Management Information Systems (MIS) Lecture Notes PDF

B.Tech – CSE (Emerging Technologies) R-20 MRCET CAMPUS (AUTONOMOUS INSTITUTION – UGC, GOVT. OF INDIA) Department of CSE (Emerging T...

B.Tech – CSE (Emerging Technologies) R-20 MRCET CAMPUS (AUTONOMOUS INSTITUTION – UGC, GOVT. OF INDIA) Department of CSE (Emerging Technologies) (INTERNET OF THINGS) B.TECH(R-20 Regulation) (III YEAR – I SEM) (2022-23) MANAGEMENT INFORMATION SYSTEMS (R20A1252) LECTURE NOTES Prepared by V. DIVYA, Assistant Professor MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY (Autonomous Institution – UGC, Govt. of India) Recognized under 2(f) and 12(B) of UGC ACT 1956 (Affiliated to JNTUH, Hyderabad, Approved by AICTE-Accredited by NBA & NAAC – ‘A’ Grade - ISO 9001:2015 Certified) Artificial Intelligence B.Tech – CSE (Emerging Technologies) R-20 Maisammaguda, Dhulapally (Post Via. Hakimpet), Secunderabad–500100, Telangana State, India Department of Computer Science and Engineering EMERGING TECHNOLOGIES Vision  “To be at the forefront of Emerging Technologies and to evolve as a Centre of Excellence in Research, Learning and Consultancy to foster the students into globally competent professionals useful to the Society.” Mission The department of CSE (Emerging Technologies) is committed to:  To offer highest Professional and Academic Standards in terms of Personal growth and satisfaction.  Make the society as the hub of emerging technologies and thereby capture opportunities in new age technologies.  To create a benchmark in the areas of Research, Education and Public Outreach.  To provide students a platform where independent learning and scientific study are encouraged with emphasis on latest engineering techniques. QUALITY POLICY  To pursue continual improvement of teaching learning process of Undergraduate and PostGraduateprogramsin Engineering &Managementvigorously.  Toprovidestateofartinfrastructureandexpertisetoimpartthequalityeducation and research environment to students for a complete learning experiences.  Developing students with a disciplined and integrated personality.  To offer quality relevant and cost effective programmes to produce engineers as per requirements of the industry need. Formoreinformation:www.mrcet.ac.in Artificial Intelligence  MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY DEPARTMENTOF EMERGING TECHNOLOGIES SYLLABUS II Year B. Tech – II Sem L/T/P/ C 3/0/3 OPEN ELECTIVE - II (R20A1252) MANAGEMENT INFORMATION SYSTEMS OBJECTIVES The course should enable the student to: 1. To understand the importance of MIS, structure and Types of MIS 2. To learn business applications of Information Systems 3. To learn about the Management of Information Systems 4. To learn how to build Information Systems 5. To know about Cyber Crime UNIT I: INTRODUCTION  MIS Importance, Definition  Nature and Scope of MIS  Structure and Classification of MIS  Information and Systems Concept  Types of Information  Information Systems for Competitive Advantages.  Case Study: MIS at any Business Establishment UNIT II: BUSINESS APPLICATIONS OF INFORMATION SYSTEMS:  E-Commerce  ERP System  DSS  Business Intelligence and Knowledge Management System  Case Study: Knowledge Management Systems at an Enterprise UNIT III: MANAGEMENT OF INFORMATION SYSTEMS:  Information system planning  System acquisition  Systems implementation evaluation and maintenance of IS  IS Security and Control  Effective of MIS  Case Study UNIT IV: BUILDING OF INFORMATION SYSTEMS  System development stages.  System development approaches  System analysis and design requirement determination  Strategies for requirement determination  Structured analysis tools  System design  Design objectives  Conceptual design and design methods  Detailed system designs UNIT V: INTRODUCTION OF CYBER CRIMES  Cyber Crime Definition and Origin of the Word  Cybercrime and Information Security  Cyber Criminals  Classification of Cybercriminals  Legal Perspectives  Indian Perspectives  Cybercrimes and Indian IT Act 2000  Global Perspective on Cybercrime  Cybercrime era (Refer Nina God Bole et al) TEXT BOOK 1. D P Goyal, Management Information Systems–Managerial Perspective, MacMillan, third Edition, 2010. REFERENCES: 1. Nina Godbole & Sunit Belapure “Cyber Security” Wiley india 2012. 2. Jawadekar, MIS Text and Cases, TMH, 2012. 3. Dr Milind M Oka “Cases in Management Information system ‘Everest, 2012. 4. A K Gupta, Sharma “Management of Systems” Macmillan, 2012. 5. Sandra Senf “Information Technology Control and Audit” 3e, CRC Press, 2012. 6. Apache OFBiz for Ecommerce and ERP – https://ofbiz.apache.org/ 7. Magneto for Ecommerce (B2B Commerce) – https://magento.com/ 8. Adempiere – ERP : http://www.adempiere.net/web/guest/welcome 9. Analytica – DSS – http://www.lumina.com 10. OpenRules – Business Rules and Decision Management system – http://openrules.com/ COURSE OUTCOMES: The students are able to: 1. To understand the importance of MIS, structure and Types of MIS 2. To learn business applications of Information Systems 3. To learn about the Management of Information Systems 4. To learn how to build Information Systems 5. To know about Cyber Crime  MALLA REDDY COLLEGE OF ENGINEERING AND TECHNOLOGY DEPARTMENT OF EMERGING TECHNOLOGIES INDEX S.NO Unit Topic 1 1 Introduction 2 1 Importance and Definition 3 1 Nature and Scope of MIS 4 1 Structure and Classification of MIS 5 1 Information and Systems Concept 6 1 Types of Information 7 1 Information Systems for Competitive Advantages 8 1 Case Study: MIS at any business Establishment 9 2 E-Commerce 10 2 ERP System 11 2 DSS 12 2 Business Intelligence and Knowledge Management System 13 2 Case Study: Knowledge Management Systems at an Enterprise 14 3 Information system Planning 15 3 System Acquisition 16 3 Systems Implementation Evaluation and Maintenance of IS 17 3 IS Security and Control 18 3 Effective of MIS 19 3 Case Study 20 4 System development stages 21 4 System development approaches 22 4 System analysis and design requirement determination 23 4 Strategies for requirement determination 24 4 Structured analysis tools 25 4 System design 26 5 Cyber Crime Definition and Origin of the Word 27 5 Cybercrime and Information Security 28 5 Cyber Criminals 29 5 Classification of Cybercriminals 30 5 Legal, Indian, Global Perspectives 31 5 Cybercrimes and Indian IT Act 2000 31 5 Cybercrime Era  UNIT-I MANAGEMENT INFORMATION SYSTEM Definition: It refers to the processing of information through computers and other intelligent devices to manage and support managerial decisions within an organization. Management Information Systems (MIS) is the study of people, technology, organizations, and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. MIS is a people- oriented field with an emphasis on service through technology. If you have an interest in technology and have the desire to use technology to improve people‘s lives, a degree in MIS may be for you. An automated system designed to provide progress and status information to management as an aid to decision making. MIS stands for management information system. Business managers at all levels of an organization, from assistant managers to executives, rely on reports generated from these systems to help them evaluate their business' daily activities or problems that arise, make decisions, and track progress. Management Information System, commonly referred to as MIS is a phrase consisting of three words: management, information and systems. Looking at these three words, it‘s easy to define Management Information Systems as systems that provide information to management. That is the simple definition of MIS that generally sums up what a Management Information System is, and what it should do. However, its role and impact on the smooth operation of a company can never be overemphasized. That is the reason why every successful company makes use of these systems in one way or another. The reason why Management Information Systems are very important in the day-to-day operation of companies is because these systems work with people, organizations, technology and relationships among the people and organizations affecting the company. MIS Importance: Management Information System is formal method of collecting information in summarized form. It is network established within an organization to provide information to managers. It provides systematic and analytical information necessary to all level of 1 managers. It helps managers to take right decision at the right time. Importance of MIS is described as follows: 1. Management Information System is always management oriented and keeps in view every level of management and gets the desired information. 2. Integrated – refers to how different components (sub systems) are actually tied up together. eg: different departments of organization linked together. 3. Useful for planning – as every organization makes log-term and short-term plans with the help of information like sales & production, capital investments, stocks etc management can easily plan.. 4. Effective Management Information System helps the management to know deviations of actual performance from pre-set targets and control things. 5. It‘s important for increasing efficiency. 6. MIS provides updated results of various departments to management. 7. MIS is highly computerized so it provides accurate results. 8. MIS adds to the intelligence, alertness, awareness of managers by providing them information in the form of progress and review reports of an ongoing activity. 