Amity University
By
Mr. Nishant Singhai
Management
Information System
Short for management information system or management information services, and pronounced as separate letters, MIS refers broadly to a computer-based system that provides managers with the tools for organizing, evaluating and efficiently running their departments. In order to provide past, present and prediction information, an MIS can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently.
Within companies and large organizations, the department responsible for computer systems is sometimes called the MIS department. Other names for MIS include IS (Information Services) and IT (Information Technology).
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Preface
Information Systems (IS) enables new approaches to improve efficiency and efficacy of business models. This course will equip the students with understanding of role, advantages and components of an Information System.
The objective of the course is to help students integrate their learning from functional areas, decision making process in an organization and role of
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Updated Syllabus
Course Contents: Module IRole of data and information, Organization structures, Business Process, Systems Approach and introduction to Information Systems.
Module II
Resources and components of Information System, integration and automation of business functions and developing\ business models. Classification of Information System
Module III
Architecture, development and maintenance of Information Systems, Centralized and Decentralized Information Systems, Factors of success and failure, value and risk of IS.
Module IV
Decision Making Process, Decision Support Systems, Models and approaches to DSS Module V
Introduction to Total Quality Management and Enterprise Resource Planning. ERP: role, advantages, reasons of success and failure,
Module VI
Financial Management Information Systems in Developing Countries by International Monetary Fund
Text & References:
Text:
MIS: Managing the digital firm, Kenneth C.Landon, Jane P. Landon, Pearson Education. References:
Management Information Systems, Effy OZ, Thomson Leaning/ Vikas Publications Management Information Systems, James A. O’Brein, Tata McGraw-Hill
Management Information System, W.S Jawadekar, Tata Mc Graw Hill Publication. Management Information System, David Kroenke, Tata Mc Graw Hill Publication. MIS: Management Perspective, D.P. Goyal, Macmillan Business Books.
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Index
Module I - page no. 4
Role of data and information, Organization structures, Business Process, Systems Approach and introduction to Information Systems.
Module II - page no. 35
Resources and components of Information System, integration and automation of business functions and developing\ business models. Classification of Information System
Module III - page no. 61
Architecture, development and maintenance of Information Systems, Centralized and Decentralized Information Systems, Factors of success and failure, value and risk of IS.
Module IV - page no. 77
Decision Making Process, Decision Support Systems, Models and approaches to DSS
Module V - page no.118
Introduction to Total Quality Management and Enterprise Resource Planning. ERP: role, advantages, reasons of success and failure,
Module VI - page no. 135
Financial Management Information Systems in Developing Countries by International Monetary Fund
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DATA
The term data means groups of information that represent the qualitative or quantitative attributes of a variable or set of variables. Data (plural of "datum", which is seldom used) are typically the results of measurements and can be the basis of graphs, images, or observations of a set of variables. Data are often viewed as the lowest level of abstraction from which information and knowledge are
derived. In discussions of problems in geometry, mathematics, engineering, and so on, the terms givens and data are used interchangeably. Also, data is a
representation of a fact, figure, and idea. Such usage is the origin of data as a concept in computer science: data are numbers, words, images, etc., accepted as they stand. Data is now often treated as a singular mass noun in informal usage, but usage in scientific publications shows a divide between the United
States and United Kingdom. In the United States the word data is sometimes used in the singular, though scientists and science writers more often maintain the
traditional plural usage. Some major newspapers such as the New York Times use it alternately in the singular or plural. In the New York Times the phrases "the survey data are still being analyzed" and "the first year for which data is available" have appeared on the same day. In scientific writing data is often treated as a plural, as in These data do not support the conclusions, but many people now think of data as a singular mass entity like information and use the singular in general usage. British usage now widely accepts treating data as singular in standard
English, including everyday newspaper usage at least in non-scientific use. UK scientific publishing still prefers treating it as a plural. Some UK university style guides recommend using data for both singular and plural use and some
recommend treating it only as a singular in connection with computers.
Raw data refers to a collection of numbers, characters, images or other outputs from devices to convert physical quantities into symbols, that are unprocessed. Such data is typically further processed by a human or input into
a computer, stored and processed there, or transmitted (output) to another human or computer (possibly through a data cable). Raw data is a relative term; data processing commonly occurs by stages, and the "processed data" from one stage may be considered the "raw data" of the next.
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Information
Information as a concept has many meanings, from everyday usage to technical
settings. The concept of information is closely related to notions of constraint, communication, control, data, form, instruction, knowledge, meaning, mental stimulus, pattern, perception, and representation.
The English word was apparently derived from the Latin accusative form (informationem) of the nominative (informatio): this noun is in its turn derived from the verb "informare" (to inform) in the sense of "to give form to the mind", "to discipline", "instruct", "teach": "Men so wise should go and inform their kings." (1330) Inform itself comes (via French) from the Latin verb informare, to give form to, to form an idea of. Furthermore, Latin itself already contained the word informatio meaning concept or idea, but the extent to which this may have influenced the development of the word information in English is unclear.
Information is the state of a system of interest. Message is the information
materialized.
Information is a quality of a message from a sender to one or more receivers. Information is always about something (size of a parameter, occurrence of an event, value, ethics, etc). Viewed in this manner, information does not have to be accurate; it may be a truth or a lie, or just the sound of a falling tree. Even a disruptive noise used to inhibit the flow of communication and create
misunderstanding would in this view be a form of information. However, generally speaking, if the amount of information in the received message increases, the
message is more accurate.
Even though information and data are often used interchangeably, they are actually very different. Data is a set of unrelated information, and as such is of no use until it is properly evaluated. Upon evaluation, once there is some significant relation between data, and they show some relevance, then they are converted into
information. Now this same data can be used for different purposes. Thus, till the data convey some information, they are not useful and therefore not information.
