MB0047 Assignment Set - 2.doc

7/29/2019 MB0047 Assignment Set - 2.doc

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Master of Business Administration- MBA

Semester 2

MB0047 Management Information System

Assignment Set 2

1. How hardware & software support in various MIS activities of theorganization? Explain the transaction stages from manual system toautomated systems?

Ans. Hardware support for MISGenerally hardware in the form of personal computers and peripherals likeprinters, fax machines, copier, scanners etc are used in organization to supportvarious MIS activities of the organization.Advantages of a PC : Advantages a personal computer offers are a) Speed A PC can process data at a very high speed. It can process millionsof instructions within fraction of seconds.b) Storage A PC can store large quantity of data in a small space. It eliminatesthe need of storing the conventional office flat files and box files which requireslots of space. The storage system in a PC is such that the information can betransferred from place to another place in electronic form.c) Communication A PC on the network can offer great support as acommunicator in communicating information in the forms of text and images.

Today a PC with internet is used as a powerful tool of communication for everybusiness activity.

d) Accuracy A PC is highly reliable in the sense that it could be used toperform calculations continuously for hours with a great degree of accuracy. It ispossible to obtain mathematical results correct up to a great degree of accuracy.e) Conferencing A PC with internet offers facility of video conferencingworldwide. Business people across the globe travel a lot to meet their businesspartner, colleagues, and customers etc to discuss about business activities. Byvideo conferencing inconvenience of traveling can be avoided.A block diagram of a computer may be represented as

Input unit is used to give input to the processor. Examples of input unit Keyboard, scanner, mouse, bar code reader etc.A processor refers to unit which processes the input received the way it has beeninstructed.In a computer the processor is the CPU Central Processing Unit. It does allmathematical calculations, logical tasks, storing details in the memory etc.Output unit is used to give output s from the computer. Examples of output unit

Monitor, printer, speakers etc.


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Organization of Business in an E enterprise Software Applications inMISInternet technology is creating a universal bench or platform for buying andselling of goods, commodities and services. Essentially Internet and networksenable integration of information, facilitate communication, and provide accessto everybody from anywhere.And software solutions make them faster and self-reliant as they can analyzedata information, interpret and use rules and guidelines for decision-making.

These enabling capabilities of technology have given rise to four businessmodels that together work in an E enterprise organization. They are:

E business E communication E commerce E collaboration

These models work successfully because Internet technology provides theinfrastructure for running the entire business process of any length. It alsoprovides email and other communication capabilities to plan, track, monitor and

control the business operations through the workers located anywhere. It iscapable of linking to disparate systems such as logistics, data acquisition andradio frequency used systems and so on. Low cost connectivity physical, virtualand universal standards of Internet technology make it a driving force to changeconventional business model to E business enterprise model.Internet has enabled organizations to change their business process andpractices. It has dramatically reduced cost of data and information processing,its sending and storing. Information and information products are available inelectronic media, and is a resident on the network. Once everyone is connectedelectronically, information can flow seamlessly from any location to any otherlocation. For example, product information is available on an organization

website which also has a feature of order placement. An order placed isprocessed at the backend and status of acceptance, rejection is communicatedinstantaneously to the customer. Such order is then placed directly on the orderboard for scheduling and execution. These basic capabilities of Internet havegiven rise to number of business models. Some of them are given in Table


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The Internet and networks provide platform and various capabilities wherebycommunication, collaboration, and conversion has become significantly faster,transparent and cheaper. These technologies help to save time, resource andenable faster decision making. The technology adds speed and intelligence inthe business process improving quality of service to the customer. The businessprocess of serving the customer to offer goods, products or services is made upof the following components.

Enquiry processing Order preparation Order placement Order confirmation Order planning Order scheduling Order manufacturing Order status monitoring Order dispatching Order billing Order receivable accounting

Order payment processing


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The entire process in parts or full can be handled through these technologies andsoftware solutions. It provides important strategic, competitive advantage.Further, the technology is flexible and capable of handling any business modelssuch as: Retailing, Trading, Auctioning Manufacturing, Distribution & Selling Outsourcing, Subcontracting Servicing, Training, Learning, Consulting

The resultant effect is the reduction in cost of business operations, improvedcustomer loyalty and retention and better quality offer to the customer. Fourmajor applications mentioned earlier make this achievement possible. We go intodetails of each one of them.Transformation stage manual systems to automated systems

The manual system which was prevalent in the organizations before industrialrevolution was slowly transformed into digital form by means of computer andrelated electronic instruments. A transformation had to necessarily go throughthe following stages

a) Appraisal of the proceduresb) Types of documentsc) Storage systemsd) Formulations and codinge) Verification and validationf) Reviewg) Documentation

2. Explain the various behavioural factors of management organization?As per Porter, how can performance of individual corporations bedetermined?