9. Helps managers in decision- making. To gain the maximum benefits from your company's information system, you have to exploit all its capacities. Information systems gain their importance by processing the data from company inputs to generate information that is useful for managing your operations. To increase the information system's effectiveness, you can either add more data to make the information more accurate or use the information in new ways. Management Information Systems (MIS) not only include software systems, but the entire set of business processes and resources that are used to pull together information from functional or tactical systems. Data is then presented in a user-friendly and timely manner so that mid and upper-level managers can use it to take the right actions. The entire system is designed so that the company will meet its strategic and tactical goals. Nature and Scope of MIS: The concept of MIS is interdisciplinary in nature, i.e. it has borrowed its concepts from a large number of disciplines like Accounting, Computers, Organizations, Management, Operations Research and Behavioural Sciences, etc.MIS is neither a pure science nor an art; it is recognized as a combination of both. An information system is a logical system, which is concerned with ‗how‘ something is being accomplished and thus may be differentiated from physical system, which is the process itself and is concerned with the content or ‗what‘ is going on.MIS ,in fact encompasses both physical and information systems. There has been a lot of debate on the issue whether MIS is more management – 2 oriented or computer –oriented. Though there are advocates of both sides, MIS should be considered more of a management subject than of computers because of the simple logic that computers are just tool in the hands of managers. Computers are used for their characteristics like accuracy, speed and capacity to handle large amount of data. Nowadays MIS finds application in all functional areas of every type of business organizations at all levels. MIS caters to information needs of managers in an organization, thus its scope lies in structured as well as unstructured type of information which could be gathered from internal as well as external sources of the organization. Further, with the advent of computers and communication technology, the scope of MIS has increased manifold. Structure of MIS: Structure of MIS may be understood by looking at the physical components of the information system in an organization. The physical components of an organizational information system may be hardware, software, database, manual procedures and operating persons. A brief description of these components has been outlined in the following paragraphs: Hardware: Hardware refers to the physical data processing equipment and peripheral devices, For example, CPU, monitor, keyboard, printer, drives, tapes, communication devices, etc. Software: Software is a broad term given to the instructions or programs that direct the operating of the hardware. Software could be of two types, i.e. system software and application software. Database: The database consists of all data utilized by application software. Data is stored in files. 3 Procedures: Formal operating procedures, which are required to operate a system, such as manuals, are also regarded as physical elements. Operating Personnel: Personnel like Computer Operators, Computer Programmers, System Analysts, System Managers, etc., are the operating people of the information systems. Input and Output: Various physical inputs and outputs from the information system, existing in forms like printout, reports etc. MIS - Classification of Information: Information can be classified in a number of ways: 1. Classification by Characteristic :-Based on Anthony's classification of Management, information used in business for decisionmaking is generally categorized into three types:  Strategic Information: Strategic information is concerned with long term policy decisions that defines the objectives of a business and checks how well these objectives are met. For example, acquiring a new plant, a new product, diversification of business etc, comes under strategic information.  Tactical Information: Tactical information is concerned with the information needed for exercising control over business resources, like budgeting, quality control, service level, inventory level, productivity level etc.  Operational Information: Operational information is concerned with plant/business level information and is used to ensure proper conduction of specific operational tasks as planned/intended. Various operator specific, machine specific and shift specific jobs for quality control checks comes under this category.  4 2. Classification by Application In terms of applications, information can be categorized as:  Planning Information: These are the information needed for establishing standard norms and specifications in an organization. This information is used in strategic, tactical, and operation planning of any activity. Examples of such information are time standards, design standards.  Control Information: This information is needed for establishing control over all business activities through feedback mechanism. This information is used for controlling attainment, nature and utilization of important processes in a system. When such information reflects a deviation from the established standards, the system should induce a decision or an action leading to control.  Knowledge Information: Knowledge is defined as "information about information". Knowledge information is acquired through experience and learning, and collected from archival data and research studies.  Organizational Information: Organizational information deals with an organization’s environment, culture in the light of its objectives. Karl Weick's Organizational Information Theory emphasizes that an organization reduces its equivocality or uncertainty by collecting, managing and using these information prudently. This information is used by everybody in the organization; examples of such information are employee and payroll information.  Functional/Operational Information: This is operation specific information. For example, daily schedules in a manufacturing plant that refers to the detailed assignment of jobs to machines or machines to operators. In a service oriented business, it would be the duty roster of various personnel. This information is mostly internal to the organization.  Database Information: Database information construes large quantities of information that has multiple usage and application. Such information is stored, 5  retrieved and managed to create databases. For example, material specification or supplier information is stored for multiple users. Information and Systems Concept: An information system (IS) is an organized system for the collection, organization, storage and communication of information. More specifically, it is the study of complementary networks that people and organizations use to collect, filters, and process, create and distribute data. The concept that information is the message has different meanings in different contexts. Thus the concept of information becomes closely related to notions of constraint, communication, control, data, form, education, knowledge, meaning, understanding, mental stimuli, pattern, perception, representation, and entropy. Types of Information Systems: 1. TPS Transaction Processing System 2. MIS Management Information System 3. DSS Decision Support system 4. ESS Executive Support System 5. OAS Office Automation System 1. TPS are used primarily for structured operational, and to a lesser degree, management controlapplications. 2. MIS are used for semi--structured, management control applications. It also overlaps into the operational and strategic planning realms as well. 3. DSS are used primarily for unstructured decision-making whether that occurs at theoperational, management and strategic planning levels. 4. ESS is used primarily for structured management and strategic planning applications. 5. OAS are used as a facilitator of office correspondence and communication, 6  underlies all ofthis activity. A typical organization is divided into operational, middle, and upper level. The information requirements for users at each level differ. Towards that end, there are number of informationsystems that support each level in an organization.  Pyramid Diagram of Organizational levels and information requirements  Transaction Processing System (TPS)  Management Information System (MIS)  Decision Support System (DSS)  Artificial intelligence techniques in business  Online Analytical Processing (OLAP) Pyramid Diagram of Organizational levels and information requirements Understanding the various levels of an organization is essential to understand the information required by the users who operate at their respective levels. The following diagram illustrates the various levels of a typical organization. Operational Management Level The operational level is concerned with performing day to day business transactions of the organization. Examples of users at this level of management include cashiers at a point of sale, bank tellers, nurses in a hospital, customer care staff, etc. Users at this level use make structured decisions. This means that they have defined rules that guides them while making decisions. For example, if a store sells items on credit and they have a credit policy that has some set limit on the borrowing. All the sales person needs to decide whether to give credit to a customer or not is based on the current credit information from the system. Tactical Management Level This organization level is dominated by middle-level managers, heads of departments, supervisors, etc. The users at this level usually oversee the activities of the users at the operational management level. 7  Tactical users make semi-structured decisions. The decisions are partly based on set guidelines and judgmental calls. As an example, a tactical manager can check the credit limit and payments history of a customer and decide to make an exception to raise the credit limit for a particular customer. The decision is partly structured in the sense that the tactical manager has to use existing information to identify a payments history that benefits the organization and an allowed increase percentage. Strategic Management Level This is the most senior level in an organization. The users at this level make unstructured decisions. Senior level managers are concerned with the long-term planning of the organization. They use information from tactical managers and external data to guide them when making unstructured decisions. Transaction Processing System (TPS) Transaction processing systems are used to record day to day business transactions of the organization. They are used by users at the operational management level. The main objective of a transaction processing system is to answer routine questions such as;  How printers were sold today?  How much inventory do we have at hand?  What is the outstanding due for John Doe? By recording the day to day business transactions, TPS system provides answers to the abovequestions in a timely manner.  The decisions made by operational managers are routine and highly structured.  The information produced from the transaction processing system is very detailed. For example, banks that give out loans require that the company that a person works for should have a memorandum of understanding (MoU) with the bank. If a person whose 8 employer has a MoU with the bank applies for a loan, all that the operational staff has to do is verify the submitted documents. If they meet the requirements, then the loan application documents are processed. If they do not meet the requirements, then the client is advised to see tacticalmanagement staff to see the possibility of signing a MoU. Examples of transaction processing systems include  Point of Sale Systems – records daily sales  Payroll systems – processing employees salary, loans management, etc.  