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Meaning of data, information and knowledge
The terms information and knowledge are frequently used for overlapping
concepts. The main difference is in the level of abstraction being considered. Data is the lowest level of abstraction, information is the next level, and finally,
knowledge is the highest level among all three. Data on its own carries no
meaning. In order for data to become information, it must be interpreted and take on a meaning. For example, the height of Mt. Everest is generally considered as "data", a book on Mt. Everest geological characteristics may be considered as "information", and a report containing practical information on the best way to reach Mt. Everest's peak may be considered as "knowledge".
Information as a concept bears a diversity of meanings, from everyday usage to technical settings. Generally speaking, the concept of information is closely related to notions of constraint, communication, control, data, form, instruction,
knowledge, meaning, mental stimulus, pattern, perception, and representation. It is people and computers who collect data and impose patterns on it. These patterns are seen as information which can used to enhance knowledge. These patterns can be interpreted as truth, and are authorized as aesthetic and ethical criteria. Events that leave behind perceivable physical or virtual remains can be traced back through data. Marks are no longer considered data once the link between the mark and observation is broken. In other words, when an occurrence leaves perceivable marks, those marks attain the status of data.
In many a case, the business organizations started as a one-man show but with the passage of time, their size has increased manifold. Although the functions
performed are basically the same, the volume and complexity of operations have increased geometrically. As With all growing companies, new products are developed, Sales volume grows, the number of employees increased, factors outside the company become increasingly complex, and the managerial problems surrounding the operation of the organization generally expand more rapidly than the company size. Communications channels are more difficult, authority must be delegated and information needs expand. The increase in company size results in the need for additional information collection, processing and distribution. It now becomes necessary to handle many customer accounts, many production records,
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and many more interrelation- ships among functions. In addition, it becomes necessary to assign people to supervise other people.
Before we come to our purpose to speak about MIS, we should give a general outline what a company's or how we can describe a company. Other- wise we would have problems to understand MIS, which is part of company.
Hence, large business organization, whether it has developed from a one man show or otherwise, has to perform a lot of functions to achieve the objectives/ goals set and in the process deploys lot of resources viz., men, material, machine money etc.
The systems concept is of immense use in understanding business organization and their functions. We define a system as a group of elements either physical or non-physical in nature that exhibits a set of interrelationship among them. The elements of a system may interact with each other towards a common goal i.e., the system is a goal (objective) seeking one. However, not all systems are goal seeking.
A business organization system consists of a group of people who process material and informational resources towards a set of multiple common goals including an economic profit for the business by performing financing, design, production and marketing functions to achieve finished goods and their sale at a specified
minimum per year.
Business organizations are usually systems operating within larger systems
(industry or economy) and interact with their environment, hence they act as open systems i.e., the individual business organizations are influenced by the changes in the environment or industry. The company can be identified as an open system by its individually small influence on its environment or vice versa. It reacts with its environment in such a way as to improve its functioning, achievement or
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Management Information Systems
Management information systems encompass a broad and complex topic. To make this topic more manageable, boundaries will be defined. First, because of the vast number of activities relating to management information systems, a total review is not possible. Those discussed here is only a partial sampling of activities,
reflecting the author's viewpoint of the more common and interesting
developments. Likewise where there were multiple effects in a similar area of development, only selected ones will be used to illustrate concepts. This is not to imply one effort is more important than another. Also, the main focus of this paper will be on information systems for use at the farm level and to some lesser extent systems used to support researchers addressing farm level problems (e.g.,
simulation or optimization models, geographic information systems, etc.) and those used to support agribusiness firms that supply goods and services to agricultural producers and the supply chain beyond the production phase.
Secondly, there are several frameworks that can be used to define and describe management information systems. More than one will be used to discuss important concepts. Because more than one is used, it indicates the difficult of capturing the key concepts of what is a management information system. Indeed, what is viewed as an effective and useful management information system is one environment may not be of use or value in another.
Lastly, the historical perspective of management information systems cannot be ignored. This perspective gives a sense of how these systems have evolved, been refined and adapted as new technologies have emerged, and how changing
economic conditions and other factors have influenced the use of information systems.
Before discussing management information systems, some time-tested concepts should be reviewed. Davis offers a commonly used concept in his distinction
between data and information. Davis defines data as raw facts, figures, objects, etc. Information is used to make decisions. To transform data into information,
processing is needed and it must be done while considering the context of a decision. We are often awash in data but lacking good information. However, the success achieved in supplying information to decision makers is highly variable. Barabba, expands this concept by also adding inference, knowledge and wisdom in
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his modification of Haechel's hierarchy which places wisdom at the highest level and data at the lowest. As one move up the hierarchy, the value is increased and volume decreased. Thus, as one acquires knowledge and wisdom the decision making process is refined. Management information systems attempt to address all levels of Haechel's hierarchy as well as convertingdata into information for the decision maker. As both Barabba and Haechel argue, however, just supplying more data and information may actually be making the decision making process more difficult. Emphasis should be placed on increasing the value of information by moving up Haechel's hierarchy.
Another important concept from Davis and Olsen is the value if information. They note that ―in general, the value of information is the value of the change in decision behavior caused by the information, less the cost of the information.‖ This
statement implies that information is normally not a free good. Furthermore, if it does not change decisions to the better, it may have no value. Many assume that investing in a ―better‖ management information system is a sound economic
decision. Since it is possible that the better system may not change decisions or the cost of implementing the better system is high to the actual realized benefits, it could be a bad investment. Also, since before the investment is made, it is hard to predict the benefits and costs of the better system, the investment should be viewed as one with risk associated with it.
Another approach for describing information systems is that proposed by Harsh
and colleagues. They define information as one of four types and all these types are important component of a management information system. Furthermore, the
various types build upon and interact with each other. A common starting level is Descriptive information. This information portrays the ―what is‖ condition of a business, and it describes the state of the business at a specified point in time. Descriptive information is very important to the business manager, because without it, many problems would not be identified. Descriptive information includes a variety of types of information including financial results, production records, test results, product marketing, and maintenance records.
