The Study Hall College

Affiliated to University of Lucknow

BBA VI Sem
Management Information System
UNIT – I

Information System and its Major

Components
An information system (IS) is a formal, sociotechnical, organizational system designed to
collect, process, store, and distribute information. In a sociotechnical perspective, information
systems are composed by four components: task, people, structure (or roles), and technology.

A computer information system is a system composed of people and computers that processes or
interprets information. The term is also sometimes used in more restricted senses to refer to only
the software used to run a computerized database or to refer to only a computer system.

Information Systems is an academic study of systems with a specific reference to information

and the complementary networks of hardware and software that people and organizations use to
collect, filter, process, create and also distribute data. An emphasis is placed on an information
system having a definitive boundary, users, processors, storage, inputs, outputs and the
aforementioned communication networks.

Any specific information system aims to support operations, management and decision-making.
An information system is the information and communication technology (ICT) that an
organization uses, and also the way in which people interact with this technology in support of
business processes.

Some authors make a clear distinction between information systems, computer systems, and
business processes. Information systems typically include an ICT component but are not purely
concerned with ICT, focusing instead on the end use of information technology. Information
systems are also different from business processes. Information systems help to control the
performance of business processes.

Alter argues for advantages of viewing an information system as a special type of work system.
A work system is a system in which humans or machines perform processes and activities using
resources to produce specific products or services for customers. An information system is a
work system whose activities are devoted to capturing, transmitting, storing, retrieving,
manipulating and displaying information.
As such, information systems inter-relate with data systems on the one hand and activity systems
on the other. An information system is a form of communication system in which data represent
and are processed as a form of social memory. An information system can also be considered a
semi-formal language which supports human decision making and action.

Components of Information Systems

The computer age introduced a new element to businesses, universities, and a multitude of other
organizations: a set of components called the information system, which deals with collecting
and organizing data and information. An information system is described as having five
components.

1. Computer hardware

This is the physical technology that works with information. Hardware can be as small as a
smartphone that fits in a pocket or as large as a supercomputer that fills a building. Hardware
also includes the peripheral devices that work with computers, such as keyboards, external disk
drives, and routers. With the rise of the Internet of things, in which anything from home
appliances to cars to clothes will be able to receive and transmit data, sensors that interact with
computers are permeating the human environment.

2. Computer software

The hardware needs to know what to do, and that is the role of software. Software can be divided
into two types: system software and application software. The primary piece of system software
is the operating system, such as Windows or iOS, which manages the hardware’s operation.
Application software is designed for specific tasks, such as handling a spreadsheet, creating a
document, or designing a Web page.

3. Telecommunications

This component connects the hardware together to form a network. Connections can be through
wires, such as Ethernet cables or fibre optics, or wireless, such as through Wi-Fi. A network can
be designed to tie together computers in a specific area, such as an office or a school, through a
local area network (LAN). If computers are more dispersed, the network is called a wide area
network (WAN). The Internet itself can be considered a network of networks.

4. Databases and data warehouses

This component is where the “material” that the other components work with resides. A database
is a place where data is collected and from which it can be retrieved by querying it using one or
more specific criteria. A data warehouse contains all of the data in whatever form that an
organization needs. Databases and data warehouses have assumed even greater importance in
information systems with the emergence of “big data,” a term for the truly massive amounts of
data that can be collected and analyzed.
 5. Human resources and procedures

The final, and possibly most important, component of information systems is the human element:
the people that are needed to run the system and the procedures they follow so that the
knowledge in the huge databases and data warehouses can be turned into learning that can
interpret what has happened in the past and guide future action.
Information Systems in Business
Business information systems are sets of inter-related procedures using IT infrastructure in a
business enterprise to generate and disseminate desired information.

Such systems are designed to support decision making by the people associated with the
enterprise in the process of attainment of its objectives.

The business information system gets data and other resources of IT infrastructure as input from
the environment and process them to satisfy the information needs of different entities associated
with the business enterprise.

There are systems of control over the use of IT resources and the feedback system offers useful
clues for increasing the benefits of information systems to business. The business information
systems are sub-systems of business system and by themselves serve the function of feedback
and control in business system.

Features of Business Information System

Characteristics & features of business information system are:-

1. The business information systems are subject to the dynamics of business environment
and need to be flexible enough to absorb the inevitable changes in the information needs
of business. They have to be efficient to satisfy the demanding and ‘hard task masters,’
the business managers. Thus, there is need to balance the conflicting objectives in the
process of designing business information systems.
 2. Business information systems need to be proactive. They should anticipate changes in
information needs of users and accordingly adapt themselves to suit their needs. This has
become important because of the fact that the managers get involved in the routine
activities to the extent that the decision making becomes a matter of imitating what
competitors are doing or planning to do, rather than making an informed choice.
3. The purpose of business information system is to cater to the information needs for
decision making in business.
4. The business information systems have to be designed keeping in view the availability of
financial and human resources to the business enterprise.
5. The cost effectiveness is a matter of prime concern in the development and maintenance
of business information systems. Economic justification for investment in IT
infrastructure for business information systems is a pre condition for its existence and
sustenance.

Key Components of Business Information System

Information systems can be described by four of their key components which are:

1. Decisions
2. Transactions and processing
3. Information and its flow
4. Individuals or functions involved.

It is difficult to observe the decision process through we can see and review the results of a
decision. Transactions are usually more visible, though many current systems use computer
programs, which are not easy to understand, to process transactions. In principle, an observer can
see information and its flows. Individuals can be observed too, but it is not always easy to figure
out the information processing functions they perform.
Influence of Information Systems in
Transforming Businesses
Information systems have transformed the way businesses operate and compete in the modern
era. The integration of technology into various business functions has allowed companies to
streamline their operations, improve their decision-making processes, and enhance their overall
efficiency.

Information systems have transformed businesses by improving decision-making processes,

increasing efficiency, enhancing the customer experience, improving supply chain management,
and increasing access to new markets. As technology continues to evolve, businesses must
continue to invest in information systems to remain competitive in the modern business
landscape.

Improved Decision Making

One of the most significant impacts of information systems on businesses is the ability to provide
managers with real-time data that can be used to make informed decisions. For example, with the
help of a data analytics system, a retailer can track sales, customer behavior, and inventory levels
in real-time. This information can be used to make decisions regarding pricing, inventory
management, and marketing strategies. This helps businesses to respond to changes in the market
quickly and make informed decisions.

Increased Efficiency

Information systems can automate routine tasks and improve business processes, which reduces
the time and resources required to complete them. For example, an online booking system can
streamline the booking process for a hotel, eliminating the need for manual booking processes.
Similarly, inventory management systems can automate the ordering process, reducing the time
and resources required to manage inventory.

Enhanced Customer Experience

Information systems can be used to collect and analyze customer data, allowing businesses to
create personalized experiences that cater to the individual needs of their customers. For
example, an online retailer can use customer data to provide personalized product
recommendations, customized promotions, and more. This improves the customer experience
and enhances customer loyalty.

Improved Supply Chain Management

Information systems can be used to manage the supply chain more efficiently. This includes
managing inventory, tracking shipments, and ensuring timely delivery of goods. This leads to
better coordination between suppliers, manufacturers, and retailers, resulting in a more efficient
supply chain that reduces costs and increases productivity.

Increased Access to Markets

Information systems can help businesses expand their reach and access new markets. For
example, a business can use e-commerce platforms to sell products and services to customers
around the world, regardless of physical location. This provides businesses with access to new
markets, customers, and revenue streams.
Global E-Businesses and Collaborations
Global e-businesses and collaborations refer to the integration of electronic technologies into the
business processes of companies operating on a global scale. This integration enables companies
to expand their operations beyond their physical boundaries, connect with customers and
partners from different parts of the world, and collaborate with other businesses to create value.