Stock Control systems – keeping track of inventory levels  Airline booking systems – flights booking management. Management Information System (MIS) Management Information Systems (MIS) are used by tactical managers to monitor the organization's current performance status. The output from a transaction processing system is used as input to a management information system. The MIS system analyzes the input with routine algorithms i.e. aggregate, compare and summarizes the results to produced reports that tactical managers use to monitor, control and predict future performance. For example, input from a point of sale system can be used to analyze trends of products that are performing well and those that are not performing well. This information can be used to make future inventory orders i.e. increasing orders for well-performing products and reduce the orders of products that are not performing well. Examples of management information systems include  Sales management systems – they get input from the point of sale system  Budgeting systems – gives an overview of how much money is spent within the organization for the short and long terms.  Human resource management system – overall welfare of the employees, staff turnover, etc. Tactical managers are responsible for the semi-structured decision. MIS systems provide the information needed to make the structured decision and based on the experience of the tactical managers, they make judgement calls i.e. predict how much of goods or inventory should be ordered for the second quarter based on the sales of the first quarter. Decision Support System (DSS) Decision support systems are used by senior management to make non-routine decisions. Decision support systems use input from internal systems (transaction processing systems and management information systems) and external systems. The main objective of decision support systems is to provide solutions to problems that are 9 unique and change frequently. Decision support systems answer questions such as;  What would be the impact of employees' performance if we double the production lot at the factory?  What would happen to our sales if a new competitor entered the market? Decision support systems use sophisticated mathematical models, and statistical techniques (probability, predictive modeling, etc.) to provide solutions, and they are very interactive. Examples of decision support systems include  Financial planning systems – it enables managers to evaluate alternative ways of achieving goals. The objective is to find the optimal way of achieving the goal. For example, the net profit for a business is calculated using the formula Total Sales less (Cost of Goods + Expenses). A financial planning system will enable senior executives to ask what if questions and adjust the values for total sales, the cost of goods, etc. to see the effect of the decision and on the net profit and find the most optimal way.  Bank loan management systems – it is used to verify the credit of the loan applicant and predict the likelihood of the loan being recovered. Artificial intelligence techniques in business Artificial intelligence systems mimic human expertise to identify patterns in large data sets. Companies such as Amazon, Facebook, and Google, etc. use artificial intelligence techniques to identify data that is most relevant to you. Let's use Facebook as an example, Facebook usually makes very accurate predictions of people that you might know or went with to school. They use the data that you provide to them, the data that your friends provide and based on this information make predictions of people that you might know. Amazon uses artificial intelligence techniques too to suggest products that you should buy also based on what you are currently getting. Google also uses artificial intelligence to give you the most relevant search results based on yourinteractions with Google and your location. These techniques have greatly contributed in making these companies very successful because they are able to provide value to their customers. Online Analytical Processing (OLAP) Online analytical processing (OLAP) is used to query and analyze multi-dimensional data and produce information that can be viewed in different ways using multiple dimensions. Let's say a company sells laptops, desktops, and Mobile device. They have four (4) branches A, B, C and D. OLAP can be used to view the total sales of each product in 10  all regions and compare the actual sales with the projected sales. Each piece of information such as product, number of sales, sales value represents a different dimension The main objective of OLAP systems is to provide answers to ad hoc queries within the shortest possible time regardless of the size of the datasets being used. Information Systems for Competitive Advantage In Management Information Systems by Effy Oz (2008), there are eight ways to gain competitive advantage: Reducing cost, raising barriers to market entrants, establishing high switching costs, creating new products or services, differentiating products or services, enhancing products or services, establishing alliances. Locking in suppliers or buyers Competitive Advantage in any industry or business venture is achieved when one particular organization performs more effectively and/or efficiently than the others in the same category. This Competitive Advantage does not have to be all encompassing of the industry and may only cover small segments. A Competitive Advantage is achieved when an organization can do any one thing, process, function, etc. more effectively and or efficiently than others in that industry segment or in some cases across the entire industry. According to the authors W.R. King, V. Grove, and E.H. Hufnagel (1989), information technology is used as a strategic tool for companies to increase their competitive advantage at a time when uncertainty is growing. The idea that information technology can contribute to the optimization of enterprise resources, enhances, enable and enhance business performance. This idea was accepted and supported by many empirical studies (V. Sethi and WR King, 1994), (Chan, SL Huff, DW Barclay, 1997), (AM Croteau and F. Bergeron, 2001). Authors Rackoff, Wiseman, and Ullrich (1985) have identified several factors that ensure computerization of competitive advantage of enterprises. They are: Modification, differentiation or changes that make the company stand out with its products and services or weaken competition and reduce the competitive advantages; Adapting and adjusting supply cutting costs, reducing consumer spending and increasing competition expenses; Company being introduced innovative products or services that result in changes in the way business is passed then in the industry; Improving growth and development by increasing volume, expanding geographically and being harmonized with suppliers and customers; Forms of mergers and alliances through various agreements in marketing etc.Since the business environment is constantly changing and evolving, the business itself changes all the time and with the growth and development information needs to ask businesses will vary. At the same time computing system needs to support growth, change and development. (Vakola and Wilson, 2004). The findings of the authors mentioned above clearly show that businesses invest in computing technology, because they believe that this technology will enable them to be more competitive (Malaga A. Ross, 2001). 11 Some other authors Urwiller and Florick (2008) noted that to create competitive difference as a result of computerization first condition are innovations in information technology, which today have become an integral part of organizational strategy and planning processes. Information Technology is not only possible, but is streamlined entity and the way to create competitive edge. To achieve competitive difference information technology and its use in business processes results in a new way of doing business (e-business) as well as providing products and services electronically. So information technology plays a crucial role in supporting the business by creating competitive advantage (Competitive Advantage), offering services and products so that customers appreciate more than the competition. This technology is able to provide operational excellence (Operational excellence), initiatives in key business branches (Major Business Initiatives) then the decision (Decision Making) and organizational transformation (Organizational Transformation). In what manner is information technology provides operational perfection (Operational Excellence) being efficient in what we do, using transaction-processing systems within the organization Transaction processing system (TPS) using Customer self-service systems(CSS) to make their offer customers their transaction processing etc. 12  UNIT-II BUSINESS APPLICATIONS OF INFORMATION SYSTEMS Business software or a business application is any software or set of computer programs used by business users to perform various business functions. These business applications are used to increase productivity, to measure productivity and to perform other business functions accurately. Technology has important effects on business operations. No matter the size of your enterprise, technology has both tangible and intangible benefits that will help you make money and produce the results your customers demand. Technological infrastructure affects the culture, efficiency and relationships of a business. For example, office software suites might include word processing, spreadsheet, database, presentation, and email applications. Graphics suites such as Adobe Creative Suite include applications for creating and editing images, while Sony Audio Master Suite is used for audio production etc. E-Commerce: E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the requirements of business organizations. It can be broadly defined as the process of buying or selling of goods or services using an electronic medium such as the Internet. E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need of business organizations, vendors and customers to reduce cost and improve the quality of goods and services while increasing the speed of delivery. Ecommerce refers to the paperless exchange of business information using the following ways −  Electronic Data Exchange (EDI)  Electronic Mail (e-mail)  Electronic Bulletin Boards  Electronic Fund Transfer (EFT)  Other Network-based technologies Features of E-Commerce: 1. Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards, electronic fund transfer via bank's website, and other modes of electronics payment. 2. 24x7 Service availability − E-commerce automates the business of enterprises and the way they provide services to their customers. It is available anytime, anywhere. 3. Advertising / Marketing − E-commerce increases the reach of advertising of products and services of businesses. It helps in better marketing management of products/services. 