.
Components:
 People
 Software,
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 Hardware,
 Databases,
 Communication Networks and
 Other related components

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 Recall: Architecture of MIS

At enterprise level
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Small Organization

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 Recall: Classification of MIS
Generally have 2 classifications:
• Operational Support System (OSS)
• Management Support System (MSS)

Types of OSS Types of MSS

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 Transaction Processing System
• Collect, store, modify and retrieve the transactions of an organization.
• A transaction is an event that generates or modifies data that is eventually stored in
an information system
• Examples of TPSs are selling goods using a point of sale (POS) system, processing
credit card payments, or making a motel reservation.
• The four important characteristics of a TPS are rapid response, reliability,
inflexibility and controlled processing
• Rapid response : Fast performance with a rapid response time is critical
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• Reliability : A breakdown will disrupt operations or even stop the business. For a
TPS to be effective, its failure rate must be very low
• Inflexibility : A TPS wants every transaction to be processed in the same way
regardless of the user, the customer or the time of day
• Controlled processing : if an organization allocates roles and responsibilities to
particular employees, then the TPS should enforce and maintain this requirement
A TPS minimizes the organization’s costs by reducing the number of times that data
must be handled and by providing timely updates to the database.
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 Process Control System
Process control systems (PCS), sometimes called industrial control systems
(ICS), function as pieces of equipment along the production line that test the
process in a variety of ways, and return data for monitoring and
troubleshooting
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 Office Automation System
Office automation system is an information system which is computer based that create,
collects, stores, manipulate and transmits office information needed for accomplishment of
basic tasks.
Functions integrated by OAS:
• Electronic Publishing: Word processing.
•Electronic Communication: Email, Voice-mail, Fax, Video-conference
•Electronic Collaboration: Electronic meetings of teams, Groupware software
•Office Management: Electronic scheduling, task management, organizing projects
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LAN is backbone of OAS. An OAS makes office work more efficient and increases productivity.

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 MIS - HR Management System
At the heart of an HR system is the employee information database. HR systems can
eliminate or reduce the need for hard-copy employee files, keeping all of the information
very organized and easy to access in a virtual electronic filing cabinet.
Few functions of HR Management Systems:
• Payroll Systems: allows an organization to keep employee data integrated with payroll data
• Employee self-service: allow employees to view and make changes to their information,
submit time off requests, communicate with peers and HR professionals, and view schedule
information
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• Performance reviews: information regarding performance is collected on a continual basis.

Managers can then tap into information directly from the system without having to dig
through paperwork, and even fill out appraisal forms directly in the system
• Recruitment and on-boarding: HR systems can make it easy to place job postings on social
media and company websites, simplify the application process, filter applicants by
qualifications, and even transfer information into employee files when hiring decisions have
been made

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 MIS - Inventory Management System
These systems keep track of all the items you sell in your business, so you can find
everything quickly and restock before something runs out.
Few functions of IMS:
• Automatic Inventory Restocking: automatically restock inventory as soon as it falls below a
certain amount
• Inventory Trend Analysis: it can track your historic sales to predict when you will get a surge
of purchases, so you can buy extra and prepare better for your peak season
•User-friendly: easy to navigate, load information quickly and be simplistic
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• Will grow with business: the system allow you to expand to new locations, add new
product lines or allow more users

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 MIS - Accounts Management System
Account Management system provides full transparency and accountability to creating
ledger reports.
Few functions of AMS:
• Chart of Accounts: It gives full level wise chart of accounts access to account officer and
creates an environment for them to run multi branches accounts through one chart of
accounts screen
• Voucher Types: Save accounts data separately according to its voucher types
• Bank Payment Voucher
• Bank Receipt Voucher
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• Cash Payment Voucher

• Cash Receipt Voucher
• Journal Voucher
• General Ledger / Posting Account: It helps individual create and save the balance sheet
and income transactions report and save it for the next time.
• Financial Year / Posting Period: starting and closing fiscal year
• Opening & Closing Financial Year
• Financial Years wise Voucher Entry
• Manage Multi Branches Accounts Yearly
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 Decision Support System
A decision support system is that system which helps the management in taking the
business decisions.
It has one primary objective that is to provide the managers with the necessary
information for making intelligent decisions.
Decision Support System (DSS) is a specialized MIS designed to support an middle
manager’s skills at all stages of decision making i.e. problem identification, selecting
relevant data, picking the approach to be used in decision making and evaluating the
alternative courses of action.
Elements of DSS:
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• Data
• Decision Rules
• Mathematical Models
• Managerial Knowledge
• Human Judgment

Decision support systems use data from the management information system and they are
used by a manager or a decision maker for decision support. The basic characteristic of the
decision support system is that it is based on some tool, technique or model.

