Information

Systems
Dr. Anup Palsokar
Professor & Head – Computer Applications
SIES College of Management Studies
Agenda
 Information Systems
 Relevance of Information systems
 Management Information Systems
 Relevance of MIS in Banking
 MIS components
 Use of MIS in Decision making
 Factors affecting success and failure
 Brainstorming
Information Systems
 Information Systems are becoming the
foundation of business models and
processes
 They allow for the distribution of
knowledge
IT and IS
 What is Information Technology?
 Any form of technology used by people to
handle information.
 What are Information Systems?
 Integrated components for capturing,
processing, storing and disseminating
information in an organisation.
 Interdisciplinary systems that provide
information to users in organisations.
Information and Data
 Data
 Streams of raw facts representing events
such as business transactions – meaningless
without structure
 Information
 Clusters of facts meaningful and useful to
human beings in processes such as making
decisions
Data v/s Information
Attributes of Useful Information

Attributes
Quality The accuracy and reliability of available
information affects the quality of decisions that
managers make using the information.

Timelessness The availability of real-time information that

reflects current conditions allows managers to
maximize the effectiveness of their decisions.

Completeness Complete information allows managers to

consider all relevant factors when making
decisions.

Relevance Having information specific to a situation assists

managers in making better decisions.
Examples of IT and IS
 Examples of IT
 Hardware (PC, UNIX server)
 Software (Windows, Word, Eclipse, Oracle)
 Consumer devices (mobiles, tablets)
 Examples of IS
 File systems, databases, e-mail servers /
clients
 e-commerce systems
 student records system, SAP, Finnacle, Omni
Components of an IS
Why are IS Important?
 For an organisation to survive and prosper
 More locations (networking, Internet)
 New products and services
 Improve jobs and work flows:
 Efficiency
 Cost

 Ethical and social issues

Why is IS Important?
 Worldwide changes:
 Global economy
 Knowledge- or information-based society
 Business enterprise
 Digital firm
 Classification of IS
Information Systems

Operations Management
Support System Support System

Transaction Office Management Decision Executive

processing Process control support information
automation information
systems systems systems systems
systems systems
 Classification of IS cont….
1. Operations support systems process data generated by business operations
Major categories are:
i) Transaction processing systems
ii) Process control systems
iii) Office automation systems
2. Management Support Systems provide information and support needed for
effective decision making by managers
Major categories are
i) Management Information System
ii) Decision Support Systems
iii) Executive Information System
 Classification of IS cont….
1. Operations Support System
i) Transaction processing systems
 Process business exchanges
 Maintain records about the exchanges
 Handle routine, yet critical, tasks
 Perform simple calculations
ii) Process control systems monitor and control industrial
processes.
iii) Office automation systems automate office procedures and
enhance office communications and productivity.
 Classification of IS cont….
2. Management support systems provide information and support
needed for effective decision making by managers
Major categories are:

i) Management information systems

 Routine information for routine decisions
 Operational efficiency

 Use transaction data as main input

 Databases integrate MIS in different functional areas

 Classification of IS cont….

ii) Decision Support System

• Interactive support for non-routine decisions or problems
• End-users are more involved in creating a DSS than an MIS

iii) Executive information systems

provide critical information tailored to the information needs of
executives
What is an MIS?
 A system that provides right Information
 To the right person
 At the right place
 At the right time
 In the right form
 At the right cost
Management Information
Systems
 MIS
 An MIS provides managers with information and
support for effective decision making, and provides
feedback on daily operations.
 Output, or reports, are usually generated through
accumulation of transaction processing data.
 Each MIS is an integrated collection of subsystems,
which are typically organized along functional lines
within an organization.
MIS : A Complex web
 MIS is a complex web with loads of inputs and
outputs with many interdependencies.
Sources of
Management
Information
Outputs of a
Management Information System
 Scheduled reports
 Produced periodically, or on a schedule (daily, weekly,
monthly)
 Key-indicator report
 Summarizes the previous day’s critical activities
 Typically available at the beginning of each day
 Demand report
 Gives certain information at a manager’s request
 Exception report
 Automatically produced when a situation is unusual or
requires management action
Characteristics of a Management
Information System
 Provides reports with fixed and standard
formats
 Hard-copy and soft-copy reports
 Uses internal data stored in the computer
system
 End users can develop custom reports
 Requires formal requests from users
 Management Information Systems for
Competitive Advantage

 Provides support to managers as they

work to achieve corporate goals
 Enables managers to compare results to
establish company goals and identify
problem areas and opportunities for
improvement
Functional View of MIS
Bank's Business

Core MIS & ATMs

Banking (CBS) Intranet POS Terminals
and Cash
dispenser
Electronic
Banking Card
Corporate Management
Network
Any Branch Document
Banking Management

Risk Resource
CRM
Management Management
Functional Aspects
 MIS is an integrated collection of
functional information systems, each
supporting particular functional areas.