4. Improved Sales − Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes. 5. Support − E-commerce provides various ways to provide pre-sales and post- 13  sales assistance to provide better services to customers. 6. Inventory Management − E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficientand easy to maintain. 7. Communication improvement − E-commerce provides ways for faster, efficient, reliable communication with customers and partners. E-commerce business models can generally be categorized into the following categories.  Business - to - Business (B2B)  Business - to - Consumer (B2C)  Consumer - to - Consumer (C2C)  Consumer - to - Business (C2B)  Business - to - Government (B2G)  Government - to - Business (G2B)  Government - to - Citizen (G2C) Business - to - Business A website following the B2B business model sells its products to an intermediate buyer who then sells the product to the final customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, sells the end product to the final customer who comes to buy the product at one of its retail outlets. Business - to - Consumer A website following the B2C business model sells its products directly to a customer. A customer can view the products shown on the website. The customer can choose a product and order the same. The website will then send a notification to the business organization via email and the organization will dispatch the product/goods to the customer. Consumer - to - Consumer A website following the C2C business model helps consumers to sell their assets like residential property, cars, motorcycles, etc., or rent a room by publishing their information on the website. Website may or may not charge the consumer for its services. Another consumer may opt to buy the product of the first customer by 14  viewing the post/advertisement on the website. Consumer - to - Business In this model, a consumer approaches a website showing multiple business organizations for a particular service. The consumer places an estimate of amount he/she wants to spend for a particular service. For example, the comparison of interest rates of personal loan/car loan provided by various banks via websites. A business organization who fulfils the consumer's requirement within the specified budget, approaches the customer and provides its services. Business - to - Government B2G model is a variant of B2B model. Such websites are used by governments to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government. Government - to – Business Governments use B2G model websites to approach business organizations. Such websites support auctions, tenders, and application submission functionalities. 15 Government - to - Citizen Governments use G2C model websites to approach citizen in general. Such websites support auctions of vehicles, machinery, or any other material. Such website also provides services like registration for birth, marriage or death certificates. The main objective of G2C websites is to reduce the average time for fulfilling citizen‘s requests for various government services. E-Commerce advantages can be broadly classified in three major categories − 1. Advantages to Organizations 2. Advantages to Consumers 3. Advantages to Society 1. Advantages to Organizations Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.  E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information.  E-commerce improves the brand image of the company.  E-commerce helps organization to provide better customer services.  E-commerce helps to simplify the business processes and makes them faster and efficient.  E-commerce reduces the paper work.  E-commerce increases the productivity of organizations. It supports "pull" type supply management. In "pull" type supply management, a business process starts when a request comes from a customer and it uses just-in-time manufacturing way. 2.Advantages to Customers  It provides 24x7 supports. Customers can enquire about a product or service and place orders anytime, anywhere from any location.  E-commerce application provides users with more options and quicker delivery of products.  E-commerce application provides users with more options to compare and select the cheaper and better options. 16   A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.  E-commerce provides options of virtual auctions.  It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.  E-Commerce increases the competition among organizationsand as a result, organizations provide substantial discounts to customers. 3. Advantages to Society Customers need not travel to shop a product, thus less traffic on road and low air pollution.  E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.  E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.  E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner. The disadvantages of e-commerce can be broadly classified into two major categories − 1. Technical disadvantages 2. Non-Technical disadvantages Technical Disadvantages There can be lack of system security, reliability or standards owing to poor implementation of e-commerce.  The software development industry is still evolving and keeps changing rapidly.  In many countries, network bandwidth might cause an issue.  Special types of web servers or other software might be required by the vendor, setting the e-commerce environment apart from network servers.  Sometimes, it becomes difficult to integrate an e-commerce software or website with existing applications or databases.  There could be software/hardware compatibility issues, as some e-commerce software may be incompatible with some operating system or any other component. Non-Technical Disadvantages  Initial cost − The cost of creating/building an e-commerce application in-house may be very high. There could be delays in launching an e-Commerce application due to mistakes, and lack of experience.  User resistance − Users may not trust the site being an unknown faceless seller. Such mistrust makes it difficult to convince traditional users to switch from physical stores to online/virtual stores.  Security/ Privacy − It is difficult to ensure the security or privacy on online transactions.  Lack of touch or feel of products during online shopping is a drawback.  E-commerce applications are still evolving and changing rapidly. 17   Internet access is still not cheaper and is inconvenient to use for many potential customers, for example, those living in remote villages. ERP SYSTEM:- Enterprise Resource Planning (ERP) is a software that is built to organizations belonging to different industrial sectors, regardless of their size and strength. The ERP package is designed to support and integrate almost every functional area of a business process such as procurement of goods and services, sale and distribution, finance, accountings, human resource, manufacturing, production planning, logistics & warehouse management. Functional Areas ERP is a business management software is usually a suite of integrated applications that a company can use to collect, store, manage, and interpret data from many functional areas including −  Financial Accounting − Deals with financial transactions and data.  Human Resource − Deals with information related to employee of an organization.  Customer Relationship Management − Deals with capturing and managing customer‘s relationship, facilitating the use of customer experience to evaluate the knowledge database.  Sales and Distribution − Deals with order placement, delivery, shipment and invoicing.  Logistics and Warehouse Management − Deals with storage of products and shipment.  Manufacturing and Material Management − Deals with the production and production planning activities. 18   Supply Change Management − Deals with the movement of products, storing, managing, and controlling supplies.  Business Intelligence − Analyzes data and converts the same to information. Computers have become so complex and commonplace in organizations, it is much easier to integrate all of the data and processing software modules and hardware into one large unit that is easier to access and control. This is called Enterprise Resource Planning, or ERP. Normally ERP systems use the same database throughout an entire company to store various types of data for different computerized functions. When first developed, ERP systems were used only for large manufacturing companies. Today, they benefit all sizes of companies, even those that are quite small. Foundation for Understanding ERP Systems: During early phases of development, integrated solutions were designed for particular process areas such as −  Material Management − the integrated system was known as Material Requirement Planning (MRP)  Manufacturing − the integrated system was known as Manufacturing Resource Planning However none of the integrated systems came with a complete solution for an organization covering major business process areas. In early 1990‘s, the Gartner Group first used the acronym ERP. By mid–1990‘s, ERP systems addressed all the core enterprise functions. In the early stages, most of the ERP solutions were focused on automating back office functions that were not directly affecting customers or general public. Later, front office functions such as customer relationship management and e–business systems were integrated. What is ERP software? ERP software has its roots in the Nineties manufacturing industry, where earlier forms of the applications were used for manufacturing resource planning (MRP) and computer integrated manufacturing (CIM). However, ERP has grown to cover all core functions of a business, regardless of its industry sector. As a result, both private and public sector organisations now use ERP systems in some form or other. ERP applications tend to be modular in nature, sharing vital business information which is held on a central database repository, or repositories. What does ERP software do? ERP systems typically carry out financial and business planning functions, which might formerly have been carried out by many smaller standalone applications. Examples of ERP system modules include: product lifecycle management, supply chain management (for example purchasing, manufacturing and distribution), warehouse management, customer relationship management (CRM), sales order processing, online sales, financials, human resources, and decision support system. 