Management Information System. ERP

1. Superior University, Lahore.
Assignment
on
MANAGEMENT INFORMATION SYSTEM
Presented to: MISS.RAFIA BHOKHARI
Presented by: Group “Supereye”
MUBEEN ABDUR REHMAN MCE 12151
SALMAN ANJUM MCE 12157
HAFIZ ASHFAQ SALAMAT MCE 12155
ZOHAIB AHMAD MCE 12152
SHABAN CHEEMA MCE 12169
MUTAHIR BILAL MCE 12147
MEMONA JAVED MCE 12104
NADIA IZHAR MCE 12170
Class M.Com
Semester 1st Evening
Superior University
Kalma Chowk Campus,
Lahore.
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2. Superior University, Lahore.
Table of contents
Information System …………………………………………… 03
Types of I.S ….……………………………………. 04
Strategic Information System …………………………………… 06
Key features of SIS ……………………………………… 07
Need Of SIS …………………………………… 08
Top manager’s point of view ……………………………… 09
Benefits of SIS to organization ………………………………….. 11
(Real Time Example UPS) ……………………………………… 15
Real Time Example (KIA) ……………………………………….. 16
Summary ……………………………………….. 17
Referencing ……………………………………….. 18
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INFORMATION SYSTEM
Information System gives us combination of
all data and processes of an organization. And
join different department and provides
activities. These activities can include,
maintaining business accounting records,
defining & monitoring budgets, managing
business assets, production planning,
purchasing schedules, maintaining
inventories, interacting with suppliers &
Customers, providing customer services,
managing orders and meeting legal and
statutory requirements of the business.
A combination of
hardware, software, infrastructure and trained
personnel organized to facilitate planning, control,
coordination, and decision making in organization.
People, hardware, network, software
and data area five basic resources of information system.
When talking about information systems, first of all, their is need to be defined
what is information and what is to the difference between data and information. So,
information can be defined as data converted into something valuable and usable for
certain users. Out of this definition the following can be concluded: Information is data
sets that together offer new knowledge to data owners. For example, the currency
exchange rate is, for the ordinary person, just data, but for financial analysts it is
information because together with other historical currency exchange rates, he/she give
new information, about short-term currency trends.
From this example, financial experts can analyze gathered data; compare it with
other data like funds and cash flow and to conclude level of profit or losses from effects
of currency exchange rates. Such sets of analyzed data that, of course, need to be
relevant to end users for acceptance of certain knowledge, is information.
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Six Major Types of Information System
1) Executive support systems
2) Decision Support Systems
3) Management Information
Systems
4) Knowledge Work Systems
5) Office Automation
Systems
6) Transaction Processing
Systems
Strategic-Level Systems
Executive Support Systems:
An Executive Information System (EIS) is a type of management
information system intended to facilitate and support the information and
decision-making needs of senior executives by providing easy access to both
internal and external information relevant to meeting the strategic goals of the
organization.
 5-year sales trend forecasting
 5-year operating plan 5-year budget forecasting
Management-Level Systems
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Decision Support Systems:
Decision Support Systems (DSS) are a specific class of computerized
information systems that supports business and organizational decision-making
activities. A properly-designed DSS is an interactive software-based system
intended to help decision makers compile useful information from raw data,
documents, personal knowledge, and/or business models to identify and solve
problems and make decisions.
Sale region analysis.
 Production scheduling
 Cost analysis
 Pricing/profitability analysis
Management Information Systems:
Management Reporting Systems are intended to provide aggregated data
about the performance of the organization. Usually these are created from data
generated by the knowledge or operational layers of information systems.
 Sales management, Inventory control, Annual budgeting, Capital investment
Analysis.
Knowledge-Level Systems
Knowledge base Work Systems:
Knowledge Management Systems are to facilitate knowledge
management in an organization. As described in our approach and in the
knowledge creation cycle they are only part (although very important) of a
knowledge management strategy. It is not an Office Information System as is
often thought and should be smaller in size than Office Information System. If
implemented and used properly they can be considered as force multipliers for
an organization.
 Engineering workstations
 Graphics workstations Managerial workstation
Office Automation Systems:
Office Information Systems provide information to the organization that is
not directly available from operational support systems. Often this is textual data
(e.g. Office-documents or E-mail), but it can also be a CRM (Customer
Relationship Management) system. Intranet and wiki's are very popular
applications of these.