Descriptive information can also be used as inputs to secure other needed types of information. For example, ―what is‖ information is needed for supplying restraints in analyzing farm adjustment alternatives. It can also be used to identify problems
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other than the ―what is‖ condition. Descriptive information is necessary but not completely sufficient in identifying and addressing farm management problems. The second type of information is diagnostic information, this information portrays this ―what is wrong‖ condition, where ―what is wrong‖ is measured as the disparity between ―what is‖ and ―what ought to be.‖ This assessment of how things are versus how they should be (a fact-value conflict) is probably our most common management problem. Diagnostic information has two major uses. It can first be used to define problems that develop in the business. Are production levels too low? Is the rate earned on investment too low? These types of question cannot be answered with descriptive information alone (such as with financial and production records). A manager may often be well supplied with facts about his business, yet be unable to recognize this type of problem. The manager must provide norms or standards which, when compared with the facts for a particular business, will reveal an area of concern. Once a problem has been identified, a manager may choose an appropriate course of action for dealing with the problem (including doing nothing). Corrective measures may be taken so as to better achieve the
manager’s goals. Several pitfalls are involved for managers in obtaining diagnostic information. Adequate, reliable, descriptive information must be available along with appropriate norms or standards for particular business situations. Information is inadequate for problem solving if it does not fully describe both ―what is‖ and ―what ought to be.‖
As description is concerned with ―what is‖ and diagnostics with ‖what is wrong,‖ prediction is concerned with ―what if...?‖ Predictive information is generated from an analysis of possible future events and is exceedingly valuable with ―desirable‖ outcomes. With predictive information, one either defines problems or avoids problems in advance. Prediction also assists in analysis. When a problem is
recognized, a manager will analyze the situation and specify at least one alternative (including doing nothing) to deal with it. Predictive information is needed by
managers to reduce the risk and uncertainty concerning technology, prices, climate, institutions, and human relationships affecting the business. Such information is vital in formulating production plans and examining related financial impacts. Predictive information takes many forms. What are the expected prices next year? What yields are anticipated? How much capital will be required to upgrade
production technologies? What would be the difference in expected returns in switching from a livestock farm to a cropping farm? Management has long used various budgeting techniques, simulation models, and other tools to evaluate expected changes in the business.
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Without detracting from the importance of problem identification and analysis in management, the crux of management tasks is decision making. For every problem a manager faces, there is a ―right‖ course of action. However, the rightness of a decision can seldom, if ever, be measured in absolute terms. The choice is conditionally right, depending upon a farm manager’s knowledge, assumptions, and conditions he wishes to impose on the decision. Prescriptive information is directed toward answering the ―what should be done‖ question. Provision of this information requires the utilization of the predictive information. Predictive information by itself is not adequate for decision making. An evaluation of the predicted outcomes together with the goals and values of the manger provides that basis for making a decision. For example, suppose that a manager is considering a new changing marketing alternative. The new alternative being considered has higher ―predicted‖ returns but also has higher risks and requires more management monitoring. The decision as to whether to change plans depends upon the
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additional time and higher risk. Thus, the goals and values of a farm manager will ultimately enter into any decision.
A management information system (MIS) is a system or process that provides the information necessary to manage an organization effectively. MIS and the
information it generates are generally considered essential components of prudent and reasonable business decisions.
MIS is viewed and used at many levels by management. It should be supportive of the institution's longer term strategic goals and objectives. To the other extreme it is also those everyday financial accounting systems that are used to ensure basic control is maintained over financial recordkeeping activities.
Financial accounting systems and subsystems are just one type of institutional MIS. Financial accounting systems are an important functional element or part of the total MIS structure. However, they are more narrowly focused on the internal balancing of an institution's books to the general ledger and other financial
accounting subsystems. For example, accrual adjustments, reconciling and
correcting entries used to reconcile the financial systems to the general ledger are not always immediately entered into other MIS systems.
Accordingly, although MIS and accounting reconcilement totals for related listings and activities should be similar, they may not necessarily balance.
MIS in an INSTITUTION
An institution's MIS should be designed to achieve the following goals: • Enhance communication among employees.
• Deliver complex material throughout the institution.
• Provide an objective system for recording and aggregating information. • Reduce expenses related to labor-intensive manual activities.
• Support the organization's strategic goals and direction.
Because MIS supplies decision makers with facts, it supports and enhances the overall decision making process. MIS also enhances job performance throughout an institution. At the most senior levels, it provides the data and information to help the board and management make strategic decisions. At other levels, MIS provides the means through which the institution's activities are monitored and information is distributed to management, employees, and customers.
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Effective MIS should ensure the appropriate presentation formats and time frames required by operations and senior management are met. MIS can be maintained and developed by either manual or automated systems or a combination of both. It should always be sufficient to meet an institution's unique business goals and objectives. The effective deliveries of an institution's products and services are supported by the MIS. These systems should be accessible and useable at all appropriate levels of the organization.
MIS is a critical component of the institution's overall risk management strategy. MIS supports management's ability to perform such reviews. MIS should be used to recognize, monitor, measure, limit, and manage risks. Risk management
involves four main elements: • Policies or practices.
• Operational processes. • Staff and management. • Feedback devices.
Frequently, operational processes and feedback devices are intertwined and cannot easily be viewed separately. The most efficient and useable MIS should be both operational and informational. As such, management can use MIS to measure performance, manage resources, and help an institution comply with regulatory requirements. One example of this would be the managing and reporting of loans to insiders. MIS can also be used by management to provide feedback on the effectiveness of risk controls.
Controls are developed to support the proper management of risk through the institution's policies or practices, operational processes, and the assignment of duties and responsibilities to staff and managers.