19 Why use ERP software? One major benefit of having a single modular ERP system is that it can unite and link together multiple processes and parts of the business, making the business run more efficiently. By automating various functions, you can also benefit from having, for example, good order tracking, from acceptance through to fulfilment. In terms of the revenue cycle, you can track invoices through to cash receipts. ERP systems also centralise the data in one place, which can eliminate the problem of synchronising changes between multiple systems, and allows business managers to get a more accurate view of the business‘s information. Having a single data repository can also lower the risk of losing sensitive data, if you use appropriate data security and authorisation. What are the drawbacks of ERP systems? ERP systems can prove to be complex and difficult to customise, keeping in mind the actual complexities and idiosyncrasies of each individual business itself. Many firms fail to adequately invest in ongoing training for the involved IT personnel, and there is often a lack of corporate policy to protect the integrity of the data in the ERP systems and the ways in which it is used. Business processes frequently have to be re-engineered to fit the new ERP system, and this can lead to problems with processes and staff. Also, ERP systems can be very expensive. This has led to a newer breed of simpler ERP systems for smaller enterprises which carry a lower cost, and many established ERP vendors now offer managed ERP services, offered over the web. Finally, the fact that ERP systems centralise the data in one place can increase the risk of loss of sensitive information in the event of a security breach. Popular ERP Vendors 1. Microsoft Dynamics 2. Oracle e-Business Suite 3. SAGE 4. SAP Business One 5. Infor Global Solutions 6. NetERP from NetSuite 20  7. Lawson Software Business benefits of ERP: 1. Competition 2. Efficiency 3. Forecasting 4. Collaboration 5. Scalability 6. Integrated Information 7. Cost Saving 8. Streamlined Processes 9. Mobility 10.Reporting 11.Productivity 12. Regulatory Compliance 13.Flexibility 14.Customer Service 15.Security Decision support systems (DSS) Decision support systems (DSS) are interactive software-based systems intended to help managers in decision-making by accessing large volumes of information generated from various related information systems involved in organizational business processes, such as office automation system, transaction processing system, etc. DSS uses the summary information, exceptions, patterns, and trends using the analytical models. A decision support system helps in decision-making but does not necessarily give a decision itself. The decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions. Characteristics of a DSS  Support for decision-makers in semi-structured and unstructured problems.  Support for managers at various managerial levels, ranging from top executive to line managers.  Support for individuals and groups. Less structured problems often requires the involvement of several individuals from different departments and organization level.  Support for interdependent or sequential decisions.  Support for intelligence, design, choice, and implementation.  Support for variety of decision processes and styles.  DSSs are adaptive over time. 21 Classification of DSS There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows:  Text Oriented DSS: It contains textually represented information that could have a bearing on decision. It allows documents to be electronically created, revised and viewed as needed.  Database Oriented DSS: Database plays a major role here; it contains organized and highly structured data.  Spreadsheet Oriented DSS: It contains information in spread sheets that allows create, view, modify procedural knowledge and also instructs the system to execute self- contained instructions. The most popular tool is Excel and Lotus 1- 2-3.  Solver Oriented DSS: It is based on a solver, which is an algorithm or procedure written for performing certain calculations and particular program type.  Rules Oriented DSS: It follows certain procedures adopted as rules.  Rules Oriented DSS: Procedures are adopted in rules oriented DSS. Export system is the example.  Compound DSS: It is built by using two or more of the five structures explained above. Types of DSS Following are some typical DSS:  Status Inquiry System: It helps in taking operational, management level, or middle level management decisions, for example daily schedules of jobs to machines or machines to operators.  Data Analysis System: It needs comparative analysis and makes use of formula or an algorithm, for example cash flow analysis, inventory analysis etc.  Information Analysis System: In this system data is analyzed and the information report is generated. For example, sales analysis, accounts receivable systems, market analysis etc.  Accounting System: It keeps track of accounting and finance related information, for example, final account, accounts receivables, accounts payables, etc. that keep track of the major aspects of the business.  Model Based System: Simulation models or optimization models used for decision- making are used infrequently and creates general guidelines for operation or management. 22 Model of Decision Support System:- Business Intelligence System: The term 'Business Intelligence' has evolved from the decision support systems and gained strength with the technology and applications like data warehouses, Executive Information Systems and Online Analytical Processing (OLAP). Business Intelligence System is basically a system used for finding patterns from existing data from operations. Characteristics of BIS  It is created by procuring data and information for use in decision-making.  It is a combination of skills, processes, technologies, applications and practices.  It contains background data along with the reporting tools.  It is a combination of a set of concepts and methods strengthened by fact-based support systems.  It is an extension of Executive Support System or Executive Information System.  It collects, integrates, stores, analyzes, and provides access to business information  It is an environment in which business users get reliable, secure, consistent, comprehensible, easily manipulated and timely information.  It provides business insights that lead to better, faster, more relevant decisions. 23 Benefits of BIS  Improved Management Processes.  Planning, controlling, measuring and/or applying changes that results in increased revenues and reduced costs.  Improved business operations.  Fraud detection, order processing, purchasing that results in increased revenues and reduced costs.  Intelligent prediction of future. Knowledge Management System: A knowledge management system comprises a range of practices used in an organization to identify, create, represent, distribute, and enable adoption to insight and experience. Such insights and experience comprise knowledge, either embodied in individual or embedded in organizational processes and practices. Purpose of KMS  Improved performance  Competitive advantage  Innovation  Sharing of knowledge  Integration  Continuous improvement by:  Driving strategy  Starting new lines of business  Solving problems faster  Developing professional skills  Recruit and retain talent Activities in Knowledge Management  Start with the business problem and the business value to be delivered first.  Identify what kind of strategy to pursue to deliver this value and address the KM problem.  Think about the system required from a people and process point of view.  Finally, think about what kind of technical infrastructure are required to support the people and processes.  Implement system and processes with appropriate change management and iterative staged release. 24  UNIT-III MANAGEMENT OF INFORMATION RESOURCES Information Systems Planning: Information management is term that covers array of the systems and processes within an organisation to create and use of corporate information. Information Systems Planning is critical in developing and executing successful strategic plans in huge firms at global level. It is observed in current business situation that the markets are very uncertain which pushes companies to adopt effective, pro-active strategies in order to gain competitive advantage. The strategy formula is oriented through company's operation and objectives based on a cautious analysis of the involving company. Objectives of information system planning are desired future positions and destinations the organizations intend to reach in order to fulfil its mission. Its policies are a general guideline that directs and constraints decision making within an organization. Information technology enables a set of opportunities to gain competitive advantage and to adjust the Information Systems for the benefit of organization. In present scenario, information system planning is key issue faced by senior executives of company. Information management planning mainly involves in identification of the stage of IS in the organization, identification of the applications of organizational information systems, evaluation of each of these applications, based on established evaluation criteria, establishing a priority ranking for these application and determining the optimum architecture of IS for serving the top priority applications. Theoretical literature of the information systems planning suggests two challenging theories of effective planning in a turbulent environment. One predicts that organizations using a formal, comprehensive 25 planning approach will be more successful. The other predicts that organizations using an informal, incremental approach will be more successful in such an environment. Stage model of Information System planning 1. Strategic planning: a) Derivation from the organizational plan. b) Strategic fit with organizational culture. c) Strategy set transformation. 2. Information requirement analysis: a) Define underlying organizational requirements. b) Develop sub system matrix. c) Define and evaluate information requirements for organizational sub-systems. 3. Resource allocation: a) Return on investment b) Charge out c) Portfolio approach d) Steering committees. 4. Project planning a) Milestones b) Critical path method c) Gantt chart Four Stage Models of Information Systems Planning Acquisition of Information Systems: An acquisition strategy is a top-level roadmap that focuses on highlighting and managing risks to a successful outcome. Business requirements for supporting work processes require integration across multiple systems, spanning multiple business or organizational units. 