Ans:Management organizations:An organization is a structure that uses the resources from the environment likemanpower,raw materials, capital and returns the output like products and services to theenvironment.It constitutes the rules, policies, responsibilities and procedures that are adoptedby the organization.Behavioral factors

The implementation of computer based information systems in general and MSSin particular is affected by the way people perceive these systems and by howthey behave in accepting them. User resistance is a major behavioral factor

associated with the adoption of new systems. The following are compiled byJiang et al. (2000) Reasons that employees resist new systems:1. Change in job content2. Loss of status3. Change in interpersonal relationships4. Loss of power5. Change in decision making approach6. Uncertainty or unfamiliarity or misinformation7. Job security

The major behavioral factors area) Decision styles symbolic processing of AI is heuristic DSS and ANN are

analytic


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b) Need for explanation ES provides explanation, ANN does not, DSS mayprovide partial explanation. Explanation can reduce resistance to changec) Organizational climate some organizations lead and support innovations andnew technologies whereas other wait and lag behind in making changesd) Organizational expectations over expectation can result in disappointmentsand termination of innovation. Over expectation was observed in most earlyintelligent systems.e) Resistance to change can be strong in MSS because the impacts may besignificant.Performance of individual corporations:Out of many possible interpretations of a strategy an organization adopts inbusiness, it is found that a majority is concerned with competition betweencorporations. Competition means cultivating unique strengths and capabilities,and defending them against imitation by other firms. Another alternative seescompetition as a process linked to innovation in product, market, or technology.Strategic information systems theory is concerned with the use of informationtechnology to support or sharpen an enterprise's competitive strategy.

Competitive strategy is an enterprise's plan for achieving sustainablecompetitive advantage over, or reducing the edge of, its adversaries. Theperformance of individual corporations is determined by the extent to which theymanage the following (as given by Porter) a) The bargaining power of suppliersb) The bargaining power of buyerc) The threat of new entrantsd) The threat of substitute products Ande) Rivalry among existing firms.Porter's classic diagram representing these forces is indicated below.


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There are two basic factors which may be considered to be adopted byorganization in theirstrategies:a) low costb) Product differentiationEnterprise can succeed relative to their competitors if they possess sustainablecompetitiveadvantage in either of these two. Another important consideration in positioningis 'competitive scope', or the breadth of the enterprise's target markets within itsindustry, i.e. the range of product varieties it offers, the distribution channels itemploys, the types of buyers it serves, the geographic areas in which it sells, andthe array of related industries in which it competes. Under Porter's framework,enterprises have four generic strategies available to them whereby they canattain above average performance.

They are:a) Cost leadershipb) Differentiationc) Cost focus Andd) Focused differentiation.Porter's representation of them is indicated below


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According to Porter, competitive advantage grows out of the way an enterpriseorganizes and performs discrete activities. The operations of any enterprise can

be divided into a series of activities such as salespeople making sales calls,service technicians performing repairs, scientists in the laboratory designingproducts or processes, and treasurers raising capital. By performing theseactivities, enterprises create value for their customers. The ultimate value anenterprise creates is measured by the amount customers are willing to pay for itsproduct or services. A firm is profitable if this value exceeds the collective cost ofperforming all of the required activities. To gain competitive advantage over itsrivals, a firm must either provide comparable value to the customer, but performactivities more efficiently than its competitors (lower cost), or perform activitiesin a unique way that creates greater buyer value and commands a premiumprice (differentiation). As per Borden 1964, quoted in Wiseman 1988manydifferentiation bases can be classified as 4 Ps

as given below:1. Product (quality, features, options, style, brand name, packaging, sizes,services, warranties, returns) 2. Price (list, discounts, allowances, payment period, credit terms) 3. Place (channels, coverage, locations, inventory, transport) And4. Promotion (advertising, personal selling, sales promotion, publicity).

The various attributes listed above can be sharpened the firms product by thesupport of a suitable information technology.