Technology advances have increased both the availability and volume of
information management and the directors have available for both planning and decision making. Correspondingly, technology also increases the potential for inaccurate reporting and flawed decision making. Because data can be extracted from many financial and transaction systems, appropriate control procedures must be set up to ensure that information is correct and relevant. In addition, since MIS often originates from multiple equipment platforms including mainframes,
minicomputers, and microcomputers, controls must ensure that systems on smaller computers have processing controls that are as well defined and as effective as those commonly found on the traditionally larger mainframe systems.
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MIS for Farm Management
The importance of management information systems to improve decision making has long been understood by farm management economists. Financial and
production records have long been used by these economists as an instrument to measure and evaluate the success of a farm business. However, when computer technology became more widely available in the late 1950s and early 1960s, there was an increased enthusiasm for information systems to enhance management decision processes. At an IBM hosted conference, Ackerman, a respected farm management economist, stated that:
―The advances that have taken place in calculating equipment and methods make it possible to determine the relationship between ultimate yields, time of harvest and climatic conditions during the growing season. Relationship between the
perspective and actual yields and changing prices can be established. With such information at hand the farmer should be in a position to make a decision on his prediction with a high degree of certainty at mid-season regarding his yield and income at harvest time.‖
This statement, made in 1963, reflects the optimism that prevailed with respect to information systems. Even though there was much enthusiasm related to these early systems they basically concentrated on accounting activities and production records. Examples include the TelFarm electronic accounting system at Michigan State University and DHIA for dairy operations. These early systems relieved on large mainframe computers with the data being sent to a central processing center and the reports send back to the cooperating businesses. To put these early efforts into a management information system framework, the one proposed by Alder is useful. (See Figure ). They would be defined as data oriented systems with limited data analysis capabilities beyond calculating typical ratios (e.g., return on assets, milk per cow, etc.).
By the mid 1960s it became clear that the accounting systems were fairly effective in supplying descriptive and diagnostic information but they lacked the capacity to provide predictive and prescriptive information. Thus, a new approach was needed – a method of doing forward planning or a management information system that was more models oriented. Simulation models for improving management skills and testing system interaction were developed. As an example, Kuhlmann, Giessen University, developed a very robust and comprehensive whole farm simulation model (SIMPLAN) that executed on a mainframe computer. This model was based on systems modeling methods that could be used to analyze different production
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strategies of the farm business. To be used by managers, however, they often demanded that the model developer work closely with them in using the model.
Types of Information Systems
Another important activity during this period was the ―Top-Farmer Workshops‖ developed by Purdue University. They used a workshop setting to run large linear-programming models on mainframe computers (optimization models) to help crop producers find more efficient and effective ways to operate their business.
As mainframe timeshare computers emerged in the mid-1960's, I became possible to remotely access the computer with a terminal and execute software. Systems such TelPlan developed by Michigan State University made it possible for agricultural producers to run a farm related computer decision aids. Since this machine was shared by many users, the cost for executing an agriculturally related decision aid was relatively inexpensive and cost effective. These decision aids included optimization models (e.g., least cost animal rations) budgeting and simulation models, and other types of decision aids. These decision aids could be accessed by agricultural advisor with remote computer terminals (e.g., Teletype machine or a touch-tone telephone). These advisors used these computer models at the farm or at their own office to provide advice to farm producers.
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These were exciting times with many people becoming involved in the
development, testing, refining, and implementation of information systems for agriculture. Computer technology continued to advance at a rapid pace, new communication systems were evolving and the application of this technology to agriculture was very encouraging. Because of the rapid changes occurring, there were international conferences held where much of the knowledge learned in developing these systems was shared. One of the first of these was held in Germany in the mid-1980s.
It was also clear from these early efforts that the data oriented systems where not closely linked to the model oriented systems. Information for the data oriented systems often did not match the data needed for the model oriented systems. For example, a cash-flow projection model was not able to directly use financial data contained in the accounting system. In most cases, the data had to be manually extracted from the accounting system and re-entered into the planning model. This was both a time consuming and error prone process.
Because of the lack of integration capabilities of various systems, they were devoid of many of the desirable characteristics of an evolving concept describes as
decision support systems (DSS). These systems are also known as Executive Support Systems, and Management Support System, and Process Oriented Information Systems. The decision support system proposed by Sprague and Watson (House, ed.) has as its major components a database, a modelbase, a database/modelbase management system and a user interface (see Figure). The database has information related to financial transactions, production information, marketing records, the resource base, research data, weather data and so forth. It includes data internally generated by the business (e.g., financial transactions and production data) and external data (e.g., market prices). These data are stored in a common structure such that it is easily accessible by other database packages as well as the modelbase.
The modelbase component of the system has decision models that relate to operational, tactical and strategic decisions. In addition, the modelbase is able to link models together in order to solve larger and more complex problems,
particularly semi-structured problems. The database/modelbase management system is the bridge between database and modelbase components. It has the ability to extract data from the database and pass it to the modelbase and vice versa. The user interface, one of the more critical features of the system, is used to assist the decision maker in making more efficient and effective use of the system. Lastly, for these systems to be effective in supporting management decision, the
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decision maker must have the skills and knowledge on how to correctly use these systems to address the unique problem situation at hand.
Several follow-up international conferences were held to reflect these new advances in management information systems. The first of these conferences focused on decision support systems was held in Germany. This conference discussed the virtues of these systems and the approach used to support decisions. Several prototype systems being developed for agriculture were presented. From these presentations, it was clear that the decision support systems approach had many advantages but the implementation in agriculture was going to be somewhat involved and complex because of the diversity of agricultural production systems. Nevertheless, there was much optimism for the development of such systems.
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A couple of years later, another conference were held in Germany that focused on knowledge-based systems with a major emphasis on expert systems and to a lesser extent optimum control methods and simulation models. Using Alter’s scheme to describe information systems, for the most part these would be described as suggestion models. It was interesting to note that the prototype knowledge-based systems for the most part did not utilize the concepts of decisions support systems which were the focus of the earlier conference. Perhaps this was related to the fact that many of the applications were prototypes.