26 The acquisition of information systems can either involve external sourcing or rely on internal development or modification. With today's highly developed IT industry, companies tend to acquire information systems and services from specialized vendors. Information systems are a major corporate asset, with respect both to the benefits they provide and to their high costs. Therefore, organizations have to plan for the long term when acquiring information systems and services that will support business initiatives. At the same time, firms have to be responsive to emerging opportunities. On the basis of long-term corporate plans and the requirements of various individuals from data workers to top management, essential applications are identified and project priorities are set. For example, certain projects may have to be carried out immediately to satisfy a new government reporting regulation or to interact with a new customer‘s information system. Other projects may be given a higher priority because of their strategic role or greater expected benefits. Once the need for a specific information system has been established, the system has to be acquired. This is generally done in the context of the already existing information systems architecture of the firm. The acquisition of information systems can either involve external sourcing or rely on internal development or modification. With today‘s highly developed IT industry, companies tend to acquire information systems and services from specialized vendors. The principal tasks of information systems specialists involve modifying the applications for their employer‘s needs and integrating the applications to create coherent systems architecture for the firm. Generally, only smaller applications are developed internally. Certain applications of a more personal nature may be developed by the end users themselves. Acquisition from external sources There are several principal ways to acquire an information system from outside the organization.  Outsourcing: Outsourcing entails transferring the major components of the firm‘s systems and operations—such as data centres, telecommunications.  Software: A specialized company that provides its services under long-term contracts.  Offshoring: Offshore outsourcing, a type of business process outsourcing (BPO), is the exporting of IT-related work from the United States and other developed countries to areas of the world where there is both political stability and lower labor costs or tax savings.  Cloud Computing: Cloud computing is a method for delivering information technology (IT) services in which resources are retrieved from the Internet through web-based tools and applications, as opposed to a direct connection to a server. 27   Internet: A means of connecting a computer to any other computer anywhere in the world via dedicated routers and servers.  Software-as-a-Service: SaaS is software licensing model in which access to the software is provided on a subscription basis, with the software being located on external servers rather than on servers located in-house.  Open Source: Software for which the original source code is made freely available and may be redistributed and modified according to the requirement of the user. Implementation of Information Systems: The design of a management information system may seem to management to be an expensive project, the cost of getting the MIS on line satisfactorily may often be comparable to that of its design, and the implementation has been accomplished when the outputs of the MIS are continuously utilized by decision makers. Once the design has been completed, there are four basic methods for implementing the MIS. These areas: 1. Install the system in a new operation or organization. 2. Cut off the old system and install the new This produces a time gap during which no system is in operation. Practically, installation requires one or two days for small companies or small systems. 3. Cut over by segments This method is also referred as‖ phasing in‖ the new system. Small parts or subsystems are substituted for the old. In the case of upgrading old systems, this may be a very desirable method. 4. Operate in parallel and cut over. The new system is installed and operated in parallel with the current system until it has been checked out, then only the current system is cut out. This method is expensive because of personal and related costs. Its big advantages are that the system is fairly well debugged when it becomes the essential information system. Implementation Tasks Plan the implementation The three main phases in implementation take place in series. These are 1. The initial installation 2. The test of the system as a whole 3. The evaluation, maintenance and control of the system. 28 Many implementation activities should be undertaken in parallel to reduce implementation time. Training of personnel and preparation of software may be in parallel with each other and with other implementation activities. The first step in the implementation procedure is to plan the implementation. Some analyst includes the planning of the implementation with the design of the system, the planning and the action to implement the plan should be bound closely together. Planning is the first step of management, not the last. The MIS design and the urgent need for the system at the time the design is completed will weigh heavily on the plan for implementation. The major implementation tasks consists of- 1. Planning the implementation activities 2. Acquiring and laying out facilities and offices 3. Organizing the personnel for implementation 4. Developing procedures for installation and testing 5. Developing the training program for operating personnel. 6. Completing the system‘s software 7. Acquiring required hardware 8. Generating files 9. Designing forms 10. Testing the entire system 11.Completing cutover to the new system 12.Documenting the system 13.Evaluating the MIS 14.Providing system maintenance (debugging and improving) 1. Planning the implementation activities Establish Relationships among tasks For small projects, the order of performance may simply be described in text form. A Gantt chart or network diagram makes visualization of the plan and schedule much clearer. For large projects, many concurrent and sequential activities are interrelated so that a network diagram must be employed in any good plan. Establish a Schedule Schedule is prepared by having the system designers estimate the times between the events in the program network. The critical path (longest time through the network) can be calculated. After specifying the starting date, the end date is established. 29 Cost Schedule to Tasks and Time The cost for completing each task required to complete is established as part of the plan; then the rate of expenditures should be budgeted. Reporting and control of the work in progress may be obtained by weekly meetings. The financial personnel must make certain that report formats allow them to show cost and technical progress relationship as well as cost and time. 2.Acquiring and laying out facilities and offices For the installation of a new system to replace a current one may require a major revision of facilities as well as completely new office, computer room etc. The MIS project manager must prepare rough layouts and estimates of particular floor areas that feel to be needed. The manager then prepares cost estimates. Space planning must be done by the space to be occupied by people, the space occupied by equipment and the movement of people and equipment in the work progress. A large investment in good working conditions will repay its cost many times. 3.Organizing the personnel for implementation As the implementation tasks have been defined, management usually assigns a project manager to guide the implementation. The purpose of the MIS is to increase the amount and quality of their contributions, the system is their system. Top management must make the middle managers for their involvement in implementation, besides these, systems specialists, computer programmer; top management should make sure that each people who will operate the system should have active parts in the implementation. 4.Developing procedures for installation and testing After organizing the personnel for implementation the next task is to develop or prepare the procedures for implementation. As the project leader has the network plan for proceeding with the implementation, this leader calls the key people in the project to prepare more detailed procedures for system installation. Procedures for evaluating and selecting hardware must be spelled out. Procedures for phasing in parts of the MIS or operating the MIS in parallel must be developed. The major part of implementing the MIS is the testing of each segment of total system as it is installed. 30 5. Developing the training program for operating personnel A program is developed keeping in mind to impress management and support. After developing the program, it is necessary to train operating personnel in their new duties. They must have a thorough understanding of what the new MIS is like and what it is supposed to do. They must learn how it will operate. They are faced with many changes in their work and have to obtain acceptance of changes. As there are various levels of personnel and these people will be working with only a small part of the MIS, the seminars should be designed to provide them with an understanding of the complete system. 6.Completing the system’s software As the software is developed internally or under contract, in both cases, the software development must take in mind the nature of the hardware required. As the system designers and programmers provide the flow diagrams and the block diagrams during the detailed design state. Some modification may be required, as the implementation stage progresses. 7. Acquiring required hardware This acquisition is usually the limiting factor in getting am MIS implementation. These tasks should be started during the design stage. The decision is to be needed, whether to buy or lease the hardware. Capital expenditure analysis is only one of many factors involved in this decision. Others are prestige, usage etc. 8. Generating files In the implementation stage, the actual data must be obtained and recorded for the initial testing and operation of the system. This requires format of the data, storage form and format and remarks to indicate when the data have been stored. The collection of data used in routine operations is often called the master file. Responsibility for file maintenance for each file item should also be assigned. The development of files or databases belongs to information system designers and storage and retrieval experts. The translation of specifications for files into computer programs is a function of computer specialists. 9. Designing forms 31  For controlling the marketing, a salesperson has to fill out the forms summarizing the day‘s activities. The form ensures the right information to be supplied for computer storage. Forms are required not just for input and output but also for transmitting data at intermediate stages. 10. Testing the entire system As the total system is installed, tests should be performed with the test specifications and procedure. A test during installation stage consists of component tests, subsystem tests and total system acceptance tests. Components may be equipment (that can be new or old), new software programs, new data collection methods, work procedures, reporting formats. Difficulties that occur during component tests may lead t design changes. As more components are installed, subsystems may be tested. There is a difference between the testing of component and the testing of a system. System tests require verification of multiple inputs, complex logic systems, and timing aspects of many parts. 