3. Compare various types of development aspect of Information System? Explain thevarious stages of SDLC?

Ans. Development of Information Systemsa) Development and Implementation of the MISOnce the plan of MIS is made, the development of the MIS calls for determiningthe strategy of development. As discussed earlier, the plan consists of varioussystems and subsystems. The development strategy determines where to beginand in what sequence the development can take place with the sole objective ofassuring the information support.

The choice of the system or the subsystem depends on its position in the totalMIS plan, the size of the system, the user's understanding of the systems and thecomplexity and its interface with other systems. The designer first developssystems independently and starts integrating them with other systems,enlarging the system scope and meeting the varying information needs.

Determining the position of the system in the MIS is easy. The real problem is thedegree of structure, and formalization in the system and procedures which


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determine the timing and duration of development of the system. Higher thedegree of structuredness and formalization, greater is the stabilization of therules, the procedures, decision making and the understanding of the overallbusiness activity. Here, it is observed that the user's and the designer'sinteraction is smooth, and their needs are clearly understood and respectedmutually. The development becomes a method of approach with certainty ininput process and outputs.b) Prototype ApproachWhen the system is complex, the development strategy is Prototyping of theSystem.Prototyping is a process of progressively ascertaining the information needs,developing methodology, trying it out on a smaller scale with respect to the dataand the complexity, ensuring that it satisfies the needs of the users, and assessthe problems of development and implementation. This process, therefore,identifies the problem areas, inadequacies in the prototype vis--vis Fulfilment ofthe information needs. The designer then takes steps to remove theinadequacies. This may call upon changing the prototype of the system,

questioning the information needs, streamlining the operational systems andprocedures and move user interaction. In the prototyping approach, thedesigner's task becomes difficult, when there are multiple users of the samesystem and the inputs they use are used by some other users as well. Forexample, a lot of input data comes from the purchase department, which is usedin accounts and inventory management. The attitudes of various users and theirrole as the originators of the data need to be developed with a high degree ofpositivism. It requires, of all personnel, to appreciate that the information is acorporate resource, and all have to contribute as per the designated role by thedesigner to fulfil the corporate information needs. When it comes to informationthe functional, thedepartmental, the personal boundaries do not exist. This calls upon eachindividual to comply with the design needs and provide without fail thenecessary data inputs whenever required as per the specification discussed andfinalised by the designer. Bringing the multiple users on the same platform andchanging their attitudes toward information, as a corporate resource, is themanagerial task of the system designer. The qualification, experience,knowledge, of the state of art, and an understanding of the corporate business,helps considerably, in overcoming the problem of changing the attitudes of themultiple users and the originators of the data.c) Life Cycle Approach

There are many systems or subsystems in the MIS which have a life cycle, thatis, they have birth and death. Their emergence may be sudden or may be a part

of the business need, and they are very much structured and rule based. Theyhave 100% clarity of inputs and their sources, a definite set of outputs in termsof the contents and formats. These details more or less remain static from theday the system emerges and remains in that static mode for a long time. Minormodifications or changes do occur but they are not significant in terms ofhandling either by the designer or the user of the system. Such systems,therefore, have a life and they can be developed in a systematic manner, andcan be reviewed after a year or two, for significant modification, if any.


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Examples of such systems are pay roll, share accounting, basic financialaccounting,finished goods accounting and dispatching, order processing, and so on. Thesesystems have a fairly long duration of survival and they contribute in a big wayas sources of data to the Corporate MIS. Therefore, their role is important andneeds to be designed from the view point as an interface to the Corporate MIS.

Table below shows the difference between the two approaches helping thedesigner selectan approach.

d) Implementation of the Management Information SystemThe implementation of the system is a management process. It brings aboutorganizational change it affects people and changes their work style. The process evokes a behaviour response which could be either favorable orunfavorable depending upon the strategy of system implementation. In theprocess of implementation, the system designer acts as a change agent or acatalyst.


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For a successful implementation he has to handle the human factors carefully.The user of the system has a certain fear complex when a certain cultural workchange is occurring.

The first and the foremost fear is about the security to the person if thechangeover from the old to new is not a smooth one. Care has to be taken toassure the user that such fears are baseless and the responsibility, therefore,rests with the designer. The second fear is about the role played by the person inthe organization and how the change affects him. On many occasions, the newrole may reduce his importance in the organization, the work design may makethe new job impersonal, and a fear complex may get reinforced that the careerprospects may be affected. There are certain guidelines for the systems designerfor successful implementation of the system. The system designer should notquestion beyond a limit the information need of the user.1. Not to forget that his role is to offer a service and not to demand terms.2. Remember that the system design is for the use of the user and it is not thedesigner's prerogative to dictate the design features. In short, the designershould respect the demands of the user.