Global e-businesses and collaborations have revolutionized the way businesses operate. With the
help of technology, businesses can expand their reach, access new markets, optimize their supply
chain management systems, collaborate with other businesses, and reduce costs. As technology
continues to evolve, businesses must continue to adapt to remain competitive in the global
marketplace.

E-commerce

E-commerce refers to the buying and selling of goods and services over the internet. This has
enabled businesses to expand their reach and sell their products and services to customers from
all over the world. E-commerce has also enabled businesses to operate 24/7, allowing customers
to purchase products at any time. With the help of digital marketing, businesses can target
specific audiences, resulting in more efficient and effective marketing campaigns.

Digital Payments

Digital payments have revolutionized the way businesses operate. With the help of digital
payment platforms, businesses can securely and quickly send and receive payments from
customers and partners from all over the world. This has made international transactions more
accessible and efficient, reducing the time and cost required to complete them.

Supply Chain Management

Global e-businesses have enabled businesses to optimize their supply chain management systems
by automating the processes involved in sourcing, production, and distribution. With the help of
technology, businesses can track inventory levels, monitor production processes, and manage
logistics in real-time, resulting in a more efficient supply chain.

Collaborations

Collaborations between businesses have become easier with the help of digital technologies.
Companies can collaborate with other businesses from different parts of the world, allowing
them to access new markets and expand their operations. For example, a business can collaborate
with a supplier from a different country to reduce costs or work with a partner to create new
products or services.
Cloud Computing

Cloud computing has enabled businesses to store and process large amounts of data without the
need for physical servers. This has reduced the cost of data storage and processing, making it
more accessible to businesses of all sizes. Cloud computing has also enabled businesses to access
data from anywhere in the world, making collaboration and remote work easier.

Global E-Businesses and Collaborations importance

Global e-businesses and collaborations are of great importance to businesses operating in the
modern era. The integration of electronic technologies into business processes has enabled
businesses to expand their operations beyond their physical boundaries, connect with customers
and partners from different parts of the world, and collaborate with other businesses to create
value.

Expanded Reach

Global e-businesses have enabled businesses to expand their reach beyond their local markets.
With the help of e-commerce platforms, businesses can sell their products and services to
customers from all over the world, regardless of physical location. This has enabled businesses to
access new markets and increase their customer base, resulting in increased revenue and
profitability.

Reduced Costs

Global e-businesses and collaborations have enabled businesses to reduce costs associated with
traditional business processes. For example, businesses can reduce the cost of storage and
processing data by using cloud computing. Similarly, businesses can reduce the cost of
manufacturing by collaborating with suppliers from different parts of the world.

Improved Efficiency

Global e-businesses and collaborations have enabled businesses to improve their efficiency by
automating routine tasks and optimizing business processes. With the help of technology,
businesses can track inventory levels, monitor production processes, and manage logistics in
real-time, resulting in a more efficient supply chain. This has reduced the time and resources
required to complete business processes, resulting in increased productivity.

Enhanced Customer Experience

Global e-businesses have enabled businesses to provide customers with a personalized

experience that caters to their individual needs. With the help of digital marketing, businesses
can target specific audiences and provide them with customized offers and promotions. This has
enhanced the customer experience, resulting in increased customer loyalty and repeat business.

Access to New Markets

Global e-businesses and collaborations have enabled businesses to access new markets and
expand their operations. By collaborating with other businesses from different parts of the world,
businesses can access new markets and expand their product or service offerings. This has
enabled businesses to create new revenue streams and increase their profitability.
Strategic roles of Information Systems
Information systems play a critical strategic role in organizations by providing support for the
management of business operations and decision-making.

Improving Operational Efficiency

Information systems are used to automate business processes, reducing the time and effort
required to complete routine tasks. For example, an enterprise resource planning (ERP) system
can integrate business functions such as accounting, inventory management, and human
resources management, resulting in improved efficiency and productivity.

Enhancing Decision Making

Information systems provide decision-makers with real-time access to critical information,

enabling them to make informed decisions. Decision support systems (DSS) provide data
analysis and modeling tools, enabling managers to analyze complex data and make informed
decisions.

Creating Competitive Advantage

Information systems can provide organizations with a competitive advantage by enabling them to
differentiate their products or services from those of their competitors. For example, an
organization can use customer relationship management (CRM) systems to provide personalized
customer experiences that differentiate their products or services.

Facilitating Collaboration

Information systems can facilitate collaboration among employees, suppliers, and customers,
enabling them to share information and work together on projects. For example, project
management systems can enable teams to work on projects from different locations, resulting in
improved productivity and reduced costs.

Enabling Innovation

Information systems can enable innovation by providing organizations with the tools and
resources necessary to develop new products or services. For example, computer-aided design
(CAD) systems can enable organizations to design and develop new products, while simulation
and modelling tools can help them test and refine their designs.

Steps to achieve Strategic roles of Information Systems

Achieving the strategic role of information systems requires careful planning, implementation,
and management. Here are some steps to follow:
Define the organization’s business strategy:

The first step in achieving the strategic role of information systems is to define the organization’s
business strategy. This involves identifying the organization’s goals, objectives, and competitive
advantages. The information systems strategy should be aligned with the business strategy.

Identify the information needs:

Once the business strategy has been defined, the next step is to identify the information needs of
the organization. This involves identifying the types of information required, the sources of
information, and the frequency of information needed.

Determine the information systems requirements:

Based on the information needs, the organization should determine the information systems
requirements. This involves identifying the hardware, software, and network infrastructure
required to support the information systems.

Develop an information systems plan:

The next step is to develop an information systems plan. This plan should outline the objectives,
scope, and budget of the information systems project. It should also include a timeline and a risk
management plan.

Implement the information systems:

After the information systems plan has been developed, the organization should implement the
information systems. This involves installing the hardware and software, configuring the
network, and training the users.

Monitor and evaluate the information systems:

Once the information systems have been implemented, the organization should monitor and
evaluate their performance. This involves measuring the effectiveness of the information systems
in meeting the information needs of the organization. It also involves identifying areas for
improvement.

Align the information systems with the business strategy:

Finally, the information systems should be aligned with the business strategy. This involves
ensuring that the information systems are meeting the goals and objectives of the organization. It
also involves making adjustments to the information systems as needed to ensure that they
continue to support the business strategy.
Behavioural, Technical and Socio-technical
approaches
Behavioural, technical, and socio-technical approaches are three different perspectives for
understanding and designing information systems. Each approach focuses on different aspects of
information systems and has different strengths and weaknesses.

The behavioural, technical, and socio-technical approaches each have their own strengths and
weaknesses, and may be more or less appropriate depending on the specific context and goals of
the information system being designed. A comprehensive approach that takes into account all
three perspectives can lead to more effective and sustainable information systems.

Behavioural approach:

The behavioural approach focuses on understanding the behaviour of users and how they interact
with information systems. This approach emphasizes the human element of information systems,
including user attitudes, behaviours, and motivations. The behavioural approach uses techniques
such as interviews, surveys, and observations to gather data about users and their interactions
with information systems. The strengths of this approach are that it considers the user experience
and can lead to more user-friendly and effective systems. The weakness is that it may not
consider technical limitations or cost considerations.

 Using positive reinforcement to encourage desired behaviours, such as giving employees

bonuses for meeting sales targets.
 Using punishment to discourage unwanted behaviours, such as disciplining employees
who consistently show up late for work.

Technical approach:

The technical approach focuses on the technical aspects of information systems, including the
hardware, software, and network infrastructure. This approach emphasizes the efficiency,
reliability, and performance of the system. The technical approach uses techniques such as
system analysis and design, programming, and testing to create and implement information
systems. The strengths of this approach are that it produces technically sound and efficient
systems. The weakness is that it may not consider the user experience or socio-technical factors.

