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MIS – Subsystems
& Types
ByArun Mishra
Subsystems of an MIS
Two approaches to define subsystemOrganisational Function
Subsystem: Supports the various functions of an Organisation. Ex. Marketing, Production, Personnel etc.
Activity Subsystem: Supports the activity for which they are used. Ex. Transactions, Operations etc.
MIS Subsystems
MIS Subsystems
STRATEGIC PLANNING
MANAGEMENT CONTROL
OPERATIONAL CONTROL
TRANSACTION PROCESSING
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Organisational Functions
Organisational Function Subsystems
Major Functional Subsystems
Some Uses
Marketing Information System
Sales forecasting, Sales planning, Sales analysis
Manufacturing Information System
Production planning & scheduling, cost control analysis
Personnel Information System
Salary Admn., Planning HR requirement, performance analysis
Accounting Information System
Financial Analysis, cost analysis, Capital planning, etc.
Logistics Information System
Planning & control of Purchasing, inventories, distribution.
Information Processing System
Planning of Information System, cost – effectiveness analysis
Top Management System
Strategic Planning, resource allocation
Activities Subsystems
Activity Subsystems Some Uses
Transaction Processing System
Processing of orders, shipments, & receipts
Operational Control System
Scheduling of activities and performance reports
Management Control System
Formulation of Budgets & resource allocation
Strategic Planning System
Formulation of Objectives & strategic plan
Types of Types of Information Information
SystemsSystems
Levels of Management
Upper or Top or Strategic Management
Middle or Tactical Management
Lower level Management
Three levels of management
Strategic
Tactical
Operational
Levels of Management
Lower or Operational level Management
They make structured decisions (Operational decisions).Structured decision It’s a predictable
decision that can be made following a well defined set of routine procedures.
Most decisions at this level require easily defined information that relates to the current status and activities within the basic business functions.
Information is gained from detailed reports which contain information about routine activities.
Detailed tasks defined by middle management are carried out by people at operational level.
Middle or Tactical Management
Acquire and arrange the resources (Computers, people etc) to meet the goals of an organization.
Define the detailed tasks to be carried out at the operational level.
Information needed involves review, summarization and analysis of data to help plan and control operations and implement policy that has been formulated by upper management.
Information is usually given to middle managers as summarized reports.
Deals with semi structured decisions. (Tactical decisions) Semi structured decisions that must be made
without a base of clearly defined informational procedures. In most cases a semi structured decision is complex, requiring detailed analysis and extensive computations.
Upper or Top or Strategic Management
Decides on the broad objectives of an organization.
Make unstructured decisions. (Strategic decision).Unstructured decisions are the
most complex type of decisions and are rarely based on predetermined routine procedures. They involve subjective judgments of the decision maker.
Types of Information Systems
Operations Support Systems
1. TRANSACTION PROCESSING SYSTEMSi. Transaction processing systems record and
process data resulting for business transactions.
ii. Typically examples are information systems that process sales, purchases, and inventory changes.
iii. These can be processed and used by management information systems, decision support systems, and executive information systems.
2. PROCESS CONTROL SYSTEMSi. Operation support systems also make routine
decisions that control operational processes.
ii. Examples are automatic inventory reorder decisions and production control decisions.
Operations Support Systems
3. ENTERPRISE COLLABORATION SYSTEMSi. Enterprise collaboration systems are
information systems that use a variety of information technologies to help people work together.
ii. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups.
Management Support Systems
1. MANAGEMENT INFORMATION SYSTEMS:
i. Management information systems (MIS) are the most common form of management support systems.
ii. They provide managerial end users with information that support much of their day-to-day decision-making needs.
iii. M IS provide a variety of reports and displays to management.
Management Support Systems
2. DECISION SUPPORT SYSTEMS:i. A natural progression from information reporting
systems and transaction processing systems. ii. Decision support systems are interactive,
computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users.
3. EXECUTIVE INFORMATION SYSTEMS:i. EIS are management information systems
tailored to the strategic information needs of top management.
ii. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems.
ASSIGNMENT #2
Explain Subsystems of an MIS.
Describe Briefly Types of Systems.
HOW SYSTEMS ARE BUILD FROM
SUBSYSTEMS
Decomposition
A complex system is very difficult to understand as a whole.
Therefore, it is decomposed or divided into subsystems. The sum of subsystems constitutes the entire system.
The process of decomposition is continued to with subsystems divided into smaller subsystems until the smallest subsystem are of manageable size.