3. Not to mix up technical needs with the information needs. He should try todevelop suitable design with appropriate technology to meet the informationneeds. The designer should not recommend modifications of the needs, unlesstechnically infeasible.4. Impress upon the user the global nature of the system design which isrequired to meet the current and prospective information need.5. Not to challenge the application of the information in decision making. It is thesole right of the user to use the information the way he thinks proper.6. Impress upon the user that the quality of information depends on the qualityof input.7. Impress upon the user that you are one of the users in the organization andthat the information is a corporate resource and he is expected to contribute tothe development of the MIS.8. Ensure that the user makes commitment to all the requirements of the systemdesign specifications. Ensure that he appreciates that his commitmentscontribute largely to the quality of the information and successfulimplementation of the system.9. Ensure that the overall system effort has the management's acceptance.10. Enlist the user's participation from time to time, so that he is emotionallyinvolved in the process of development.11. Realize that through serving the user, he is his best guide on the complexpath of development.12. Not to expect perfect understanding and knowledge from the user as he may

be the user of a Non computerized system. Hence, the designer should beprepared to change the system specifications or even the design during thecourse of development.13. Impress upon the user that the change, which is easily possible in manualsystem, is not as easy in the computer system as it calls for changes in theprograms at cost.14. Impress upon the user that perfect information is nonexistent His role therefore still has an importance in the organization.15. Ensure that the other organization problems are resolved first before the MISis taken for development.16. Conduct periodical user meetings on systems where you get the opportunityto know the on-going difficulties of the users.

16. Train the user in computer appreciation and systems analysis as hisperception of the computerized information system will fall short of the


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designer's expectation. Implementation of the MIS in an organization is a processwhere organizational transformation takes place. This change can occur in anumber of ways.

The Lewin's model suggests three steps in this process. The first step isunfreezing the organization to make the people more receptive and interested inthe change. The second step is choosing a Course of action where the processbegins and reaches the desired level of stability, and the third step is Refreezing,where the change is consolidated and equilibrium is reinforced. Many a times,

This process is implemented through an external change agent, such as aconsultant playing the role of a catalyst. The significant problem in this task isthe resistance to change. The resistance can occur due to three reasons, viz., thefactors internal to the users of information, the factors inherent in the design ofthe system and the factors arising out of the interaction between the system andits users. The problem of resistance can be handled through education,persuasion, and participation. This itself can be achieved by improving thehuman factors, and providing incentives to the users, and eliminating theorganizational problems before implementing the system.

SDLCSystem development cycle stages are sometimes known as system study.System concepts which are important in developing business informationsystems expedite problem solving improve the quality of decision making.

The system analyst has to do a lot in this connection. They are confronted withthe challenging task of creating new systems and planning major changes in theorganization.

The system analyst gives a system development project, meaning and direction.The typical breakdown of an information systems life cycle includes a feasibilitystudy, requirements, collection and analysis, design, prototyping,implementation, validation, testing and operation. It may be represented in theform of a block diagram as shown below:

a) Feasibility study It is concerned with determining the cost effectiveness ofvarious alternatives in the designs of the information system and the prioritiesamong the various system components.b) Requirements, collection and analysis It is concerned with understandingthe mission of the information systems, that is, the application areas of thesystem within the enterprise and the problems that the system should solve.


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c) Design It is concerned with the specification of the information systemsstructure. There are two types of design: database design and applicationdesign. The database design is the design of the database design and theapplication design is the design of the application programs.d) Prototyping A prototype is a simplified implementation that is produced inorder to verify in practice that the previous phases of the design were wellconducted.e) Implementation It is concerned with the programming of the finaloperational version of the information system. Implementation alternatives arecarefully verifies and compared.f) Validation and testing It is the process of assuring that each phase of thedevelopment process is of acceptable quality and is an accurate transformationfrom the previous phase.

4. Compare & Contrast E-enterprise business model with traditionalbusiness organization model? Explain how in E-enterprise manager role& responsibilities are changed? Explain how manager is a knowledgeworker in E-enterprise?