 Implementing a new software system to automate repetitive tasks and reduce errors.
 Introducing new machinery or equipment to improve production processes.

Socio-technical approach:

The socio-technical approach focuses on the interaction between people, technology, and the
organizational context in which they operate. This approach emphasizes the importance of
understanding the social and organizational context in which information systems are used. The
socio-technical approach uses techniques such as participatory design, ethnographic research,
and change management to design and implement information systems that are effective and
sustainable. The strengths of this approach are that it considers both technical and social factors,
leading to systems that are more effective and accepted by users. The weakness is that it may be
more complex and time-consuming than other approaches.

 Redesigning work processes to better align with the skills and abilities of employees,
while also utilizing technology to enhance productivity.
 Encouraging collaboration and communication among team members to foster a positive
work environment and improve outcomes.
Enhancing Business Processes through
Information Systems
Enhancing business processes through information systems (IS) involves leveraging technology
to improve the efficiency, effectiveness, and quality of organizational processes.

Enhancing business processes through IS can provide organizations with a competitive

advantage by improving efficiency, reducing costs, and enhancing customer satisfaction.
However, it is important to ensure that IS implementation is aligned with the organization’s
strategy, culture, and goals, and that employees are trained and engaged in the process.

Here are some ways that IS can be used to enhance business processes:

Automating Routine Tasks:

Information Systems can be used to automate routine, repetitive tasks that are prone to errors and
require significant time and effort. For example, an online booking system can automate the
process of making reservations, reducing the need for manual entry and improving accuracy.

Improving Communication and Collaboration:

Information Systems can facilitate communication and collaboration among employees,

customers, and partners. For instance, an organization can use a project management system that
enables team members to share information, collaborate on documents, and track project
progress in real-time.

Enhancing Decision-making:

Information Systems can be used to provide real-time information to decision-makers, enabling

them to make better decisions quickly. For example, an organization can use a business
intelligence system that provides real-time data visualization and analysis tools, enabling
managers to make data-driven decisions.

Streamlining Operations:

Information Systems can be used to streamline operations and improve the flow of work
processes. For instance, an organization can use an enterprise resource planning (ERP) system
that integrates all of its business processes into a single system, reducing duplication of effort
and improving data accuracy.

Enhancing Customer Service:

Information Systems can be used to improve customer service by providing customers with easy
access to information and support. For example, an organization can use a customer relationship
management (CRM) system that tracks customer interactions and provides personalized support
and recommendations.

There are several approaches to enhancing business processes through information systems (IS).
Here are three common approaches:

Business Process Reengineering (BPR):

BPR involves the radical redesign of business processes to achieve significant improvements in
performance, efficiency, and quality. This approach involves questioning existing assumptions
and rethinking the way work is done, often resulting in the elimination of non-value-adding
activities. IS can be used to automate and streamline redesigned processes, resulting in
significant improvements in performance.

Continuous Process Improvement (CPI):

CPI involves the ongoing effort to improve business processes through incremental changes.
This approach involves identifying areas for improvement and implementing small changes that
can be quickly tested and refined. IS can be used to support CPI initiatives by providing real-
time data and analysis tools that enable teams to identify opportunities for improvement and
monitor progress.

Lean Six Sigma:

Lean Six Sigma is a methodology that combines the principles of lean manufacturing and Six
Sigma to improve quality and reduce waste. This approach involves identifying and eliminating
non-value-adding activities and reducing process variability. IS can be used to support Lean Six
Sigma initiatives by providing real-time data on process performance, enabling teams to identify
opportunities for improvement and monitor progress.
Types of Business Information Systems:
Transaction Processing System (TPS)
A transaction process system (TPS) is an information processing system for business
transactions involving the collection, modification and retrieval of all transaction data.
Characteristics of a TPS include performance, reliability and consistency.

TPS is also known as transaction processing or real-time processing.

A transaction process system and transaction processing are often contrasted with a batch
process system and batch processing, where many requests are all executed at one time. The
former requires the interaction of a user, whereas batch processing does not require user
involvement. In batch processing the results of each transaction are not immediately available.
Additionally, there is a delay while the many requests are being organized, stored and eventually
executed. In transaction processing there is no delay and the results of each transaction are
immediately available. During the delay time for batch processing, errors can occur. Although
errors can occur in transaction processing, they are infrequent and tolerated, but do not warrant
shutting down the entire system.

To achieve performance, reliability and consistency, data must be readily accessible in a data
warehouse, backup procedures must be in place and the recovery process must be in place to deal
with system failure, human failure, computer viruses, software applications or natural disasters.

Features of Transaction Processing System

There are several features involved in a good transaction processing system. A few of these
critical features are described below.

1. Performance

The concept behind the use of TPS is to efficiently generate timely results for transactions.
Effectiveness is based on the number of transactions they can process at a particular time.

2. Continuous availability

The transaction processing system should be a very stable and reliable system that must not crash
easily. Disruption of TPS in an organization can lead to work disturbance and financial loss.

3. Data integrity

The TPS must maintain the same method for all transactions processed, the system must be
designed to effectively protect data and overcome any hardware/ software issues.
 4. Ease of use

The TPS should be user-friendly in order to encourage the use and also decrease errors from
inputting data. It should be structured in such a way that it makes it easy to understand as well as
guarding users against making errors during data-entry.

5. Modular growth

The TPS hardware and software components should be able to be upgraded individually without
requiring a complete overhaul.

6. Controlled processing

Only authorized personnel, staff members, or employees should be able to access the system at a
time.

Types of Transaction Processing Systems

1. Batch processing

Batch processing is when clusters of transactions are refined simultaneously using a computer
system.

This method, although designed to be efficient for breaking down bulky series of programs, has a
drawback as there is a delay in the transaction result.

2. Real-time Processing

Real-time processing carries out its transactions exclusively; this method ensures a swift reply on
the condition of the transaction result. It is an ideal technique for dealing with singular
transactions.

How does a Transaction Processing System Work?

1. Processing in a batch

Processing batch transactions requires data collection and batch grouping. Data collected are
stored in the form of batches and may be processed anytime. This long-established technique
was used widely in the absence of infotech.

2. Processing in real-time

Recent technology innovations gave rise to real-time processing. RTP ensures instant data
processing with the aim of providing a quick verification of the transaction. It is highly versatile
as it can work effectively as a multi-user interface and can also be accessed anywhere there is an
online network.
Components of Transaction Processing System

Below are some of the components involved in a TPS:

 Inputs: These are source documents gotten from transactions which serve as inputs into
the computer’s accounting system examples are invoices, and customer orders.
 Processing: This requires the breaking down of information provided by the inputs.
 Storage: This is saved information in TPS memory, it may be in the form of ledgers.
 Output: Any generated record may serve as the output

Examples of Transaction Processing System

 TPS accumulates data about transactions and also initiates processing that transforms
stored data. Examples include order processing, employee records, and hotel reservation
systems.
 Batch transaction process examples include bill generation and check clearances.
 Examples of real-time transaction processes are the point of sale terminals (P.O.S) and
microfinance loan systems.

Limitations of Transaction Processing Systems

 Managing operations with the TPS can be complicated if the company is not big enough
to efficiently use the transaction processing system.
 TPS needs both hardware and software components to efficiently manage high data
volume. This capacity makes TPSs susceptible to software security breaches in the form
of the virus and faulty hardware issues such as power outage can disrupt the whole
system.
 Effective integration of a TPS in a company operation requires skilled personnel, it also
requires a link with associate company branches to maintain a secure flow of information.
This high requirement can create instability and flux in the company’s daily operations.