11. completing cutover to the new system Cutover is a point at which the new component replaces the old component to the new system replaces the old system. This involves old forms, old files and old equipment being retried. The debugging proves associated with the cutover to the new system may extend for several months 12. Documenting the system Documentation of the MIS means preparation of written descriptions of the scope, purpose, information flow components, and operating procedures of the system. Documentation is a necessity for troubleshooting, for replacement of subsystems, for interfacing with other systems, for training new operating personnel and also for evaluating and upgrading the system. 13. Evaluating the system After the MIS has been operating smoothly for a short period of time, an evaluation of each step in the design and of the final system performance should be made. Evaluation should not be delayed beyond the time when the system‘s analysts have completed most of the debugging. The longer the delay, the more difficult it will be for designer to remember important details. The evaluation should be made by the customer as well as by the designers. 32 14. Providing system maintenance Control and maintenance of the system are the responsibilities of the line managers. Control of the systems means the operation of the system as it was designed to operate. Sometimes, well-intentioned people or operators may make unauthorized changes to improve thesystem, changes that are not approved or documented. Maintenance is closely related to control. Maintenance is that ongoing activity that keeps theMIS at the highest levels of effectiveness and efficiency within cost constraints. Maintenance is directed towards reducing errors due to design, reducing errors due to environmental changes and improving the system‘s scope and services. Evaluation of Information Systems: Evaluation of MIS is an integral part of the management control process, in which the organizations determine or appraise the quality or worth of their information systems. In other words, evaluation of MIS is a process of measuring performance of organizational information systems. Evaluation Approaches: There are different approaches to evaluate MIS in an organization. The MIS evaluation approaches provide different means to measure accomplishments of system objectives.  Quality Assurance Review: Quality assurance review or technical review focus on assessing the information system‘s technical quality.  Compliance Audits: Compliance audits or application control reviews assess the adequacy and completeness of controls for the system inputs, outputs, processing, security and access.  Budget Performance Review: Evaluation of MIS budget performance concentrates on compliance with a predetermined budget expenditure level for the MIS development or operations process.  MIS Personnel Productivity Measurements: The capability of MIS personnel is typically determined in terms of productivity.  Computer Performance Evaluation: The production capability of the computer hardware is typically evaluated in terms of performance efficiencies and bottlenecks that limit production.  Service Level Monitoring: Service level monitoring focuses on assessing the information and support provided to the user, based on the terms established between the MIS user personnel.  User Attitude Survey: This method is used in operational evaluation. Operational considerations refer to whether the input data is adequately provided and the output is usable. 33   Post-Installation Review: The focus of the post-installation review (PIR) is often on estimating whether the system meets the requirements.  Cost Benefit Analysis: It is also known as economic evaluation. The analysis quantifies the system‘s effect on organizational performance in terms of dollars. Evaluation of Performance: 1. Effectiveness: This refers to the quality of the outputs from the systems. Effectiveness means doing the right thing in the right manner so that desired result may be achieved. Information system is said to be effective if its product (i.e. output) is of quality, and the process of producing output is right (effective). 2. Efficiency: It is a measure of the amount of resources required to achieve the output, i.e. the use of system resources to get results. Being efficient implies the system is operating the right way. Product-Based MIS Evaluation: Since the focus of the product-based evaluation is on the product or the output from the system, the evaluation may be termed as effectiveness evaluation. For assessing the effectiveness of output form MIS, the following model may be used. Model Structure: Timeliness Relevance Accuracy Completeness Adequacy Explicitness Exception-based Cost-Benefit-Based MIS Evaluation: In cost/benefit evaluation, a thorough study of various expected costs, the benefits to be expected from the system and expected savings, if any, is done. It is an economic evaluation 34 of the system, in which costs to be incurred for developing, implementing and operating a system are to be justified against the expected benefits from the system. In other words, cost/benefit analysis determines the cost-effectiveness of the firms. Cost Elements:  Initial Development Cost: it incurred in developing an information system. Various elements of development cost include project planning cost, feasibility study cost, design cost, conversation cost, implementation cost etc.  Capital Cost: It is also one-time cost. It is the cost incurred in facilities and in procuring various equipment, including hardware etc.  Annual Operating Cost: It is the cost incurred in operating the system. It includes computer and equipment maintenance cost, personnel cost, overheads, and supplies cost.  Identification of Cost and Benefits: Certain costs and benefits are more easily identifiable than others. For example, direct cost.  Classification of Cost and Benefits: The various categories of costs and benefits are important to make a cost/benefit analysis. These categories may be tangible or intangible, direct or indirect, fixed or variable. Evaluation Models: Having identified and categorised various costs and benefits, monetary value of each and every cost as well as benefit is estimated. A system analyst/user manager may evaluate the costs and benefits so estimated. For evaluation, there are several models, which are available, namely: i. Net Benefit Analysis ii. Present Value Analysis iii. Net Present Value iv. Payback Method v. Cash-flow Analysis vi. Break-even Analysis etc. Maintenance of Information systems: The results obtained from the evaluation process help the organization to determine whether its information systems are effective and efficient or otherwise. The process of monitoring, evaluating, and modifying of existing information systems to make required or desirable improvements may be termed as System Maintenance. System maintenance is an ongoing activity, which covers a wide variety of activities, including removing program and design errors, updating documentation and test data and 35 updating user support. For the purpose of convenience, maintenance may be categorized into three classes, namely: i) Corrective Maintenance: This type of maintenance implies removing errors in a program, which might have crept in the system due to faulty design or wrong assumptions. Thus, in corrective maintenance, processing or performance failures are repaired. ii) Adaptive Maintenance: In adaptive maintenance, program functions are changed to enable the information system to satisfy the information needs of the user. This type of maintenance may become necessary because of organizational changes which may include: a) Change in the organizational procedures, b) Change in organizational objectives, goals, policies, etc. c) Change in forms, d) Change in information needs of managers. e) Change in system controls and security needs, etc. iii) Perfective Maintenance: Perfective maintenance means adding new programs or modifying the existing programs to enhance the performance of the information system. This type of maintenance undertaken to respond to user‘s additional needs which may be due to the changes within or outside of the organization. Outside changes are primarily environmental changes, which may in the absence of system maintenance; render the information system ineffective and inefficient. These environmental changes include: a) Changes in governmental policies, laws, etc., b) Economic and competitive conditions, and c) New technology. IS SECURITY and CONTROL: Today, organizations are increasingly becoming dependent on information systems/technology. However these systems are vulnerable to a large number of potential hazards, especially due tonetworked computing. Therefore, IS control and security is an important issue of concern for themanagement. Some of the major threats to the information systems are as follows:  Error in handling, entering, transferring, or programming data  Equipment malfunctions  Accidental or malicious damage to computer resources  Destruction from virus  Theft of equipment and/or programs  Inappropriate use of data  Loss, theft, or changes of data, 36  Fire or any other natural calamity UNIT – IV Building of Information Systems 37 What is Information Systems Development? As the name suggests, information system development or commonly known as SLC (Systems Life Cycle) or SLDC (Software Development Life Cycle) is a process of making and changing the system and the model and methodology used. In other words, an SDLC is the preparation of a new system to replace the old system, both in whole and only partially. Development of information systems is generally done because of problems that cannot be accommodated by the old system. For example, the hospital where you work make an overhaul SIMRS (Sistem Informasi Manajemen Rumah Sakit/Hospital Management Information System) because of applications that previously could not do bridging with BPJS. Considering the fact that the government has required it, then inevitably the hospital must adjust the SIMRS it already has. As for carrying out an information system development, the related team will consist of several personnel, namely the project coordinator, system analyst and design, network designer, programmer, technician (hardware), administrator, software tester, graphic designer, and documentary. Information System Planning: Information systems planning (ISP) is a process of defining objectives for organizational computing and identifying suitable potential information technology (IT) applicable to the company. The increasing impact of information systems (IS) on business performance has made ISP a key management issue