Ans:-Managing the E enterpriseDue to Internet capabilities and web technology, traditional businessorganization definition has undergone a change where scope of the enterprisenow includes other company locations, business partners, customers andvendors. It has no geographic boundaries as it can extend its operations whereInternet works. All this is possible due to Internet and web moving traditionalpaper driven organization to information driven Internet enabled E businessenterprise. E business enterprise is open twenty four hours, and beingindependent, managers, vendors customers transact business anytime from anywhere. Internet capabilities have given E business enterprise a cutting edgecapability advantage to increase the business value. It has opened new channelsof business as buying and selling can be done on Internet. It enables to reachnew markets across the world anywhere due to communication capabilities. Ithas empowered customers and vendors / suppliers through secured access toinformation to act, wherever necessary. The cost of business operations has

come down significantly due to the elimination of paper driven processes, fastercommunication and effective collaborative working. The effect of these radicalchanges is the reduction in administrative and management overheads,reduction in inventory, faster delivery of goods and services to the customers.In E business enterprise traditional people organization based on 'CommandControl' principle is absent. It is replaced by people organization that isempowered by informationand knowledge to perform their role. They aresupported by information systems,application packages, and decision supportsystems. It is no longer functional, product, andproject or matrix organization ofpeople but E organization where people work in networkenvironment as a teamor work group in virtual mode. E business enterprise is moreprocess driven

Technology enabled and uses its own information and knowledge toperform. It is

lean in number, flat in structure, broad in scope and a learning organization.


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In E business enterprise, most of the things are electronic, use digitaltechnologies and work on databases, knowledge bases, directories anddocument repositories. The business processes are conducted through enterprisesoftware like ERP, SCM, and CRM supported by data warehouse, decisionsupport, and knowledge management systems. Today most of the businessorganizations are using Internet technology, network, and wireless technologyfor improving the business performance measured in terms of cost, efficiency,competitiveness and profitability. They are using E business .EcommerceSolutions to reach faraway locations to deliver product and services. Theenterprise solutions like ERP, SCM, and CRM run on Internet (Internet / Extranet)& Wide Area Network (WAN). The business processes across the organization andoutside run on E technology platform using digital technology. Hence today'sbusiness firm is also called E enterprise or Digital firm. The paradigm shift to Eenterprise.Has brought four transformations, namely: Domestic business to global business.

Industrial manufacturing economy to knowledge based service economy. Enterprise Resource Management to Enterprise Network Management. Manual document driven business process to paperless, automated,electronicallytransacted business process.

These transformations have made conventional organization design obsolete.The basis of conventional organization design is command & control which isnow collaborates & control. This Change has affected the organization structure,scope of operations, reporting mechanisms, work practices, workflows, andbusiness processes at large. The comparison between conventional Organizationdesign and E enterprise is summarized in Table

Comparison between Conventional Design and E OrganizationIn E enterprise, business is conducted electronically. Buyers and sellers throughInternet drive the market and Internet based web systems. Buying and selling ispossible on Internet. Books, CDs, computer, white goods and many such goodsare bought and sold on Internet. The new channel of business is well known asEcommerce. On the same lines, banking, insurance, healthcare are being

managed through Internet E banking, E billing, E audit, & use of Credit cards,Smart card, ATM, E money are the examples of the Ecommerce application. The


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digital firm, which uses Internet and web technology and uses E business AndEcommerce solutions, is a reality and is going to increase in number. MIS for Ebusiness is different compared to conventional MIS design of an organization.

The role of MIS in E business organization is to deal with changes in globalmarket and enterprises. MIS produces more knowledge based products.Knowledge management system is formally recognized as a part of MIS. It iseffectively used for strategic planning for survival and growth, increase in profitand productivity and so on. To achieve the said benefits of E businessorganization, it is necessary to redesign the organization to realize the benefitsof digital firm. The organization structure should be lean and flat. Get rid of rigidestablished infrastructure such as branch office or zonal office. Allow people towork from anywhere. Automate processes after reengineering the process to cutdown process cycle time. Make use of groupware technology on Internetplatform for faster response processing. Another challenge is to convertdomestic process design to work for international process, where integration ofmultinational information systems using different communication standards,country specific accounting practices,

and laws of security are to be adhered strictly. Internet and networkingtechnology has thrown another challenge to enlarge the scope of Organizationwhere customers and vendors become part of the organization. This technologyoffers a solution to communicate, coordinate, and collaborate with customers,vendors and business partners.