Functions of Transaction Processing System

Transaction Processing Systems can execute input, output, storage, and processing functions.

(i) Input functions

This includes the securing of data on the source document, entering of input data in the system
and also validate data.

(ii) Output functions

This includes the production of the report of the transaction via monitor or paper, examples are
exception reports, detail reports, and summary reports.

(iii) Storage functions

This is the process by which data is stored. It entails the storage of information, accessing,
sorting, and updating stored data.

(iv) Processing functions

This entails the transformation of data, it includes calculation, computation, and apt result.

Types of Recovery

 Backup Recovery: this can be used to reverse required changes to a record.

 Forward Recovery: this can be used to save transactions made between the last backup
and the up to date time.it works by backing up a copy of the database and it is more
proficient because it does not need to save each transaction.

A Transaction Processing System (TPS) is an infotech used to accumulate, store, modify and
retrieve data transactions. Transaction processing systems present a unique response to user
requirements, although planning to choose the most appropriate method relies heavily on the
quantity of data and the type of business.
Management Information System (MIS)
Concept, Types, Process, Advantages and
Disadvantages
A management information system (MIS) is an information system used for decision-making,
and for the coordination, control, analysis, and visualization of information in an organization.

The study of the management information systems testing people, processes and technology in
an organizational context.

Management Information Systems (MIS) refer to the integration of information technology,

individuals, and business procedures to capture, store, and process data with the objective of
generating valuable insights for day-to-day decision-making. By extracting data from diverse
sources, MIS facilitates the production of information that empowers decision-makers and fuels
business growth.

 Need for Management Information Systems (MIS)

Management Information Systems (MIS) play a vital role in enabling decision-makers to access
essential information for making effective choices. These systems also facilitate seamless
communication within and outside the organization. Internally, employees can readily access the
necessary information for day-to-day operations, while externally, communication with
customers and suppliers is streamlined through features like Short Message Service (SMS) and
Email integrated within the MIS system.

Additionally, MIS systems serve as comprehensive record-keeping tools, meticulously capturing

all business transactions of an organization. They act as a reliable reference point, providing a
historical record and valuable insights into past activities and financial dealings.

Components of Management Information Systems (MIS):

1. People: The users who interact with the information system, including employees and
managers.
2. Data: The recorded information that the system processes and stores, such as transaction
data and business records.
3. Business Procedures: The set of established procedures and guidelines for data
recording, storage, and analysis within the system.
4. Hardware: The physical components that make up the system, including servers,
workstations, networking equipment, and printers.
5. Software: The programs and applications used to manage and handle the data, such as
spreadsheet software and database systems.
Types of Information Systems

1. Transaction Processing Systems (TPS): Used to record and manage day-to-day

business transactions. An example is a Point of Sale (POS) system, which tracks daily
sales.
2. Management Information Systems (MIS): These systems guide middle-level managers
in making semi-structured decisions. They use data from the Transaction Processing
System as input.
3. Decision Support Systems (DSS): Utilized by top-level managers for semi-structured
decision-making. DSS systems receive data from the Management Information System
and external sources like market forces and competitors.

Process of Management Information System (MIS):

1. Data Collection:

 Source of Data: MIS collects data from various sources, including internal databases,
external sources, and manual inputs.
 Methods: Data may be collected through automated systems, surveys, or direct inputs.

2. Data Processing:
  Transformation: Raw data is processed and transformed into meaningful information.
 Analysis: MIS conducts data analysis to derive insights and trends.
 Normalization: Data is organized and normalized for consistency.

3. Information Storage:

 Database: Processed information is stored in databases or data warehouses.

 Structured Storage: MIS organizes data in a structured manner for easy retrieval.

4. Information Retrieval:

 Querying: Users can query the MIS for specific information.

 Reporting: MIS generates reports, dashboards, and summaries based on user needs.

5. Information Dissemination:

 Distribution: MIS distributes information to relevant users and stakeholders.

 Presentation: Information is presented in a user-friendly format, such as charts or graphs.

6. Decision Support:

 Analysis Tools: MIS provides decision support tools for managers.

 Scenario Analysis: Managers can use MIS for scenario analysis and planning.

7. Feedback Mechanism:

 Monitoring: MIS monitors the implementation of decisions.

 Feedback Loop: MIS establishes a feedback loop for continuous improvement.

Advantages of Management Information System (MIS):

1. Improved Decision-Making:

 Access to Information: MIS provides timely and accurate information for decision-
making.
 Informed Choices: Managers can make well-informed decisions based on real-time data.

2. Enhanced Efficiency:

 Automation: MIS automates routine tasks, reducing manual effort.

 Streamlined Processes: Efficiency is improved through streamlined workflows.

3. Strategic Planning:

 Long-Term Insights: MIS supports strategic planning with historical data and trend
analysis.
  Goal Alignment: Strategic goals can be aligned with available resources and capabilities.

4. Better Communication:

 Centralized Information: MIS centralizes information, facilitating communication across

departments.
 Collaboration: Improved communication enhances collaboration among team members.

5. Resource Optimization:

 Resource Allocation: MIS assists in optimal resource allocation.

 Cost Reduction: Identifying inefficiencies leads to cost reduction.

6. Competitive Advantage:

 Market Intelligence: MIS provides insights into market trends and competitor activities.
 Adaptability: Organizations can adapt quickly to changing market conditions.

7. Data Accuracy and Integrity:

 Validation: MIS ensures data accuracy through validation processes.

 Integrity: The system maintains data integrity, preventing inconsistencies.

8. Performance Monitoring:

 KPIs and Metrics: MIS monitors key performance indicators (KPIs) and metrics.
 Continuous Improvement: Regular performance monitoring facilitates continuous
improvement.

Disadvantages of Management Information System (MIS):

1. Implementation Costs:

 Initial Investment: Setting up an MIS involves significant initial costs.

 Maintenance Expenses: Ongoing maintenance and updates add to the costs.

2. Complex Implementation:

 Technical Expertise: Implementation requires skilled IT professionals.

 Integration Challenges: Integrating MIS with existing systems can be complex.

3. Security Concerns:

 Data Vulnerability: MIS poses security risks, with sensitive data being vulnerable.
 Unauthorized Access: The risk of unauthorized access and data breaches exists.
 4. Resistance to Change:

 Employee Resistance: Employees may resist adopting new processes.

 Training Needs: Training is required for employees to adapt to the new system.

5. Dependency on Technology:

 Technical Issues: Dependency on technology exposes the system to technical glitches.

 Downtime Impact: System downtime can disrupt operations.

6. Overemphasis on Data:

 Data Overload: Too much data can lead to information overload.

 Relevance Issues: Not all data may be relevant to decision-makers.

7. Lack of Customization:

 Generic Solutions: Some MIS solutions may offer generic features, limiting
customization.
 Business Specificity: Tailoring MIS to specific business needs may be challenging.

8. Ethical Concerns:

 Privacy Issues: MIS may raise concerns about employee privacy.

 Ethical Use: Ethical considerations in data collection and utilization.

Management Information System Role in Decision making process

1. Data Collection and Processing:

 Role of MIS:
o Gathers data from various sources, both internal and external.
o Processes raw data into meaningful information through sorting, summarizing,
and analyzing.
 Impact on Decision Making:
o Decision-makers have access to comprehensive and organized data.
o Raw data is transformed into actionable insights for informed decision-making.

2. Information Accessibility:

 Role of MIS:
o Centralizes information, making it easily accessible to authorized users.
o Utilizes user-friendly interfaces for querying and retrieving information.
 Impact on Decision Making:
o Managers can quickly access the information they need.
o Reduces the time and effort required to gather relevant data for decision-making.
3. Decision Support Tools:

 Role of MIS:
o Provides decision support tools such as reports, dashboards, and data
visualization.
o Facilitates ad-hoc querying and analysis for specific decision needs.
 Impact on Decision Making:
o Decision-makers can visually interpret complex data.
o Supports data-driven decision-making through interactive tools.