 Work processing systems
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 mage storage Electronic calendars
Operational Level Systems
Transaction Processing Systems:
A Transaction Processing System is a set of information which process
the data transaction in database system that monitors transaction programs (a
special kind of program). The essence of a transaction program is that it
manages data that must be left in a consistent state. These are usually
databases.
 Order processing, Plant scheduling, Payroll Employee record keeping.
 Sales and Marketing Manufacturing Finance Accounting Human.
Strategic Information System
o A Strategic Information System can be any IS at any level of
an organization that change the goals, business processes,
products, services, or environmental relationships to help the
organization in
order to gain a
competitive
advantage”
o Information
system that
provide a firm
with competitive
products and
services which
give it strategic
advantages over
its competitive in
the market
place.
o Systems that help company’s change or otherwise modify their business
strategy and structure.
These systems usually increase the customer value by customizing products,
increase products thorough information and services, eliminate delays, improve
reliability, make products easier to use, or reducing transaction times.
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Key features of strategic information system
Key features of the Strategic Information Systems are the following:
“Operational Effectiveness” means performing similar activities better than
competitors do “Strategic Positioning” means performing different activities from
competitors or performing similar activities in different ways.
“Organizations have competitive advantage when they provide more value to
their customers or when they provide the same value to customers at a lower
price”
Decision support systems that allow developing a strategic approach to arrange
Information Systems (IS) or Information Technologies (IT) with an organization
business strategies.
Mainly Enterprise resource planning (ERP)
solutions that integrate the business
processes to meet the enterprise
objectives for the optimization of the
enterprise resources.
Database systems with the
capabilities to make the best
use of available corporate
information for marketing,
production, promotion and
innovation. The SIS
systems also facilitate identification of the data collection strategies to help
optimize database marketing opportunities.
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Why organizations need information system?
Information system is the lifeblood of any organization. If we cannot used
information system then we damaged or lost data can cause disruptions in normal
business activities leading to financial losses etc. Information systems, which comprise
hardware, software, data, applications, communication and people, help an organization
to better manage and secure its critical corporate, customer and employee data.
Information systems also improve growth and work process.
Business efficiency:
Businesses improve the efficiency with
the used of information system and also to
achieve higher profitability. Information
systems are provided important tools
(communication, reports garnets, decision
making) available to top management for
achieving higher levels of efficiency.
Business effectively:
Management with the used of information system doing his work effectively. With
the helped of information system properly measurement the work effectiveness and
solve the problem.
New products, services, and business models:
Information system is a major tool for firms to create new products and services,
and also an entirely new business models. A business model describes how a company
produces, delivers, and sells a product or service to create wealth.
Example: Apple Inc. transformed an old business model based on its iPod technology
platform that included iPod, the iTunes music service, and the iPhone.
Decision making:
Many management never having the
right information at the right time to making
decision because lack of information system.
These poor decision making raise costs and
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lose customers. Information system made it possible for the management to use real
time data of origination in any the marketplace when making decision needs.
Competitive advantage:
Management with the used of the information system gets or achieves
competitive advantage with the innovation of new things. If we not used the information
system so others competitive organization get advantage with the used of information
system.
Support business process:
Information system help to business processes (store, recoding, communication).
Example retailer store used the information system used for helps to recoding
information of customer or recorded of sales and communication with customer or
suppler.
Decrease cost:
Information system also helps to decrease cost. For making information system
structure only one time cost required or one time problem face for making or introduced
information system.
Top manager’s point of view
Expensive:
Installing a Strategic information system can be expensive for a company. it
present a significant expense specially for large scale organizations due to their vast
connection. Companies must create a budget to pay for these items otherwise a
company cannot earn profit in competitive environment. These systems require
ongoing support upgrade fee which can represent future fixed outflows.
Maintenance:
Company need to hire maintaining
individuals help and keep an electronic
strategic information system running
smoothly. These individuals need a wide
information or specific knowledge of
computer science functions which increases
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organizations expenses. Business technology change frequently creating an
environment where the companies have trained staff, individuals or operators who can
properly maintain computers web sites servers and other equipments in the use by
strategic information systems.