This is just not a technical change in business operations but a cultural change inthe mindset of managers and workers to look beyond the conventionalorganization. It means changing the organization behavior to take competitiveadvantage of the E business technology.

The last but not the least important is the challenge to organize and implementinformation architecture and information technology platforms, consideringmultiple locations and multiple information needs arising due to globaloperations of the business into a comprehensive MIS.

5. What do you understand by service level Agreements (SLAs)? Whyare they needed? What is the role of CIO in drafting these? Explain thevarious security hazards faced by an IS?

Ans:-A service level agreement (frequently abbreviated as SLA) is a part of aservice contract where the level of service is formally defined. In practice, theterm SLA is sometimes used to refer to the contracted delivery time (of theservice) or performance. As an example, internet service providers willcommonly include service level agreements within the terms of their contracts

with customers to define the level(s) of service being sold in plain languageterms (typically the (SLA) will in this case have a technical definition in terms ofMTTF, MTTR, various data rates, etc.)A service level agreement (SLA) is a negotiated agreement between two partieswhere one is the customer and the other is the service provider. This can be alegally binding formal or informal "contract" (see internal departmentrelationships). Contracts between the service provider and other third parties areoften (incorrectly) called SLAs as the level of service has been set by the(principal) customer, there can be no "agreement" between third parties (theseagreements are simply a "contract"). Operating Level Agreements or OLA(s),however, may be used by internal groups to support SLA(s).

The SLA records a common understanding about services, priorities,responsibilities, guarantees, and warranties. Each area of service scope should


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have the "level of service" defined. The SLA may specify the levels of availability,serviceability, performance, operation, or other attributes of the service, such asbilling. The "level of service" can also be specified as "target" and "minimum,"which allows customers to be informed what to expect (the minimum), whilstproviding a measurable (average) target value that shows the level oforganization performance. In some contracts, penalties may be agreed upon inthe case of non-compliance of the SLA (but see "internal" customers below). It isimportant to note that the "agreement" relates to the services the customerreceives, and not how the service provider delivers that service.SLAs have been used since late 1980s by fixed line telecom operators as part oftheir contracts with their corporate customers. This practice has spread such thatnow it is common for a customer to engage a service provider by including aservice-level agreement in a wide range of service contracts in practically allindustries and markets.Internal departments (such as IT, HR, and Real Estate) in larger organizationhave adopted the idea of using service-level agreements with their "internal"customers users in other departments within the same organization. One

benefit of this can be to enable the quality of service to be benchmarked withthat agreed to across multiple locations or between different business units. Thisinternal benchmarking can also be used to market test and provide a valuecomparison between an in-house department and an external service provider.Service-level agreements are, by their nature, "output" based the result of theservice as received by the customer is the subject of the "agreement." The(expert) service provider can demonstrate their value by organizing themselveswith ingenuity, capability, and knowledge to deliver the service required,perhaps in an innovative way. Organizations can also specify the way the serviceis to be delivered, through a specification (a service-level specification) andusing subordinate "objectives" other than those related to the level of service.

This type of agreement is known as an "input" SLA. This latter type ofrequirement is becoming obsolete as organizations become more demandingand shift the delivery methodology risk on to the service provider.Role of CIO in drafting SLASOne of the major responsibilities of the CIO is to establish the credibility of thesystems organization. The systems department should not only focus onproviding better service to the various lines of business but also help businessesoperate better. If the CIO wants to be taken seriously, he needs to do what otherexecutives do and have his own business metrics and performancemeasurements, so that he can effectively measure his internal businessperformance. Other business departments have them, but CIOs generally do notbecause IT has always been viewed as a cost center. Measurements in IT tend to

be vague and lacking in context. For example, 'I had 14 projects last year, and Idid them well.' But there is no real business measurement there. How manyprojects should the manager have had? Did he really have the capacity to handle14 projects? A CIO should explore running their area more like a serviceoperation rather than a cost center, and develop metrics that track theperformance of the information systems staff, as well as the equipmentcomprising the applications, infrastructure, and networks under the CIO's control.

The first step, they say, is to implement service level agreements (SLAs) withbusiness units. It sets the expectation on the technical areas of the CIO'soperations. At a minimum, they should set up what is expected and what levelsof service the equipment will provide. The underlying SLAs should be some sortof a chargeback system with business units, particularly when it comes to

apportioning staff time. If information systems are now providing a service, the


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staff needs to understand where the service is being used to be properlyremunerated or to demonstrate where the value is.