4. Strategic Planning Support:

 Role of MIS:
o Offers historical data and trend analysis for strategic planning.
o Aligns organizational goals with available resources through data insights.
 Impact on Decision Making:
o Enables strategic decisions based on long-term trends.
o Assists in setting realistic goals and objectives.

5. Monitoring Key Performance Indicators (KPIs):

 Role of MIS:
o Tracks and monitors key performance indicators relevant to organizational
objectives.
o Generates performance reports and alerts.
 Impact on Decision Making:
o Decision-makers can assess the success of current strategies.
o Allows for adjustments based on real-time performance data.

6. Operational Efficiency:

 Role of MIS:
o Identifies operational bottlenecks and inefficiencies.
o Automates routine tasks, reducing manual effort.
 Impact on Decision Making:
o Supports decisions aimed at improving operational processes.
o Enhances overall organizational efficiency.

7. Forecasting and Predictive Analysis:

 Role of MIS:
o Utilizes data trends and patterns for forecasting.
o Integrates predictive analytics to anticipate future outcomes.
 Impact on Decision Making:
o Helps in making proactive decisions based on anticipated trends.
o Reduces reliance on reactive decision-making.
8. Collaboration and Communication:

 Role of MIS:
o Facilitates communication and collaboration among team members.
o Enables sharing of information and reports.
 Impact on Decision Making:
o Improves communication channels for decision-making teams.
o Encourages collaborative decision-making processes.

9. Risk Management:

 Role of MIS:
o Identifies and assesses potential risks through data analysis.
o Offers scenario analysis for risk evaluation.
 Impact on Decision Making:
o Assists in making risk-informed decisions.
o Allows for the formulation of risk mitigation strategies.

10. Feedback Mechanism:

 Role of MIS:
o Establishes a feedback loop for continuous improvement.
o Monitors the implementation of decisions.
 Impact on Decision Making:
o Decision-makers receive feedback on the effectiveness of their decisions.
o Supports a dynamic and adaptive decision-making process.
Decision Support Systems, Attributes,
Characteristics, Classification, Types,
Advantages, Disadvantages:
Decision Support system (DSS) is a computerized program used to support determinations,
judgments, and courses of action in an organization or a business. A DSS sifts through and
analyzes massive amounts of data, compiling comprehensive information that can be used to
solve problems and in decision-making.

Typical information used by a DSS includes target or projected revenue, sales figures or past
ones from different time periods, and other inventory- or operations-related data.

A DSS can be used by operations management and planning levels in an organization to compile
information and data and synthesize it into actionable intelligence. This allows the end user to
make more informed decisions at a quicker pace.

The DSS is an information application that produces comprehensive information. This is

different from an operations application, which would be used to collect the data in the first
place. A DSS is primarily used by mid- to upper-level management, and it is key for
understanding large amounts of data.
For example, a DSS could be used to project a company’s revenue over the upcoming six months
based on new assumptions about product sales. Due to the large amount of variables that
surround the projected revenue figures, this is not a straightforward calculation that can be done
by hand. A DSS can integrate multiple variables and generate an outcome and alternate
outcomes, all based on the company’s past product sales data and current variables.

The primary purpose of using a DSS is to present information to the customer in a way that is
easy to understand. A DSS system is beneficial because it can be programed to generate many
types of reports, all based on user specifications. A DSS can generate information and output it
graphically, such as a bar chart that represents projected revenue, or as a written report.

As technology continues to advance, data analysis is no longer limited to large bulky

mainframes. Since a DSS is essentially an application, it can be loaded on most computer
systems, including laptops. Certain DSS applications are also available through mobile devices.
The flexibility of the DSS is extremely beneficial for customers who travel frequently. This gives
them the opportunity to be well-informed at all times, which in turn provides them with the
ability to make the best decisions for their company and customers at any time.

Process of Decision Support Systems (DSS):

1. Data Input:

Gathering relevant data from various sources, both internal and external.

2. Data Processing:

Analyzing and processing data using models, algorithms, and analytical tools.

3. Knowledge Base:

Utilizing a knowledge base to store relevant information, rules, and decision criteria.

4. User Interface:

Providing a user-friendly interface for querying and interacting with the system.

5. Model Execution:

Executing models and simulations to generate insights and scenarios.

6. Results Presentation:

Presenting results through reports, dashboards, and visualizations.

7. User Feedback:
Gathering feedback from users to improve system performance.

Attributes of a DSS

 Adaptability and flexibility

 High level of Interactivity
 Ease of use
 Efficiency and effectiveness
 Complete control by decision-makers
 Ease of development
 Extendibility
 Support for modeling and analysis
 Support for data access
 Standalone, integrated, and Web-based

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.

Benefits of DSS

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic decision-making of the
organization.
 Facilitates interpersonal communication.
 Encourages learning or training.
 Since it is mostly used in non-programmed decisions, it reveals new approaches and sets up new
evidences for an unusual decision.
 Helps automate managerial processes.

Disadvantages of Decision Support Systems:

 Complex Implementation:

Implementing DSS may require specialized skills and technical expertise.

 High Initial Costs:

The initial investment in DSS development and implementation can be substantial.

  Dependency on Data Quality:

DSS effectiveness heavily relies on the quality and accuracy of input data.

 Resistance to Change:

Users may resist adopting new decision-making processes facilitated by DSS.

 Security Concerns:

DSS may handle sensitive information, raising security and privacy issues.

 Overemphasis on Technology:

Overreliance on technology may overlook the human element in decision-making.

 Limited Flexibility:

Some DSS may lack flexibility to adapt to rapidly changing business environments.

 Integration Challenges:

Integrating DSS with existing systems may pose compatibility and integration challenges.

 Learning Curve:

Users may face a learning curve when adopting new DSS tools and interfaces.

 Maintenance Requirements:

Regular maintenance and updates are necessary to keep DSS effective and up-to-date.

Components of a DSS

(i) Database Management System (DBMS)

To solve a problem the necessary data may come from internal or external database. In an
organization, internal data are generated by a system such as TPS and MIS. External data come
from a variety of sources such as newspapers, online data services, databases (financial,
marketing, human resources).

(ii) Model Management System

It stores and accesses models that managers use to make decisions. Such models are used for
designing manufacturing facility, analyzing the financial health of an organization, forecasting
demand of a product or service, etc.
(iii) Support Tools

Support tools like online help; pulls down menus, user interfaces, graphical analysis, error
correction mechanism, facilitates the user interactions with the system.

Classification of DSS

There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows:

(i) 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.

(ii) Database Oriented DSS

Database plays a major role here; it contains organized and highly structured data.

(iii) 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.

(iv) Solver Oriented DSS

It is based on a solver, which is an algorithm or procedure written for performing certain

calculations and particular program type.

(v) Rules Oriented DSS

It follows certain procedures adopted as rules.

(vi) Rules Oriented DSS

Procedures are adopted in rules oriented DSS. Export system is the example.

(vii) Compound DSS

It is built by using two or more of the five structures explained above.

Types of DSS

(i) 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.

(ii) Data Analysis System

It needs comparative analysis and makes use of formula or an algorithm, for example cash flow
analysis, inventory analysis etc.

(iii) 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.

(iv) 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.

(v) Model Based System

Simulation models or optimization models used for decision-making are used infrequently and
creates general guidelines for operation or management.