for practitioners and academics alike (Moynihan, 1990; Niederman et al., 1991). In China, since IT began to be applied either to support business strategies or to create strategic opportunities, investment in information systems has increased rapidly. Some Chinese companies, such as Bangwei, Lifung, have gained great success by applying IT. But for most Chinese companies, it is still a challenge to align IT with their business strategies. Information systems planning has gained much attention in recent years. A survey in 2005 reported that ISP was one of the key management issues for chief information officers (CIOs) of China (Yang, 2003, Li and Huang, 2005). Within information systems research, significant effort has been devoted to improving the planning effectiveness. Early studies focused on developing frameworks and methodologies for ISP. Some methodologies, such as Business System Planning (BSP), information engineering, and critical success factors (CSFs), are well known to scholars and practitioners alike. Although existing frameworks and methodologies provide some direction for information systems planning, many important dimensions of ISP remain unaddressed (Segars et al., 1998). For example, it is not clear how a methodology is (or should be) actually implemented and how the process of planning is initiated. To provide a comprehensive view of ISP, some studies were conducted to identify the process dimensions. Das et al. (1991) and Lederer and Sethi (1996) developed process dimensions (prescriptions) to describe the planning process. Earl (1993), Pyburn (1983) and Sabherwal and King (1995) identified the differences among various companies’ IS planning processes or IS decision-making through field studies. Segars et al. (1998) developed process dimensions and empirically tested their impact on planning effectiveness. Although these studies of dimensions provided some descriptions of the planning process, they have not been implemented in China and the relationships among the process dimensions remain unclear. Information systems planning is a system which is structured by the process dimensions. So, there may be certain relationships among different process dimensions. Understanding these relationships can help practitioners and academics view the ISP more systemically, especially for current Chinese enterprises. The purpose of this study is to propose a process model to describe the current Chinese enterprises’ structure of ISP, which exhibits not only the relationship between process dimensions and the effectiveness of the planning process, but also the relationships among different dimensions of the planning process. The remainder of the paper is organized as follows. Section 2 discusses and provides process dimensions of ISP. Section 3 presents the process model and proposes related hypotheses, followed by outlining analytical techniques and item measurements. Empirical test results, study implications and limitations are discussed in the last section. 38 Information System Development Stages An information system development consists of six important stages, it is system survey, needs analysis, design, implementation, testing, change and maintenance.  System survey  Needs Analysis  Design  Implementation  Testing  Change and Maintenance 1. System Survey The SLDC phase also consists of three main points: system identification, selection, and system planning. a. System Identification This process is to identify the problems facing the company and the system it has. The team will look for any opportunities that can be done to overcome this. b. Selection The selection phase will apply evaluation points to the development project to ensure the solutions are created in accordance with the company’s expected targets. c. System Planning This step is the step of developing a formal plan to start working on and implementing the information system development concept that has been chosen. 2. Needs Analysis 39  System requirements analysis is a technique for solving problems by decomposing the components of the system. The aim is none other than to find out more about how each component works and the interaction between one component with other components. Some aspects that need to be targeted in the needs analysis in the development of information systems include business users, job analysis, business processes, agreed rules, problems and solutions, business tools, and business plans. 3. Design The design or design of system development is intended to provide a complete blueprint as a guideline for the IT team (especially programmers) in making applications. Thus the IT team no longer makes decisions or works in a sporadic way. 4. Implementation The stage of developing this information system is to work on a previously designed development. 5. Testing A system needs to be tested to ensure that the development carried out is appropriate or not with the expected results. Tests that are applied are various, such as performance, input efficiency, syntax (program logic), output, and so on. This information system development stage requires preparation of various supporting aspects. In addition to applications, hardware readiness and several other related facilities also need to be prepared. As for implementation, several activities carried out include data migration (conversion), training for users, and trials. 6. Change and Maintenance This step covers the whole process in order to ensure the continuity, smoothness and improvement of the system. In addition to monitoring the system at a certain time, maintenance also includes activities to anticipate minor bugs (bugs), system improvements, and anticipation of some risks from factors outside the system. Thus, information about the development of information systems or SLDC. May be useful! Approaches of MIS Development: MIS development is a strategic process of developing an informative information system for a company. To do this, many experts from different levels of a system sit together and investigates and examine a feasible approach to MIS development. An approach is a method of developing a system in such a way so that it can be designed as per system needs and meet all the system objectives. MIS (Management Information System) is an important source of information for an organization. An approach of MIS development offers some significant facts for the organizations that influence each approach. MIS approaches to distinguish between each other; organizations are using an appropriate MIS development approach as per their need. There are 3 different types of MIS – 1. Top-down approach 2. Bottom-up approach 3. Integrative approach 40  1. Top-Down Approach: In this method, the entire system is partitioned into a hierarchy of subsystems. The overall system is divided into a number of subsystems, which are then divided into a number of other subsystems in a top-down approach. A behavioural classification is used in the top-down approach of MIS development. This approach also defines the strategic and tactical decisions and the necessary decisions to operate the various key activities of MIS development. Many of them, strategies, goals, and plans are recognized by top management executives and conveyed to the administrative management levels. The key objectives of the systems are established and ways to achieve them are decided in top-down design. They're gradually pushed down the organizational hierarchy to be created and defined well. 2. Bottom-Up Approach As its name implies, this approach mainly starts with the leaf-level or bottom-most management and proceeds progressively to the upper management levels. After recognizing the primary transactions, the needed file requirements and information processing programs are developed for each life stream system which is then moved towards data integration that is stored in different 41  files of the information system. A bottom-up approach is functional to identify the various factors and understand the difficult situations and formulate strategies to deal with them. 3. Integrative Approach In the integrative approach subsystems of a system are integrated with each other in such a way so that the objective of the system can be fulfilled. An integrative approach of a system development may consist of followings -  Design a system that can be achieving the major objectives of the system using its subsystems.   Designing a system that combines the various functions performed by its subsystems.  Designing a system that is not very clear to the user but is concealed under the previously existing subsystems. Managers at all levels can control the design using an integrated approach. Top management determines the structure and design of MIS that is appropriate for the business. What is Requirements Determination? A requirement is a vital feature of a new system which may include processing or capturing of data, controlling the activities of business, producing information and supporting the management. Requirements determination involves studying the existing system and gathering details to find out what are the requirements, how it works, and where improvements should be made. OBJECTIVES  Understand how to create a requirements definition  Become familiar with requirements-analysis techniques  Understand when to use each requirements-analysis technique  Understand how to gather requirements using interviews, JAD sessions, questionnaires, document analysis, and observation  Understand the use of concept maps, story cards, and task lists as requirements-documentation techniques  Understand when to use each requirements-gathering technique  Be able to begin creating a system proposal 42 Major Activities in requirement Determination Requirements Anticipation  It predicts the characteristics of system based on previous experience which include certain problems or features and requirements for a new system.  It can lead to analysis of areas that would otherwise go unnoticed by inexperienced analyst. But if shortcuts are taken and bias is introduced in conducting the investigation, then requirement Anticipation can be half-baked. Requirements Investigation  It is studying the current system and documenting its features for further analysis.  It is at the heart of system analysis where analyst documenting and describing system features using fact-finding techniques, prototyping, and computer assisted tools. Requirements Specifications  It includes the analysis of data which determine the requirement specification, description of features for new system, and specifying what information requirements will be provided.  It includes analysis of factual data, identification of essential requirements, and selection of Requirement-fulfilment strategies. Information Gathering Techniques The main aim of fact finding techniques is to determine the information requirements of an organization used by analy