Schematic
 Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

Accounting
Transaction Databases MIS Exception reports
processing of
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions Etc.
Databases Human
of
Resources
external
data MIS
Extranet
Etc.
Financial MIS
 Provides financial information to all
financial managers within an organization.
 Databases of Financial
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Financial
systems transactions MIS Financial
for each applications
TPS databases

Business
transactions
Financial statements
Financial
Operational Uses and management ES
Internet or databases of funds
Extranet Financial statistics
for control

Business Customers,
transactions Suppliers

Finiancial MIS
 Inputs to the Financial
Information System
 Strategic plan or corporate policies
 Contains major financial objectives and often
projects financial needs.
 Transaction processing system (TPS)
 Important financial information collected from almost
every TPS - payroll, inventory control, order
processing, accounts payable, accounts receivable,
general ledger, Daily transactions (all types of
accounts).
 External Sources
 Annual reports and financial statements of
competitors and general news items.
 Financial MIS Subsystems
 Financial subsystems
 Profit/loss and cost systems
 Auditing
 Internal auditing
 External auditing
 Uses and management of funds
It’s a complex web of subsystems………
Present Scenario
Present Scenario cont….
 Multiple Software's are used across
various departments
 Multiple sources of data generation
 No synergy across vendors and platforms
 Difficult to reconcile and interpret.
Why We need an MIS in
Banking
 To provide software to extract data from Finacle /
BαNCS and other applications and pool it at a single
location (CDR).
 For automatic generation of statutory reports in
CDR/MIS/any other server without manual intervention in
the format required by RBI.
 To provide application / interface to user departments at
Head office, GM office, ZONAL Office and branches to
view, generate various MIS reports as per requirement
 To have Business Intelligence software capable of
multidimensional analysis across various parameters as
may be user defined, as well as “what if reports &
forecasting.
How are they developed?
Building up an MIS
 System Investigation / Study
 Identifying the Problem
 Background Analysis
 System Analysis
 Workability
 Specification of the New System
 Identifying Data Items and components
 System Design
 General Design
 Detailed Design
 Tools Used : Flow Charts, DFD, Data Dictionary,
Structured English, Decision Tree, Decision Tables
Building up an MIS cont….
 System Implementation
 Coding the system
 Defining procedures
 Parallel Run
 Pilot Run
 System Maintenance
 Knowing changes required
 Studying the performance
MIS & Decision Making
 The decision making process is the complex
process in the higher management.
 The complexity is the result of many factors such
as interrelationship among the decision makers,
job responsibility, feasibility, ethics and the
probable impact on the business.
 It will vary with the organization, situation and
the individuals
Problems in Decision Making
 Ascertaining the problem.
 Insufficient knowledge.
 Not enough time to be rational.
 Environment may not co-operate.

 Ex: sales are declining. The real problem may

be in the quality of the product and you may be
thinking in improving the quality of
advertisement.
Ascertaining class of information
Information Class Example User
Organizational Employee, products, Many users at all levels
services, location,
turnover etc.
Functional Purchase, sales, Functional heads and
productions, stocks, others
marketing etc.
Managerial Payable, outstanding, Middle and top level
budget, statutory management
information
Knowledge Entire organization Middle ,top and bottom
level management
Decision Support Status of information, Middle and low level
various standard etc management
Operational Information on Operational and
production, sales management supervisor
,purchase etc.
Matrix of Information versus
User for Personnel Function
Information Manager Manager Manager Manager
Entity (Personnel) (Operations) (Admin) (Finance)
Employee
Attendance √ √ √ --
Salary and
Overtime √ -- √ √
HR Information
√ √ -- --

 Usage of Organisational information is different at

different levels
Determining the information requirement

 Thedifficulty to determine a correct and

complete set of information is on
account of the factor given below:
1) The capability constraint of human being as
an information processor
2) The nature and the variety of information in
précised terms
3) Reluctance of decision maker to spell out
the information
4) The ability of the decision makers to specify
information
Determining Information
Requirements cont….
• There are 4 methods of determining
information requirements
- Asking or interviewing
- Determining from existing system
- Analyzing the critical success factors
- Experimentation and modeling
Methods of handling Uncertainty
Levels of uncertainty Level of management Method

Low Operational Interview

management
A risk situation Middle management Determine from existing
system
Very risky Middle and top Determine through
management critical success factors
High Top management Experiment ,modeling
and sensitivity analysis
Steps in Decision Making
 Identify the Problem
 Analyse the Problem
 Collect Relevant Data
 Develop alternate solutions
 Select the best solution
 Convert decisions into action
 Ensure feedback
Tools for Decision Making
 Herbert simon Model
 Intelligence Phase
 Data Collected, computations
done & results inferred
 Design Phase
 Model for problem developed
 Tested with different decisions

 Choice Phase
 Evolve selection criteria and act.
Decision Making Systems
 Closed Decision making
 Manager operates in a known environment
 Ex: Penalising the borrower for loan default
 Open Decision making
 Manager operates in an environment not
known to him
 Ex : Deciding service charges for a newly
introduced facility
Nature of Decisions
 Programmed Decisions
 Decisions based on Rules / Guidelines
 May be delegated to lower level managers
 Ex : Waive the debit card fee if customer makes purchases of
more than Rs.20000/- per month.
 Non-Programmed Decisions
 Decisionswhich cannot be made using rules
 Handled by top management
 Ex: Deciding the limit of Rs.20000/- for card fee waiver
IS – Success Factors
 An appropriate information processing technology
meeting the data processing & analysis need of the user.
 IS should be the open system in nature to modify the
information needs.
 IS should focus on the result & goals and highlight the
factors & reasons for achievement or non-achievement
 IS should be easy to operate & user friendly.
 IS should concentrate on all the levels of information
needs
IS – Failure factors
 IS is conceived as a data processing tool not as
information processing tool.
 Adequate attention is not given to the quality
control aspects of inputs , process and output.
 IS is developed without streamlining the
transaction processing in the organisation.
 Administrative indiscipline, wrong coding &
deviation in system specification also cause
failure.