The second part of the IT operations equation is computer equipment, and CIOsmust have a firm handle on how that equipment is being used. There aresoftwares to help with the people picture, and there are other products that canmonitor hardware performance, such as network and server uptime. One of themajor roles of the CIO is to make the organization information systems savvyand increase the technological maturity of the information systems organization.A major part of the CIO's job is to make the users aware of the opportunitiesarising as a result of technical innovations, how this can help them performbetter, and familiarizing them with computers and information systemsapplications. The information systems management also has the job of helpingthe endusers adapt to the changes caused by information systems, and to encouragetheir use.Finally, CIOs need to institute life cycle management with their applications andcomputer equipment. Most IT organizations do not have any idea of the life cycle

of an application how long they want it to last, and when it needs to berefurbished, replaced, or disposed of. Lacking this knowledge, it is easy forapplications to linger long after they should be gone, and for companies to spendfar too much money on maintaining ailing applications.Security Hazards faced by an Information system:Security of the information system can be broken because of the followingreasons:i) Malfunctions: In this type of security hazard, all the components of a systemare involved. People, software and hardware errors course the biggest problem.More dangerous are the problems which are created by human beings due to theomission, neglect and incompetence.ii) Fraud and unauthorized access:This hazard is due to dishonesty,cheating or deceit.

This can be done through a) Infiltration and industrial espionageb) Tapping data from communication linesc) Unauthorized browsing through lines by online terminals, etc.iii) Power and communication failure: In some locations they are the mostfrequent hazards than any other else because availability of both of themdepends upon the location. Sometimes communication channel are busy ornoisy. There are power cuts and sometimes high voltage serge destroys asensitive component of the computer.iv) Fire hazard: it can happen because of electrical short circuits, flammable

liquids etc.v) Sabotage and riots: sometimes the employees destroy the computer centrein case of strike, lockout or there may be chances of riots in the area.vi) Natural Disasters: Natural disasters are not controllable. They are notfrequent hazards but if they happen they destroy the things or ruin them.Examples are earthquake, floods, tornadoes and lightening.vii) General hazards: this category covers many more hazards which are notcovered anywhere and difficult to define and come spontaneously.

6. Case Study: Information system in a restaurant.Ans.Case Summary:

A waiter takes an order at a table, and then enters it online via one of the sixterminals located in the restaurant dining room. The order is routed to a printer


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in the appropriate preparation area: the cold item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink. A customersmeal check-listing (bill) the items ordered and the respective prices areautomatically generated. This ordering system eliminates the old three-carbon-copy guest check system as well as any problems caused bya waiters handwriting. When the kitchen runs out of a food item, the cooks sendout an out of stock message, which will be displayed on the dining roomterminals when waiters try to order that item. This gives the waiters fasterfeedback, enabling them to give better service to the customers. Other systemfeatures aid management in the planning and control of their restaurantbusiness. The system provides up-to-the-minute information on the food itemsordered and breaks out percentages showing sales of each item versus totalsales. This helps management plan menus according to customers tastes. Thesystem also compares the weekly sales totals versus food costs, allowingplanning for tighter cost controls. In addition, whenever an order is voided, thereasons for the void are keyed in.

This may help later in management decisions, especially if the voids consistently

related to food or service. Acceptance of the system by the users is exceptionallyhigh since the waiters and waitresses were involved in the selection and designprocess. All potential users were asked to give their impressions and ideas aboutthe various systems available before one was chosen.Questions to be analysed:1. In the light of the system, describe the decisions to be made in the area ofstrategic planning, managerial control and operational control? What informationwould you require to make such decisions?2. What would make the system a more complete MIS rather than just doingtransaction processing.3. Explain the probable effects that making the system more formal would haveon the customers and the management.

Solution:1. A management information system (MIS) is an organized combination ofpeople, hardware, communication networks and data sources that collects,transforms and distributes information in an organization. An MIS helps decisionmaking by providing timely, relevant and accurate information to managers. Thephysical components of an MIS include hardware, software, database, personneland procedures.Management information is an important input for efficient performance ofvarious managerial functions at different organization levels. The informationsystem facilitates decision making. Management functions include planning,controlling and decision making. Decision making is the core of management and

aims at selecting the best alternative to achieve an objective. The decisions maybe strategic, tactical or technical. Strategic decisions are characterized byuncertainty. They are future oriented and relate directly to planning activity.