Hiring qualified persons:
Strategic information system is the most unique system used by the
organizations in the world for the proper working of information system organization
need to hire qualified persons. For the new comers or operators in this field there
must be additional training to have some experience to run system smoothly or
correctly. It increase the labor cost of an organization.
Complex task:
Gathering unimportant or nonessential information can delay business decisions
because manager must request for additional inputs. Spending to mutch time on
reprogramming or correcting issue can also increase the time spends in decision
making process. Extensive training on new systems involves which shows that to
operate a strategic information
system is a complex task.
Employees
dissatisfaction:
Due to improved technology
day by day employees of an
organization take low interest in
complex technology of
organization. These technologies
do not give then chance to show
their own creation or abilities in
complex organization ups and
down situations. They also relay with orders training, maintaining, working, reporting or
other complex situations and feel dissatisfaction in organizations task.
Untrained staff:
In Pakistan illiteracy rate is 1.7 %. No chance of proper education or training is given
to our youth. So our youth remain illiterate. For their meal they have to work in
organization at any cost so organization hire untrained staff which is not able to work
with strategic information system.
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Health issue:
Health issue employees or operators are
also a big problem due to long hours of work
on complex information system. Employees
do not given time to take rest which result in
different health or physical diseases. For
employee’s medical treatment or other
health Issues Company expenses increases.
Benefits of SIS to organizations
Competitive Advantage:
The alignment increases the capability to respond faster to environmental
changes and thus creates a competitive advantage. An early example was the
favorable position afforded American and United Airlines by their reservation systems,
Sabre & Apollo American Airlines worked with IBM to develop an improved
booking/reservation system, and the Airline Reservation Systems (ARS). And the
Semi-Automatic Business Research System (SABRE) launched thereafter in 1960. The
network completed set-up in 1964, and it was recognized as the largest data processing
system in existence. United Airlines developed the Apollo Reservation System, and
shortly after allowed travel agents access. For many years these two systems ensured
that the two carriers’ flights appeared on the first screens observed by travel agents,
thus increasing their bookings relative to competitors.
Efficiency & Effectiveness:
Due to the alignment of business strategies with IS the business processes
become more efficient & effective. When the united airlines develop the Apollo
reservation system it increased their bookings & made their reservation system more
effective because of travel agents.
Product Differentiation:
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A strategic information system in an organization assures the uniqueness of their
products & services as it differentiate the way of their business. The above example
clear it when Apollo reservation system developed it makes their ARS different from
other competitors.
Strong linkage among departments:
Core business processes are
accomplished through digital networks .ERP
system in organization link different
departments and make the information flows
from one department to another smoothly.
Customers & suppliers satisfaction:
Serving customers well make the
customers loyal.by adapting the CRM
strategic information system an organization
can satisfy their customer for long time.
Similarly significant business relationship with
suppliers is also maintained by SCM. The goal
of SCM is to create fast efficient & low cost
network of business relationship.
Cost leadership:
IS has provided an opportunity of doing
job though networking called “telecommuting”.
It is a job that the workers do not have to work
in the office. They can work anywhere and
anytime through digital systems. There is no space and time limitation. The business
model of digital firm is proved that it could reduce the cost for doing business because
the firms do not have to invest in the office and the workers do not have to spend their
times in the traffic. Moreover, telecommuting job does not create any pollution to the
society and these are the main advantages of this kind of job. Organizations which align
their strategies with this IS become low cost producer & have cost leadership against
their competitors.
Growth & promotion:
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Web based marketing like e-
commerce; e-business provides an
organization way of growth &
promotion. Which is the one of the
most important objective of an
organization these strategic information
systems in return gives maximum profit
through efficient, effective and low cost
business comparatively to other
competitors.
Synergies or Alignment:
IS provide synergy strategy that tie together the operations of disparate
businesses units so that they work together to get competitive advantage. In this way it
encourage sharing of knowledge across business units.
Innovation:
One of the important things to
compete with other competitors and to
stay in market competition is to be
innovative. Information systems
provide opportunities to the managers
to produce unique products and make
radical change in business processes
for producing and distributing products
and services that are so different from
the way a business has been
conducted. Similarly adopting new
technologies is directly related to the adoption of innovation. Information systems also
alter the fundamental structure of an industry.