The international conference that followed in France focused on the low adaption rate of management information systems. This was a topic of much discussion but there were few conclusions reached except the systems with the highest adaption rate were mainly data-oriented ones (e.g., accounting systems, field record
systems, anaimal production and health records, etc.) which provide mainly descriptive and diagnostic information.
The international conferences that followed had varying themes. One of the major themes was precision agriculture with several conferences held. These conferences extolled the use of geographic information systems (GIS) in conjunction with geographic positioning systems (GPS) to record and display data regarding cropping operations (e.g., yields obtained) and to control production inputs (e.g., fertilizer levels). Other conference addressed the use of information systems to more tightly control agriculture production such as those developed for greenhouse businesses.
To briefly summarize the historical developments, there have been significant efforts devoted to improving the management information systems from the early computerized activities forty years earlier. The decision aids available have grown in number and they are more sophisticated. There has been some movement toward integration of the data oriented systems and the model oriented systems. An
examination of our current usage of management information systems, however, suggests that we have not nearly harnessed the potential of the design concepts contained modern management information systems.
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Traditional MIS have evolved to serve structured, functional, permanent
organizations. Project information systems more recently have emerged to serve temporary, relatively short-lived, multi-functional projects. Project MIS, compared to the various organizational MIS, must handle more diverse information and be more predictive and integrative in nature over a longer time span. The result is that project MIS are generally more difficult to implement, and their implementation often reveals existing incompatibilities with and between the various
organizational MIS which provide information to project systems.
Specific product and project planning and control functions and tools are identified in this paper, and the types and sources of incompatibilities are discussed.
Suggested methods of minimizing the problems are briefly presented. The underlying thesis of this discussion is that a better understanding of the differences and interfaces between project and organizational MIS will help to resolve current problems and avoid future difficulties in the implementation of information systems to serve operating project managers.
MIS IN GENERAL
In this discussion, I refer to management information systems (MIS) as identifiable sets of policies, models, procedures and files of information which operate to
record, manipulate, store, retrieve, process and display information useful in managing some aspect of an organized enterprise. Such systems may depend only on rather simple mechanical devices operated directly by human hands, such as pencils, pens, ledgers, charts, and so on; or they may also depend on more complex devices and machines, such as slide rules, calculators and electronic data
processing systems. They all seem to depend on paper to a great extent!
Perhaps Moses had the first MIS when he came down the mountain with the Ten Commandments chiseled into stone tablets. At least today's reports carry more information per pound, but they are certainly no lighter to carry than the stone tablets of Moses' day.
The basic classes of primary management information
systems may be identified as follows:
• General management • Financial
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• Logistics • Business acquisition • ResourcesGeneral management information systems are concerned with the overall,
integrative planning and direction of the total enterprise. They include methods of generating, recording and processing information related to:
• Strategic objectives and goals • Financial objectives
• Business, market and product plans to achieve the objectives
• Overall performance measurement and evaluation compared to objectives. These general management information systems depend heavily on the financial MIS, and to a lesser extent on all other types of MIS.
Financial management information systems are familiar to us all, and deal with
the basic element of resource that we all understand (at least to some extent): Money. With these systems we are able to:
• Translate the strategic, market and product plans of the enterprise into the common denominator of money.
• Plan, control and account for the production, distribution and inventory of money, resulting from the basic operations of the enterprise.
• Analyze the basic operations in monetary terms.
This class includes systems for financial planning, budgeting, cash handling, accounts and financial analysis.
Logistics management information systems enable us to plan, control and
account for the acquisition, inventory, processing, conversion, assembly and
distribution of goods and services -- the tangible repetitious transactions or work -- which generate the outflow and inflow of money. Systems within this class include purchasing, work authorization and control, production and inventory planning and control, and product distribution.
Business acquisition management information systems include procedures for
handling information related to markets, products, capabilities, competitors, customers, proposals and selling, and orders (contracts or sales). In this class are found marketing and sales systems and procedures, such as order booking, processing and billing, collections and contract administration.
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Resources management information systems deal with the basic resources of a
company other than financial), including people, know-how, plant facilities, and equipment. Included here are personnel information systems, as well as those dealing with the acquisition and utilization of capital facilities, installed equipment and other types of equipment and resources required to produce the goods and services which are delivered or sold by the organization.
Project management information systems (PMIS) enable us to plan, schedule,
execute and control projects -- those complex, unique efforts which cut across organizational and functional lines, and which must achieve the specified results at a particular point in time and within a given cost of budget. Projects may be
viewed as temporary profit centers which subcontract most if not all of the actual work required to complete them. The verb "to project" or to forecast or predict, conveys the fundamental purpose of various related PMIS: to predict how the project will come out, based on progress to date and current plans for the future.
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MIS FOR ORGANIZATIONS
An organizational chart is a diagram that shows the
structure
of
an
organization
and the relationships and relative ranks of its parts and
positions/jobs. The term is also used for similar diagrams, for example
ones showing the different elements of a field of knowledge or a group
of languages.
Organizations of all types -- business, industrial, institutional, governmental - are structured and shaped to meet the needs of the primary purpose of each individual organization. This structure invariably results in some form of hierarchy or
bureaucracy, segregating and dividing the various functions such as marketing, manufacturing, engineering, and so on. The financial, logistics, business
acquisition and resources management information systems which we have today are designed to serve the structural, hierarchical organization which has a certain permanency associated with it. Financial budgets and reports are provided for organizational sections, departments and divisions, for example. Production control systems serve the manufacturing division and have nothing to do directly with engineering. Information is provided to each functional manager concerning his limited segment of the total operation as orders are obtained and fed into
production, and as the raw materials are purchased, processed and shipped to the customers.