These subsystems generally form hierarchical structure.
Hierarchical relations of subsystems
An example of Decomposition1. Information system divided into subsystem such
as:a. Sales & Order entryb. Inventoryc. Productiond. Personnel & Payrolle. Purchasingf. Accounting & Controlg. Planning
2. Each subsystem is further divided into subsystems. Ex. Personnel & Payroll:a. Personnel Reportsb. Payroll data entry & validationc. Hourly Payroll processingd. Salaried payroll processinge. Payroll Report for managementf. Payroll report for Government
3. The subsystems defined in (2) might be further subdivided into smaller subsystems or modules. For Example, the hourly payroll processing might be divided into modules for calculation of deductions & net pay, payroll register & audit controls preparations, register & controls outputs.
Simplification
The process of decomposition could lead to a large number of subsystem interfaces to define.
Each interconnection is a potential interface for communication among subsystems.
Simplification is the process of organizing subsystems so as to reduce the number of interconnections. Methods of simplification are: Clusters Decoupling
All systems interconnected
A1 A2
A3 A4
B1 B2
B3 B4
Cluster Method
Clusters of subsystems are established which interact with each other, then a single interface path is defined from the cluster to other subsystems or clusters of subsystems.
For Example: A database assessed by many programs, but the interconnection is through a database management interface.
Systems connected within cluster & clusters interconnected with single
interface
A1 A2
A3 A4
B1 B2
B3 B4
Decoupling Method
If two different subsystems are connected very tightly, very close coordination & timing between them is required.
Because, they are somewhat independent, it is difficult to make them operate completely in synchronized fashion.
The solution is to decouple or loosen the connection so that the two systems can operate in the short run with some measures of independence.
Some means of decoupling are: Inventories, buffer or waiting line Slack & flexible resources Standards
Means of Decoupling
What is Information?
Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective action or decision.
Information reduces uncertainty.Information tells something the
receiver did not know or could not predict.
Data Vs. Information
Data Raw facts in isolation. These are isolated facts convey meaning but generally are not useful by themselves.
Information is data that has been manipulated to be useful to someone. In other words, information must have value, or it is still data. Information tells people something they don’t already know or confirms something that is suspect.
Value of Information
The value of Information is described most meaningfully in the context of a decision.
The definition discussed earlier recognizes both; the value of information in a
specific decision and,the value of information in
motivation, model building, & background building affecting the future decisions & actions.
Value of Information in Decision Making
Decision theory provides approaches for making decisions under certainty, risk, & uncertainty.Decision making under certainty
assumes perfect information as to outcomes;
Risk assumes information as to the probability of each outcome; and
Uncertainty assumes a knowledge of possible outcomes but no information as to probability.
Value of Information in Decision Making
In decision theory the value of information is the value of change in decision behaviour caused by the information less the cost of obtaining the information.
In other words, out of set of possible decisions, a decision maker will select one on the basis of information at hand. If the new information causes the different
decision, the value of new information is the difference in
value of outcome of the old decision & that of the new decision,
less the cost of obtaining the new information.
If the new information does not cause different decision then value of information is Zero.
Value of Information in Decision Making
Value of Perfect Information: is computed as the difference between the optimal policy without perfect information & the optimal policy with perfect information.
Almost no decisions are made with perfect information because: The needed information is unavailable. The effort to acquire the information is too
costly. There is no knowledge of the availability of
the information. The information is not available in the form
needed.
Value of Information in Decision Making
Value of Information & Sensitivity Analysis: Sensitivity analysis consists of procedures to determine the degree of impact on a solution or a model of changes in one or more variables. For Example: What is the effect on the profit of a 10% increase in sales
or 10% decrease in sales? Will the project be justified of the cost increases 10%?
If the decision is not sensitive to the value of variables, additional information on the future value of variable will have no effect on decision (have no Value.)
If the decision is highly sensitive to change in the future value of variable, sensitivity analysis also indicates the degree of sensitivity. The effect shows the value of more information to reduce uncertainty.
Value of information other than in a Decision
Motivation: Some information is motivational, it provides the information with a report on how well they are doing. This feedback information may motivate decisions.
Model Building: The management & operation of a enterprise function with models of the enterprise. Information that is received be these managers may result in change or reinforcement of their models.
Value of information other than in a Decision
Background Building: In decision theory the value of information is the value of change in decision behaviour, but the information has value only to those who have the background knowledge to use it in a decision. The most qualified person generally uses information most effectively but may need less information since experience has already reduced uncertainty.