Good decision making:
Different information systems (MIS, TPS, DSS, & ESS) enable managers to
make better decisions related to business activities. Making effective and profit
maximizing decision by focusing different aspects like involved risk, competitor’s
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position in market, forecasting is a complex task to be done by managers. Information
systems support managers in making good decision making.
Better communication system:
Information system through networking has
provided better ways of communication among
different business processes
departments. Intranet develops strong
communication & collaboration within
organization. Similarly extranet provides
strong linkage among all business partners.
These systems provide better opportunity of sharing the necessary information
related to business among all business partners which consequently make the
business more effective & efficient.
Maximum return on investments:
Strategic information system is the only
opportunity that can give an organization
maximum return on its investments by adopting
different information systems. Enterprise
resources planning system improves the
processing comparatively at low cost. CRM
allow a business to identify its best customers
who are the most profitable to the business so
they can be retained for a long time for greater
& more profit. These systems provide strategic
value to the business and hence give maximum
return on investments to organizations.
Example:
1) United parcel serves (UPS)
Jim Casey and Claude Rayan 1907 with 2 bicycle and1 phone
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Problems
Decentralized information
Poor work
Time-consuming
Late order deliver
Less satisfaction of customers
Details
 DIAD automatically capture customer signature vehicle adapter
 Main computers in countries Georgia Mahwah etc
 Cisco system for tracking and cost calculation without vesting the UPS
 14.1 millions parcels delivered in per day
 Centralized information easily tradable
 Anyone with a package to ship can access UPS website to track packages check
delivery routes calculate ship ingrates and schedule pickup
 Custom built software that uses operations research and mapping technology to
optimize the way packages or loaded and delivered
 Adidas and Oregon is one of the biggest costumer of UPS
 Every three months the company introduced as many as 10000 new apparel
items and 4000 new footwear items it must handle orders for many thousands of
retailers for this order and many of these orders are priority request that must be
fulfilled within one or two days
2) KIA Motors
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Korean company 1994 in united state
Average defect ratio is 1.33 and Kia defected ratio is 2.12
10 years warranty and 100000 mile warranty
Kia had to create software first December 2003 to capture defect accident or
injuries included his vehicles. Information stored in 7 different parts.
Brake pads problems it’s made for four wheels derive that’s y there is a vibration
in car
Stopgap software for centralized information. Time-consuming, not provide
benefit to company
Engine software
1. Warranty claims
2. Parts sales
3. Vehicles inventories
4. Store essential information in a single common data repository vehicle
identification number master storage files.
Crystal analysis
That’s software highlights problems defeats an managers can resolve all this
problems by the time now the 2005 the defect ratio of Kia motors is only 1.40 and
also improved productivity.
Summary:
IS provides combination of all data and processes of an organization. It has six
types Executive support systems, Decision Support Systems, Management Information
Systems, Knowledge Work Systems, Office Automation Systems and Transaction
Processing Systems. Information system that provide a firm with competitive product
and services which give it strategic advantage over its competitor in the marketplace is
called the strategic information system.
The organization needs the S.I.S. operational excellence, manage the labor
force; support the business aim, improved decision making. The manager’s point of
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view is that it is expensive, difficult to maintenance; need to hire qualified persons,
employee’s dissatisfaction, untrained staff and health issue. On the other hand SIS has
a lot of advantages that are sufficient to convinces the top management to use the
S.I.S. as every organization is running to improve their S.I.S to gain competitive
advantage over their revelries for example competitive advantage, maximum return on
investments, better communication system, good decision making and innovation. At
the end there are also some real time examples which show the improvement in the
business progress by using the information system in the organization. e.g. (UPS, KIA).
Referencing:
o James O’Brien Management information system.
o Steven Alter Information system.
o http://alexandra.di.uoa.gr/courses/mis/docs/Microsoft%20PowerPoint%20-
%20Lecture%202-UoA.pdf
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o http://www.businessdictionary.com/definition/information-
system.html#ixzz1lzCblJDN
o http://it.toolbox.com/wiki/index.php/Strategic_Information_System
o http://dspace.mit.edu/bitstream/handle/1721.1/45726/27358412.pdf?sequence=1
o http://alexandra.di.uoa.gr/courses/mis/docs/Microsoft%20PowerPoint%20-
%20Lecture%202-UoA.pdf
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