Decision Support Systems Role in Decision making process

1. Data Aggregation and Analysis:

o Role of DSS:
 Gathers and aggregates relevant data from various sources.
 Analyzes data using advanced modeling and analytical techniques.
o Impact on Decision Making:
 Provides decision-makers with a comprehensive view of relevant information.
 Enables in-depth analysis for better-informed decisions.

2. Scenario Simulation:
o Role of DSS:
 Allows for the creation and simulation of different decision scenarios.
 Models the potential outcomes of various decision options.
o Impact on Decision Making:
 Assists decision-makers in understanding the consequences of different choices.
 Supports proactive decision-making by exploring potential scenarios.

3. Decision Modeling and Optimization:

o Role of DSS:
 Utilizes mathematical models to represent decision problems.
 Optimizes decision variables to achieve the best outcomes.
o Impact on Decision Making:
 Provides decision-makers with quantifiable and objective insights.
  Optimizes resource allocation and decision parameters.

4. Access to Real-Time Information:

o Role of DSS:
 Integrates with systems to provide real-time data updates.
 Ensures decision-makers have access to the latest information.
o Impact on Decision Making:
 Enables timely decision-making based on current and relevant data.
 Supports agility and responsiveness in dynamic business environments.

5. User-Friendly Interfaces:
o Role of DSS:
 Provides intuitive and user-friendly interfaces for interaction.
 Allows users to easily input queries and interact with the system.
o Impact on Decision Making:
 Reduces the learning curve for users, fostering widespread adoption.
 Enhances accessibility for decision-makers across different levels.

6. Collaboration Support:
o Role of DSS:
 Facilitates collaboration by allowing multiple users to interact with the system.
 Supports shared decision-making processes.
o Impact on Decision Making:
 Encourages teamwork and collective decision-making.
 Improves communication and coordination among decision-makers.

7. Information Presentation:
o Role of DSS:
 Presents insights through visualizations, reports, and dashboards.
 Transforms complex data into easily understandable formats.
o Impact on Decision Making:
 Enhances comprehension by presenting information in a digestible manner.
 Supports quick and effective decision-making.

8. Risk Assessment and Mitigation:

o Role of DSS:
 Assesses potential risks associated with decision options.
 Recommends strategies to mitigate identified risks.
o Impact on Decision Making:
 Helps decision-makers make informed choices while considering potential risks.
 Supports the development of risk-conscious decision-making strategies.

9. Feedback Mechanism:
o Role of DSS:
 Establishes a feedback loop for continuous improvement.
 Collects feedback from users to enhance system performance.
o Impact on Decision Making:
  Enables continuous learning and improvement in decision-making processes.
 Incorporates user insights for refining decision support functionalities.

Applications of Decision Support System

DSS can theoretically be built in any knowledge domain.

One example is the clinical decision support system for medical diagnosis. There are four stages
in the evolution of clinical decision support system (CDSS): the primitive version is standalone
and does not support integration; the second generation supports integration with other medical
systems; the third is standard-based, and the fourth is service model-based.

DSS is extensively used in business and management. Executive dashboard and other business
performance software allow faster decision making, identification of negative trends, and better
allocation of business resources. Due to DSS all the information from any organization is
represented in the form of charts, graphs i.e. in a summarized way, which helps the management
to take strategic decision. For example, one of the DSS applications is the management and
development of complex anti-terrorism systems. Other examples include a bank loan officer
verifying the credit of a loan applicant or an engineering firm that has bids on several projects
and wants to know if they can be competitive with their costs.

A growing area of DSS application, concepts, principles, and techniques is in agricultural

production, marketing for sustainable development. For example, the DSSAT4 package,
developed through financial support of USAID during the 80s and 90s, has allowed rapid
assessment of several agricultural production systems around the world to facilitate decision-
making at the farm and policy levels. Precision agriculture seeks to tailor decisions to particular
portions of farm fields. There are, however, many constraints to the successful adoption on DSS
in agriculture.

DSS are also prevalent in forest management where the long planning horizon and the spatial
dimension of planning problems demands specific requirements. All aspects of Forest
management, from log transportation, harvest scheduling to sustainability and ecosystem
protection have been addressed by modern DSSs. In this context the consideration of single or
multiple management objectives related to the provision of goods and services that traded or
non-traded and often subject to resource constraints and decision problems. The Community of
Practice of Forest Management Decision Support Systems provides a large repository on
knowledge about the construction and use of forest Decision Support Systems.

A specific example concerns the Canadian National Railway system, which tests its equipment
on a regular basis using a decision support system. A problem faced by any railroad is worn-out
or defective rails, which can result in hundreds of derailments per year. Under a DSS, the
Canadian National Railway system managed to decrease the incidence of derailments at the same
time other companies were experiencing an increase.
DSS have been used for risk assessment to interpret monitoring data from large engineering
structures such as dams, towers, cathedrals, or masonry buildings. For instance, Mistral is an
expert system to monitor dam safety, developed in the 1990s by Ismes (Italy). It gets data from
an automatic monitoring system and performs a diagnosis of the state of the dam. Its first copy,
installed in 1992 on the Ridracoli Dam (Italy), is still operational 24/7/365. It has been installed
on several dams in Italy and abroad (e.g., Itaipu Dam in Brazil), and on monuments under the
name of Kaleidos. Mistral is a registered trade mark of CESI. GIS have been successfully used
since the ‘90s in conjunction to DSS, to show on a map real-time risk evaluation based on
monitoring data gathered in the area of the Val Pola disaster (Italy).

 DSS tends to be aimed at the less well structured, underspecified problem that upper level
managers typically face;
 DSS attempts to combine the use of models or analytic techniques with traditional data access
and retrieval functions;
 DSS specifically focuses on features which make them easy to use by non-computer-proficient
people in an interactive mode; and
 DSS emphasizes flexibility and adaptability to accommodate changes in the environment and the
decision-making approach of the user.

Typically, business planners will build a DSS system according to their needs and use it to
evaluate specific operations, including

 A large stock of inventory, where DSS applications can provide guidance on establishing supply
chain movement that works for a business.
 A sales process, where DSS software is a “crystal ball” that helps managers theorize how
changes will affect results.
 Other specialized processes related to a field or industry.

DSS can help manage inventory

DSS can come in handy by evaluating stock held in a facility, or any other type of business asset
that can be moved around or otherwise optimized. This is often one way a business can profit
from “itemizing” its assets with DSS.

DSS can aid sales optimization and sales projections

Decision support technology can also be a tool that analyzes sales data and makes predictions, or
monitors existing patterns. Whether it’s big picture decision support tools, active or passive
solutions, or any other kind of DSS tool, planners often tackle sales numbers using a variety of
decision support resources.

Utilize DSS to optimize industry-specific systems

There are other uses for this powerful software option, to make good projections on the future for
a business or to get an overall bird’s-eye view of events that determine a company’s progress.
This can come in handy in difficult situations where a lot of financial projection may be
necessary when determining expenditures and revenues.
Executive Information Systems, Process,
Disadvantages, Role in Decision making
process
An Executive Information System can be defined as a specialized Decision Support System.
This type of the system generally includes the various hardware, software, data, procedures and
the people. With the help of all this, the top level executives get a great support in taking and
performing the various types of the decisions. The executive information system plays a very
important role in obtaining the data from the different sources, then help in the integration and
the aggregation of this data. After performing these steps the resulting information is displayed
in such a pattern that is very easy to understand.

Executive information system is ‘a computer based system that serves the information that is
needed by the various top executives. It provides very rapid access to the timely information and
also offers the direct access to the different management reports.’

Executive Information System is very user friendly in the nature. It is supported at a large extent
by the graphics.

Executive support system can be defined as the comprehensive executive support system that
goes beyond the Executive Information System and also includes communications, office
automation, analysis support etc.
According to Watson, Executive Information System / executive support system depends on
some of the factors that can be summarized as the follows

1. Internal factors

 Need for the timely information.