The organization structure, portrayed by the familiar pyramidal chart of boxes and lines, forms a fairly stable skeleton on which most, perhaps all, of these
management information systems are based.
A Company can have different subsystems (departments). For a given company it depends on its purpose, size and sometimes on his history which departments it has. Each of these departments have different responsibilities and tasks.
The organization structure of an organization manufacturing paperboard cartons for a wide variety of users and also paperboard used in the cartons is shown in Fig.
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The responsibilities of such of the functions should be clearly defined so as the objectives/goals of the organization are achieved. Unless and until the objectives of each of the function are identified properly, we shall not be in a position to
evaluate the achievements of each of the functions, their weak- nesses or strengths.
As an example, we can identify the responsibilities of marketing function as followings:
i) Formulation of sales budget. ii) The inventory of finished goods. iii). Cash receipts from sales and debtors.
iv). Personnel expenses and communication expenses.
v). Sales promotion expenses, advertising expenses, outward freight expenses, warehousing expenses etc.
vi). Loss of sales due to poor advertising, improper distribution etc. vii). Achieving the sales target.
Similarly, we can fix the responsibility for procurement function as given below:
i). Formulation of procurement budget.
ii). Manpower planning for departmental requirement. iii). Requirement and utilization of equipment.
iv). Selection of suppliers. v). Planning of safety stocks.
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vi). Disposal of unwanted stocks. vii). Controlling of budget expenses.
viii). Controlling of excess procurement expenses.
ix). Controlling of loss of sales due to lack of raw material. x). Controlling of receiving expenses.
In a similar manner, we can identify the responsibility of all functions, in a manner so as to achieve the corporate objectives.
FUNCTIONAL ORGANIZATION CHART
Information Technology Management Information Technology Training
Systems Analysis and Systems Development Vendor Analysis/Software Package
Procurement and Assistance
Information Technology Resource Contracts Assistance GIS Data Administration
GIS User Support
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MANAGEMENT
Management can be defined as the planning, organizing and control of personnel and material resources of the company in order to achieve the established
objectives. Getting things done through people and selecting, training and
motivating of people, is assumed part of the control function hence the importance of management activities.
Tasks of Management
Management tasks can be described as decision making, planning and controlling to achieve the objectives.
Decision Making
Decision making is basic to all management activities and can be defined as the process of selecting a best alternative from among several alternatives, which may be either quantitative or qualitative) for achieving the objectives. Increase in number of alternatives makes decisions more and more complex and this decision complexity decides the time of decision making. The decision complexity may be because of:
i) Variety ii) Uncertainty
iii) Time Horizon, and iv) Implications.
In an organization, decisions are made for planning, organizing, directing,
motivating and controlling of various resources. An orderly process of deriving a decision contains following elements:
i). Knowledge of situation. ii). Factors affecting the decision. iii). Constraints imposed.
iv). Developing alternatives. v). Criteria of evaluation.
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vi) Method of evaluation.
vii) Implications of the alternatives. viii) Selection of best alternatives.
EVOLUTION OF MIS FOR PROJECTS
The emergence in the past fifteen years of more numerous projects within most organizations, and the difficulties experienced in trying to plan, execute and control temporary projects using management information systems designed to serve permanent organizations, has led to the development of this new class of MIS specifically designed to manage projects.
We know that many organizations, such as the large engineering construction companies, have had some form of PMIS in operation for as long as they have been in business, because projects are essentially their only business. However, my experience indicates that these companies typically form a pyramidal, hierarchical organization structure for each major project, and thus they are able to use the more traditional MIS, which we have seen were designed to serve such structures. At some point, 10 to 15 years ago, we realized that we cannot always form a separate functional, self-supporting organization for each project. The large engineering-construction and aerospace firms continue this practice to a degree, but even they are finding that it is more efficient to be able to handle a number of projects within one basic organization, and to retain the functional structure to the maximum extent possible.
Other industries of many types have found it even less practical to set up project organizations for their numerous projects. To illustrate the diversity of business, industries, and governments presently concerned with managing projects, here is a breakdown of the more than 500 members of the Project Management Institute (PMI), representing 310 companies and organizations, and 15 universities located in 16 countries:
Processing/manufacturing/producing 31% Engineer/constructor 20%
Consultant (all fields) 20% Educational/government 11%
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Other 7%
So the need to be able to plan, execute and control many projects as they passed through the functional, divisionalized organization forced the evolution of PMIS in support of the project management capabilities of organizations. Network planning (both the activity-event and the procedure diagram techniques) emerged as a
powerful tool, if properly applied -- and as a great waste of time and effort if not properly used. This tool is one form of PMIS. From the project management viewpoint, its primary advantage is the ability to integrate the plans of many separate responsibilities and analyze both the logical sequences and the utilization of time and other resources in these plans, in terms of the total project and, in fact, many projects.
We could characterize functional management as divisive (as it divides the work along functional lines) and project management as integrative (as its prime purpose is to manage the project as a whole.) In this respect, project management is
identical to general management: the former dealing in an integrative manner with each project, and the latter integrating the enterprise as a whole. Just 10 years ago, with the publication in 1962 of the U.S. Department of Defense/NASA PERT COST document, the concept of the "work breakdown structure" emerged. This followed closely the work I was involved with at Hughes Aircraft Company, where we developed an operating "PERT Cost" system in 19611. PERT Cost became rather infamous in the next few years, and the concept went through a series of name changes and improvements. Presently, the general term "Performance Measurement Systems" is used in U.S. governmental programs and projects, but the essential PMIS elements that were present in PERT Cost are still evident in the current documentation.