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 Executive Support System
Executive support systems are intended to be used by the senior managers directly to
provide support to non-programmed decisions in strategic management. These
information are often external, unstructured and even uncertain. This information is
intelligence based on:
• Market intelligence
• Investment intelligence
• Technology intelligence
Executive Dashboards
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The information needs to be summarized in meaningful manner. One popular

approach to do this is to use executive dashboards.

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Enterprise Resource Planning
Executive Dashboard

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 Assignment No - I
The assignment carries 10 marks.
The assignment needs to be solved by each student and be submitted before start
of next class (4 February, 2019).
The assignment must be hand written.
Assignment:

In this lecture, we have studied different types of MISs. Choose any one MIS and
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using internet:
• find the real example (name of software),
• Manufacturer of the software,
• Intended users of the software,
• features of the software,
• advantages of the software,
• limitations/disadvantages of software,
• Cost of software in US Dollar
• web link of the software
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 Lecture – II
Part – II

Development of ERP Systems

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Enterprise Resource Planning
Development of Hardware

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 Early attempts to share Resources
• By the mid-1980s, telecommunications developments allowed users to
share data and peripherals on local networks
– Client-server architecture
• By the mid-1980s, database management system (DBMS) required to
manage development of complex ERP software existed
• So, by the end of the 1980s, the hardware and Software needed to
support development of ERP systems were in place
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 Developments Roots of ERP
• Manufacturing software were developed during the 1960s and 1970s
– Evolved from simple inventory-tracking systems to material
requirements planning (MRP) software
• Electronic data interchange (EDI)
Prior to the development of the Internet, companies electronically
transferred purchase orders through a system known as electronic data
interchange (EDI).
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– Direct computer-to-computer exchange of standard business

documents
– Allowed companies to handle the purchasing process electronically

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 Business Model before ERP Systems
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Functional Business Model

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 Business Model after ERP Systems
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Process-Driven Business Model

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 Introduction
• Efficient, integrated information systems are very important for companies
to be competitive
• An Enterprise Resource Planning (ERP) system can help integrate a
company’s operations
– Acts as a company-wide computing environment
– Includes a database that is shared by all functional areas
– Can deliver consistent data across all business functions in real time
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 Benefits of ERP
• Costs of paper, printing, and postage have almost disappeared from
ordering systems.
• Errors have been minimized because orders are not manually entered into
the supplier’s information system.
• Ordering is fast and efficient. As a result, large companies can force their
smaller suppliers to use EDI.
• Suppliers and buyers are “locked” into business relationships: Once a
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company sets up an EDI system with its supplier, changing suppliers

becomes a major inconvenience. Most buyers don’t change suppliers, hence
locking in the relationship. This is an advantage for suppliers and buyers, as
long as both remain satisfied.

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 Internet-based Procurement
• Even though EDI has been useful, companies are moving from EDI to
Internet-based procurement, which is the use of Internet technologies for
procurement activities.
• Internet-based procurement provides the following benefits:
– It is less expensive to use the Internet than private EDI networks.
– Purchasing costs are further reduced as suppliers compete for orders on the
buyer’s Web site.
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– Locking in suppliers often does not occur in Internet-based procurement.

Buyers tend to ignore suppliers who cannot compete on price, instead focusing
on relationships with viable suppliers.
– Smaller companies now can get a share of the market by connecting
electronically with larger customers.

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Enterprise Resource Planning
ERP System

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Enterprise Resource Planning
Basic ERP Structure

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 Lecture – II
Part – III

MIS vs ERP Systems

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 Functionalities of MIS and ERP
MIS:
• Developed to solve specific problems i.e HR, Inventory, Accounts, Manufacturing
etc
• Each MIS use its own database to solve the data
• Integration of different MIS is difficult and expensive and too much integration
reduce the robustness (speed) of MIS
• Different suppliers of MIS so there is no standardizing of MIS is present
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• Up-gradation of MIS is difficult and expensive

ERP:
• ERP has the solution of all above and other problems
• ERP is evolved on BEST-PRACTICES of the industry so it has rich set of options to
setup the business processes
• ERP software are constantly upgraded by the vendors and a business can simply
get upgrade without affecting her previous ERP system
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 Cost Analysis of MIS and ERP
The exact cost of MIS system is depend on the scope and complexity of the system. The
ERP system cost is depend on the number of modules, a company has purchased.
Other factors influencing the cost are given below:

MIS ERP
Consultant Fee (Minimum) Consultant Fee (Considerable)
Training Cost (Negligible) Training Cost (Considerable)
Updating Cost (high) Updating Cost (Normal)
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License Fee (Not required) License Fee (Annual)

New hardware cost (Minimum) New Hardware Cost (Considerable)
Change Management Cost (Not required) Change Management Cost (Considerable)
Data Conversion Cost (Minimum) Data Conversion Cost (Considerable)
Process Reengineering (Not Required) Process Reengineering (Considerable)

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