 Need for the improved communications.
 Need for the access to the operational data.
 Need for the rapid status updates on the various business activities.
 Need for the access to the corporate database.
 Need for very accurate information.
 Need for the ability to identify the various historical trends.

2. External Factors

 Increasing and intensifying the global competition.

 Rapidly changing the business environment.
 Need to be more proactive.
 Need to access the external database.
  Increasing the various government regulations.

Characteristics of the Executive Information System

1. Informational characteristics

 Flexibility and ease of use

 Provides the timely information with the short response time and also with the quick retrieval
 Produces the correct information
 Produces the relevant information
 Produces the validated information

2. User interface/orientation characteristics

 Consists of the sophisticated self help

 Contains the user friendly interfaces consisting of the graphic user
 Can be used from many places
 Offers secure reliable, confidential access along with the access procedure
 Is very much customized
 Suites the management style of the individual executives

3. Managerial / executive characteristics

 Supports the over all vision, mission and the strategy

 Provides the support for the strategic management
 Sometimes helps to deal with the situations that have a high degree of risk
 Is linked to the value added business processes
 Supports the need/ access for/ to the external data/ databases
 Is very much result oriented in the nature

Capabilities of Executive Information System

(i) Helps in accessing the aggregated or macro or global information.

(ii) Provides the user with an option to use the external data extensively.

(iii) Enables analysis of the address and the hoc queries.

(iv) Shows the trends, the ratios and the various deviations.

(v) Helps in incorporating the graphic and the text in the same display, which helps to have a
better view.

(vi) It helps in the assessment of the historical as also the latest data.

(vii) Problem indicators can be highlighted with the help of the Executive Information System /
executive support system.
(viii) Open ended problem explanation with the written interpretations can be done with the help
of the Executive Information System / executive support system.

(ix) Offers management by the exception reports.

(x) Utilizes the hyper text and the hyper media.

(xi) Offers generalized computing.

(xii) Offers telecommunications capacity.

Executive Information System Process

 Data Collection:

EIS gathers data from various internal and external sources, including databases, reports, and
external data feeds.

 Data Processing:

The collected data undergoes processing, including validation, aggregation, and transformation
to ensure accuracy and relevance.

 Data Storage:

Processed data is stored in a centralized repository, often a data warehouse, for easy retrieval and
analysis.

 Information Retrieval:

Executives can query the EIS to retrieve specific information based on their needs. The system
uses user-friendly interfaces for ease of interaction.

 Data Analysis and Reporting:

EIS provides tools for data analysis, generating reports, summaries, and visualizations that offer
insights into key performance indicators (KPIs) and relevant metrics.

 Trend Identification:

The system identifies trends and patterns within the data, allowing executives to understand
historical performance and anticipate future developments.

 Decision Support:
EIS assists executives in decision-making by providing relevant and timely information. It may
include decision support tools and models for scenario analysis.

 Alerts and Notifications:

EIS monitors predefined thresholds and conditions, triggering alerts or notifications to executives
when significant events or deviations occur.

 Strategic Planning Support:

EIS contributes to strategic planning by offering insights into market trends, competitive
intelligence, and the organization’s overall performance.

 Integration with External Data:

EIS often integrates with external data sources, such as industry reports, economic indicators,
and market research, to provide a comprehensive view.

 Customization for Executives:

EIS is customizable to meet the specific needs and preferences of individual executives, allowing
them to focus on the information most relevant to their roles.

 User Interface and Accessibility:

EIS features user-friendly interfaces that provide easy access to information, ensuring that
executives can quickly navigate and retrieve the data they require.

 Feedback Mechanism:

Executives can provide feedback on the usefulness and relevance of the information provided,
contributing to system refinement and improvement.

 Security Measures:

EIS incorporates robust security measures to safeguard sensitive executive-level information and
ensure data confidentiality.

Benefits of Executive Information System

(i) Achievement of the various organizational objectives.

(ii) Facilitates access to the information by integrating many sources of the data.

(iii) Facilitates broad, aggregated perspective and the context.

(iv) Offers broad highly aggregated information.

(v) User’s productivity is also improved to a large extent.

(vi) Communication capability and the quality are increased.

(vii) Provides with the better strategic planning and the control.

(viii) Facilitates pro-active rather than a reactive response.

(ix) Provides the competitive advantage.

(x) Encourages the development of a more open and active information culture.

(xi) The cause of a particular problem can be founded.

Executive Information System Disadvantages

 Costly Implementation:

The initial investment in designing, implementing, and maintaining an EIS can be substantial,
including costs for hardware, software, training, and ongoing support.

 Complexity and Customization:

EIS can be complex to implement, and customization to fit specific executive needs may require
a high level of expertise and effort.

 Dependency on Data Quality:

The effectiveness of EIS is highly dependent on the quality of the underlying data. Inaccurate or
incomplete data can lead to flawed insights and decisions.

 Integration Challenges:

Integrating EIS with existing information systems within the organization can be challenging,
especially in environments with diverse data sources and formats.

 Resistance to Change:

Executives and organizational members may resist adapting to new technologies and processes,
potentially hindering the successful adoption of EIS.

 Security Concerns:
EIS often deals with sensitive and confidential information. Ensuring robust security measures is
crucial to prevent unauthorized access and protect against data breaches.

 Learning Curve:

Executives and users may face a learning curve when using new EIS tools and interfaces, which
can temporarily impact productivity.

 Overemphasis on Technology:

Overreliance on EIS may lead to a reduction in the importance of human intuition and
experience in decision-making, potentially overlooking nuanced aspects.

 Limited Flexibility:

Some EIS solutions may lack flexibility to adapt quickly to changes in business environments or
evolving executive information needs.

 Maintenance Requirements:

Ongoing maintenance is essential for EIS to remain effective. This includes updates,
troubleshooting, and ensuring compatibility with evolving technologies.

 Data Overload:

EIS, when presenting a large volume of information, may lead to information overload for
executives, making it challenging to focus on critical data points.

 Potential for Misinterpretation:

Executives may misinterpret presented information, especially if they lack a comprehensive

understanding of the data sources, models, or assumptions used.

 Dependency on IT Support:

Executives may become overly dependent on IT support for system-related issues, potentially
slowing down decision-making in case of technical problems.

 Ethical Considerations:

The use of EIS raises ethical concerns related to the privacy and responsible use of sensitive
information, requiring organizations to establish clear guidelines and policies.

Executive Information System Role in Decision making process

 Access to Critical Information:

EIS provides top executives with quick and easy access to critical information relevant to their
roles. This information includes key performance indicators (KPIs), financial metrics, market
trends, and strategic data.

 Real-Time Data Monitoring:

Executives can monitor real-time data through EIS, allowing them to stay informed about the
current state of the organization and external factors that may impact decision-making.

 Strategic Planning Support:

EIS assists in strategic planning by offering insights into long-term trends, market dynamics, and
competitive intelligence. Executives can align organizational goals with available resources and
external opportunities.

 Decision Support Tools:

EIS incorporates decision support tools such as data analytics, modeling, and scenario analysis.
These tools help executives evaluate various decision options and their potential outcomes.

 Performance Measurement:

Executives can use EIS to measure the performance of different departments, business units, or
projects, enabling data-driven assessments and informed decision-making.

 Risk Management:

EIS supports risk management by identifying potential risks and uncertainties. Executives can
use this information to develop strategies for mitigating risks and making more informed
decisions.

 Facilitation of Communication:

EIS facilitates communication among top executives by providing a centralized platform for
sharing information, insights, and collaborative decision-making.

 Aggregation of Information:

EIS aggregates information from diverse sources, including internal databases, external market
reports, and operational systems. This aggregation provides a comprehensive view for decision-
makers.