A key concept which has emerged from this very expensive effort with the Defense/Space industry is the systematic definition of projects – the project
breakdown structure (PBS)2. It is through the PBS that we can create a skeleton or framework, specifically adapted to each project, which fulfills the same
fundamental purpose (from the MIS viewpoint) as the organization structure. This concept of a structured, systematic subdivision of projects enables the development of truly integrative PMIS, just as the organization structure has enabled the
development of organizational MIS. It is impossible to budget and control the work of a large company without subdividing it into divisions, departments and sections; similarly it is impossible to plan, budget, schedule and control a large project
without subdividing it into manageable tasks. We must also be able, in both. cases, to summarize information at successively higher levels, and identify deviations from plan on an exception basis. The PBS provides this capability for PMIS.
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Business process
A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. There are three types of business processes:
1. Management processes, the processes that govern the operation of a
system. Typical management processes include "Corporate Governance" and "Strategic Management".
2. Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Marketing and Sales.
3. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Technical support.
A business process begins with a customer’s need and ends with a customer’s need fulfillment. Process oriented organizations break down the barriers of structural departments and try to avoid functional silos.
A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level.
Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).
Business Processes can be modeled through a large number of methods and techniques. For instance, the Business Process Modeling Notation is a Business Process Modeling technique that can be used for drawing business processes in a workflow.
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The existing system in the organization is totally reexamined and radically modified for incorporating the latest technology. This process of change for the betterment of the organization is called as Business process reengineering.
With Business process being reengineered, the organizations have to change the workflow and business procedures for efficiency in the organization. Latest software is used and accordingly the business procedures are modified, so that documents are worked upon more easily and efficiently. This is called as
workflow management.
Business process reengineering is a major innovation changing the way organizations conduct their business. Such changes are often necessary for profitability or even survival. BPR is employed when major IT projects such as ERP are undertaken. Reengineering involves changes in structure, organizational culture and processes. Many concepts of BPR changes organizational structure. Team based organization, mass customization, empowerment and telecommuting are some of the examples. The support system in any organization plays a
important role in BPR. ES, DSS, AI (discussed later) allows business to be conducted in different locations, provides flexibility in manufacturing permits quicker delivery to customers and supports rapid paperless transactions among suppliers, manufacturers and retailers. Expert systems can enable organizational changes by providing expertise to non experts. It is difficult to carry out BPR calculations using ordinary programs like spreadsheets etc. Experts make use of applications with simulations tools for BPR.
Reengineering is basically done to achieve cost reduction, increase in quality, improvement in speed and service. BPR enable a company to become more competitive in the market. Employees work in team comprising of managers and engineers to develop a product. This leads to the formation of interdisciplinary teams which can work better than mere functional teams. The coordination becomes easier and faster results can be achieved. The entire business process of
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developing a product gets a new dimension. This has led to reengineering of many old functional processes in organizations.
BPR – the current focus
Apart from the usual ways of managing a process in any business information system, it is necessary to enhance the value of the process and also the methods used in improving the process. Some of the concepts of information management for effective information systems are the traditional concept of database, the emerging concepts of data mining and data warehousing.
Concept of Database – Database is a data structure used to store organized
information.
A database is typically made up of many linked tables of rows and columns. For example, a company might use a database to store information about their
products, their employees, and financial information. Databases are now also used in nearly all ecommerce sites to store product inventory and customer information. Database software, such as Microsoft Access, FileMaker Pro, and MySQL is designed to help companies and individuals organize large amounts of information in a way where the data can be easily searched, sorted, and updated.
Data Mining - Data mining is primarily used as a part of information system
today, by companies with a strong consumer focus retail, financial,
communication, and marketing organizations. It enables these companies to
determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data. With data mining, a retailer could use point of sale records of customer purchases to send targeted
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promotions based on an individual's purchase history. By mining demographic data from comment or warranty cards, the retailer could develop products and
promotions to appeal to specific customer segments.
Data Warehousing – A data warehouse is a copy of transaction data specifically
structured for querying and reporting. The main output from data warehouse systems are either tabular listings (queries) with minimal formatting or highly formatted "formal" reports on business activities. This becomes a convenient way to handle the information being generated by various processes. Data warehouse is an archive of information collected from wide multiple sources, stored under a unified scheme, at a single site. This data is stored for a long time permitting the user an access to archived data for years. The data stored and the subsequent report generated out of a querying process enables decision making quickly. This concept is useful for big companies having plenty of data on their business processes. Big companies have bigger problems and complex problems. Decision makers require access to information from all sources. Setting up queries on individual processes may be tedious and inefficient. Data warehouse may be considered under such situations.
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Components of Information Systems
An information system has the following components: 1. Hardware ( machines and media)
2. Software (program and procedures) 3. Data ( data and knowledge)
4. Network ( communication Media) 5. People ( end user and specialists)
All five components and arranged and interrelated to perform input, process, output, feedback and control that converts data resources into information. The figure shows interrelation between these components
From the figure it can be concluded that:
1. Five basic operating elements of Information system are: a. Hardware
b. Software c. Databases d. Network
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e. People
2. Hardware includes processor, I/O devices, operating system and media devices. Software includes programs and procedures. Databases includes data and knowledge base. Network includes communication media and network devices. People includes operating Personal and System specialists. 3. Database are processed to get the desired information for end user.
4. Information processing consists of input, process, output, data storage and control.
a. INPUT – Data and instruction
b. Process – Maintain master files, reports, process inquiries, interactive dialogues
c. OUTPUT – Transaction documents and screen reports. Information System Resources
Any information system model has five major resources. Basic concepts of resources and their roles in a system are discussed here.
Hardware Resources
Hardware resources comprises the physical aspect of information system. The term hardware is generally associated with computers but it also includes peripherals or data media ( storage devices). Today even the smallest firms, as well as many households, own or lease computers. These are usually microcomputers, also called personal computers. Large organizations typically employ multiple computer systems, from a few powerful mainframe machines (or even more powerful supercomputers) and minicomputers to widely deployed personal
computers. Together with computer peripheral equipment, such as magnetic disks, input-output devices, and telecommunications gear, these constitute the hardware of information systems. The cost of hardware has steadily and rapidly decreased, while processing speed and storage capacity have increased vastly.