Tactical decisions cover both planning and controlling.Technical decisions pertain to implementation of specific tasks throughappropriatetechnology. Sales region analysis, cost analysis, annual budgeting, andrelocation analysisare examples of decision-support systems and management informationsystems.

There are 3 areas in the organization. They are strategic, managerial andoperational control.


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Strategic decisions are characterized by uncertainty. The decisions to be made inthe area of strategic planning are future oriented and relate directly to planningactivity. Here basicallyplanning for future that is budgets, target markets, policies, objectives etc. isdone. This is basically a top level where up-to-the minute information on the fooditems ordered and breaks out percentages showing sales of each item versustotal sales is provided. The top level where strategic planning is done comparesthe weekly sales totals versus food costs, allowing planning for tighter costcontrols. Executive support systems function at the strategic level, supportunstructured decision making, and use advanced graphics and communications.Examples of executive support systems include sales trend forecasting, budgetforecasting, operating plan development, budget forecasting, profit planning,and manpower planning.

The decisions to be made in the area of managerial control are largelydependent upon the information available to the decision makers. It is basically amiddle level where planning of menus is done and whenever an order is voided,the reasons for the void are keyed in which later helps in management decisions,

especially if the voids are related to food or service. The managerial control thatis middle level also gets customer feedback and is responsible for customersatisfaction.

The decisions to be made in the area of operational control pertain toimplementation of specific tasks through appropriate technology. This isbasically a lower level where the waiter takes the order and enters it online viaone of the six terminals located in the restaurant dining room and the order isrouted to a printer in the appropriate preparation area. The items ordered listand the respective prices are automatically generated. The cooks send out ofstock message when the kitchen runs out of a food item, which is basicallydisplayed on the dining room terminals when waiter tries to order that item.

Thisbasically gives the waiters faster feedback, enabling them to give betterservice to thecustomers. Transaction processing systems function at the operational level ofthe organization. Examples of transaction processing systems include ordertracking, order processing, machine control, plant scheduling, compensation,and securities trading.

The information required to make such decision must be such that it highlightsthe trouble spots and shows the interconnections with the other functions. Itmust summarize all information relating to the span of control of the manager.

The information required to make these decisions can be strategic, tactical oroperational information.Advantages of an online computer system:

1. Eliminates carbon copies2. Waiters handwriting issues3. Out-of-stock message4. Faster feedback helps waiters to service the customersAdvantages to management:1. Sales figures and percentages item-wise2. Helps in planning the menu3. Cost accounting detailsIf the management provides sufficient incentive for efficiency and results to theircustomers, it would make the system a more complete MIS and so the MISshould support this culture by providing such information which will aid thepromotion of efficiency in the management services and operational system. It is

also necessary to study the keys to successful Executive Information System(EIS) development and operation. Decision support systems would also make the


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system a complete MIS as it constitutes a class of computer-based informationsystems including knowledge-based systems that support decision-makingactivities. DSSs serve the management level of the organization and helpntotake decisions, which may be rapidly changing and not easily specified inadvance.Improving personal efficiency, expediting problem solving (speed up theprogress of problems solving in an organization), facilitating interpersonalcommunication, promoting learning and training, increasing organizationalcontrol, generating new evidence in support of a decision, creating a competitiveadvantage over competition, encouraging exploration and discovery on the partof the decision maker, revealing new approaches to thinking about the problemspace and helping automate the managerial processes would make the system acomplete MIS rather than just doing transaction processing.3. The management system should be an open system and MIS should be sodesigned that it highlights the critical business, operational, technological andenvironmental changes to the concerned level in the management, so that theaction can be taken to correct the situation. To make the system a success,

knowledge will have to be formalized so that machines worldwide have a sharedand common understanding of the information provided. The systems developedwill have to be able to handle enormous amounts of information very fast.An organization operates in an ever-increasing competitive, global environment.Operating in a global environment requires an organization to focus on theefficient execution of its processes, customer service, and speed to market. Toaccomplish these goals, the organization must exchange valuable informationacross different functions, levels, and business units. By making the systemmore formal, the organization can more efficiently exchange information amongits functional areas, business units, suppliers, and customers. As the transactionsare taking place every day, the system stores all the data which can be usedlater on when the hotel is in need of some financial help from financial institutesor banks. As the inventory is always entered into the system, any frauds can beeasily taken care of and if anything goes missing then it can be detected throughthe system.

MB0047 Assignment Set - 2.doc

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