 Customization for Executives:

EIS allows executives to customize dashboards and reports based on their specific information
needs. This ensures that executives focus on the most relevant data for their decision-making
processes.

 Performance Evaluation:

Executives can use EIS to evaluate the performance of strategic initiatives, allowing for
adjustments and refinements in alignment with organizational goals.

 Alerts and Notifications:

EIS includes alert mechanisms that notify executives of critical events or deviations from
established benchmarks, enabling proactive decision-making.

 Benchmarking:

Executives can compare the organization’s performance against industry benchmarks and
competitors, aiding in strategic positioning and goal setting.

 Data Visualization:

EIS employs data visualization techniques such as charts and graphs to present complex
information in a visually comprehensible format, aiding executives in understanding trends and
patterns.

 Feedback Loop:

EIS establishes a feedback loop where executives can provide feedback on the effectiveness of
decisions made and the relevance of information presented, contributing to continuous
improvement.
Organising the Information Systems function
in Business
Organizing the Information Systems (IS) function within a business is essential for ensuring that
the organization’s technology systems are effective, efficient, and aligned with the company’s
overall objectives. Below are some general steps that can be taken to organize the IS function in
a business:

IS function’s purpose:

The first step is to define the role and objectives of the IS function within the organization. This
should include identifying the key responsibilities and priorities of the IS function, as well as the
expected outcomes and benefits.

Identify the structure:

Determine the most appropriate organizational structure for the IS function. Depending on the
size and complexity of the organization, the IS function may be centralized or decentralized. In a
centralized structure, the IS function is a separate department reporting to senior management,
while in a decentralized structure, the IS function may be integrated within different business
units.

Establish reporting lines:

Determine reporting lines for the IS function. This may include reporting directly to the Chief
Information Officer (CIO) or other senior executives.

Define roles and responsibilities:

Clearly define the roles and responsibilities of each team member within the IS function,
including areas such as technology infrastructure, application development, and user support.

Develop policies and procedures:

Establish policies and procedures for managing the IS function, including areas such as security,
data management, and software development.

Build the team:

Hire qualified and experienced individuals to fill the various roles within the IS function. Ensure
that team members have the necessary skills and expertise to perform their duties effectively.

Provide training and development:

Provide ongoing training and development opportunities to the IS function team members to
ensure that they stay up-to-date with the latest technologies and best practices.

Establish metrics:

Define metrics for measuring the performance of the IS function. This may include measures
such as system uptime, user satisfaction, and return on investment.

Align with the business strategy:

Ensure that the IS function is aligned with the overall business strategy. This involves
understanding the needs of the business and ensuring that the IS function supports these needs.

Continuously evaluate and improve:

Continuously evaluate the effectiveness of the IS function and identify areas for improvement.
This may involve conducting regular audits, gathering feedback from users, and implementing
process improvements.

There are various theories and approaches to organizing the Information Systems (IS) function
within a business. Below are some of the most common ones:

Centralization vs. Decentralization:

The centralization vs. decentralization approach focuses on the degree to which the IS function is
centralized or decentralized within an organization. In a centralized structure, the IS function is a
separate department reporting to senior management, while in a decentralized structure, the IS
function may be integrated within different business units.

Business-IT Alignment:

The Business-IT Alignment approach emphasizes the importance of aligning the IS function with
the overall business objectives. This involves understanding the needs of the business and
ensuring that the IS function supports these needs. This approach requires strong collaboration
between the business and IT departments.

IT Governance:

The IT Governance approach focuses on the governance structure of the IS function. This
involves defining the decision-making processes and procedures for managing the IS function.
The IT Governance framework provides a set of policies, procedures, and controls for managing
the IS function.

IT Service Management:
The IT Service Management approach focuses on managing the delivery of IT services to the
organization. This approach emphasizes the importance of delivering high-quality services that
meet the needs of the business. IT Service Management is based on the ITIL (Information
Technology Infrastructure Library) framework.

Agile:

The Agile approach emphasizes the importance of flexibility and adaptability in managing the IS
function. This approach focuses on delivering value to the business through rapid development
and continuous improvement. Agile methodology is based on the principles of the Agile
Manifesto.

DevOps:

The DevOps approach emphasizes the collaboration between the development and operations
teams. This approach aims to improve the efficiency and quality of software development and
deployment. DevOps methodology emphasizes the use of automation and continuous delivery.
Ethical and Social issues of Information
Systems
Information systems (IS) play a vital role in modern society, but they also raise a range of ethical
and social issues. These issues arise due to the collection, storage, processing, and dissemination
of information.

Information systems have significant ethical and social implications. It is essential for
businesses, governments, and individuals to be aware of these issues and take steps to address
them. This includes implementing appropriate security measures, protecting privacy, promoting
digital citizenship, and ensuring that new technologies do not exacerbate social inequalities.

Important ethical and social issues of information systems:

Privacy:

The issue of privacy arises due to the collection and storage of personal information by
information systems. Businesses and governments collect and store large amounts of personal
data, which can be misused if it falls into the wrong hands. Privacy concerns also arise from the
use of surveillance technologies.

Security:

Security is another critical issue for information systems. The use of information systems creates
new risks of unauthorized access, theft, and hacking. Cybersecurity breaches can lead to loss of
sensitive data, financial loss, and reputational damage.

Intellectual property:

Information systems make it easy to copy and distribute digital content, which raises issues of
intellectual property rights. Piracy of copyrighted material is a significant concern for the
entertainment and publishing industries.

Accuracy and Reliability:

Information systems are expected to provide accurate and reliable information. However, errors
in data entry, processing, and storage can lead to incorrect information being disseminated. This
can have severe consequences in fields such as healthcare, where incorrect data can lead to
misdiagnosis and incorrect treatment.

Social Inequality:
Information systems can create new forms of social inequality by creating a digital divide
between those who have access to technology and those who do not. This can create disparities
in access to education, job opportunities, and healthcare.

Employment:

Information systems can also have significant impacts on employment. Automation and artificial
intelligence can lead to job displacement, while new technologies require new skills and training.

Digital Citizenship:

The rise of social media and digital communication has created new challenges for digital
citizenship. Issues such as cyberbullying, online harassment, and fake news can have severe
social and psychological impacts.

Environmental Impact:

Information systems also have an environmental impact. The production and disposal of
electronic devices, as well as the energy consumption of data centers, contribute to carbon
emissions and environmental degradation.

How to tackle Ethical and Social issues of Information Systems?

Tackling ethical and social issues of information systems requires a multi-faceted approach that
involves several steps, including:

Identify the ethical and social issues:

Start by identifying the ethical and social issues that arise from the use of information systems in
your organization. These may include issues related to privacy, security, intellectual property,
access, accuracy, reliability, and accountability.

Assess the impact:

Evaluate the impact of these ethical and social issues on your organization and its stakeholders,
including employees, customers, suppliers, and the broader community.

Develop policies and procedures:

Develop policies and procedures that address the ethical and social issues identified in step 1.
These policies and procedures should be clear, concise, and easy to understand.

Communicate policies and procedures:

Communicate the policies and procedures to all stakeholders, including employees, customers,
and suppliers. Make sure that everyone understands their responsibilities and the consequences
of not complying with the policies and procedures.

Monitor compliance:

Monitor compliance with the policies and procedures and take corrective action if necessary.
This may involve training employees, implementing new technologies, or revising policies and
procedures.

Regularly review and update policies and procedures:

Regularly review and update the policies and procedures to ensure they remain effective and
relevant in light of changing ethical and social issues and the evolving use of information
systems.

Seek expert advice:

Seek expert advice from legal, ethical, and social professionals to ensure that your policies and
procedures are legally and ethically sound and reflect best practices.