1) Computer systems
a. A modern computer system can be considered as a system with four main subsystem: inputs, processing, storage and output.
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b. Input to a computer is achieved through variety of input devices. Special devices are used depending on type of data being captured. Computers are now able to capture data from multipLe media: Character based data, sound, images, graphics and movements. c. Processing subsystems is known as the Central Processing Unit
(CPU). The Central Processing Unit can be subdivided into following components: Control Unit, Logic unit, Primary storage, Registers. d. Storage subsystem is used to store the processed data. Data is stored
in the storage system for term or long-term use. Data for short-term use is stored in primary storage. Data for long-short-term is used in secondary storage.
e. Output from computer is achieved through a variety of output devices. Typical output devices include sound based output devices, image based and graphics-based output devices.
f. Major types of computer systems are personal computers, mini-computers, mainframe computers.
2) Computer Peripherals:
Computer peripherals are devices other than Computer. Computer
peripherals can be any input devices, output device or storage device. e.g. keyboard. mouse, monitor, printer, magnetic or optical disks.
Software Resources
The term software is generally used to describe computer programs. A program is a sequence of instructions given to a computer. Programs must be written in some formal language known as programming language. All software are essentially programs. Computer software falls into two broad classes: system software and application software. The principal system software is known as the operating system. It manages the hardware, files, and other system resources and provides a systematic and consistent means for controlling the computer, most commonly via a graphical user interface (GUI). Application software is programs designed to handle specialized tasks; many of these programs are sold as ready-to-use packages. Examples include general-purpose spreadsheet and word processing programs, as well as ―vertical‖ applications that serve a specific industry
segment—for instance, an application that schedules, routes, and tracks package deliveries. Larger firms often develop their own application software or customize
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existing packages to meet specific needs. Some companies, known as application service providers (ASPs), have begun to rent specialized application software on a per-use basis over the Web.
Types of Software:
Three major levels of software are - system software, communication software and application software. This forms the software architecture at some information system.
A. System Software:
a. System software refers to that collection of programs which co-ordinate .ie activities at hardware and all programs running on the computer system. System software acts as an interlace between application software and hardware.
b. One most important type of system software is the operating system. This is the piece of software that supervises the running of all other programs on some hardware. The operating system undertakes tasks such as scheduling the running of programs, controlling input and output to programs also managing files on secondary storage. B. Communication Software:
a. This is special type of software used to enable intercommunication between different computing devices in a network.
C. Application Software:
a. Software application or application system is normally written using some language or tool set and designed to perform a particular set at tasks for some oganization.
b. Application software can be distinguished in terms of the number of people that use of software:
i. Personal productivity Software: This is a software that is designed for individual use e.g. word processing package. ii. Workgroup Software (Groupware): This software is designed to
be used across the major part of the organization or the entire enterprise e.g. accounting software, enterprise resource
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Databases
Databases are most important component of information system. Data is the basic raw material for information system. Data has to he represented in specific manner (data structuring) for storage and manipulation by Computer hardware and
software also for transmission by communication network. Effective data structuring will benefit all end users in organization. Various forms of data are alphanumeric data, text data, image data, audio data. Many information systems are primarily delivery vehicles for databases. A database is a collection of
interrelated data (records) organized so that individual records or groups of records can be retrieved that satisfy various criteria. Typical examples of databases include employee records and product catalogs. Particularly valuable are customer
databases that can be ―mined‖ for information in order to design and market new products more effectively. Anyone who has ever purchased something with a
credit card—in person, by mail order, or over the Web—is included within some of the numerous customer databases.
Network Resources
A network is any set of Computer systems joined by some communications technology, networks can be described in terms of their technology and coverage e.g. LAN, WAN, MAN and ring, star, bus networks. Telecommunications network provide the telecommunication structure used to transmit data from one site to another. Telecommunications network consists of computers, processors, switches, transmission media and communication software.
Telecommunications are used to connect, or network, computer systems and transmit information. Various computer network configurations are possible, depending on the needs of an organization. Local area networks (LANs) join computers at a particular site, such as an office building or an academic campus. Wide area networks (WANs) connect machines located at different sites, and often within different organizations. The Internet is a network of networks, connecting millions of computers located on every continent. Through networking, personal computer users gain access to information resources, such as large databases, and
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to human resources, such as coworkers and people who share their professional or private interests.
Typically used communications networks are Internet, intranet and extranets. Network resources may be classified into two segments.
(I) Communication Media (ii) Network Support
A. Communication Media:
Various telecommunication media can be employed for transmission of data in communication networks: twisted pair cable, co-axial cable, fiber optic cable, microwave transmission, infrared transmission. A telecommunication device is a hardware set that allows electronic communication to occur. Various types of telecommunication devices are used in communication networks, for example, modems,
multiplexers, front end processors. B. Network Support:
Network support includes all resources that support the operation and use of communication networks e.g. people (end user specialists) hardware (Computer, modem, processor), software (control software, operating system software).
People Resources
For proper operation of information system people resources are required. These people may be end user or information system specialists. Qualified people are a vital component of any information system. Technical personnel include
development and operations managers, systems analysts and designers, computer programmers, and computer operators. In addition, workers in an organization must be trained to utilize the capabilities of information systems. Hundreds of millions of people around the world are learning about information systems as they use the Web.
Procedures for using, operating, and maintaining an information system are part of its documentation. For example, procedures need to be established to run a payroll
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program, including when to run it, who is authorized to run it, and who has access to the output.
A. End-user:
End users are people who uses information system. Information system user may be any professional like engineer, doctor, salesman, accountant or shopkeeper also an individual. End user are also called as clients.
B. SystemSpecialists:
System specialists are people who develop and operate information systems. Information system specialists include system analysts programmers and administrators. System analysts! specialists must design the information as per the requirements of end-user. The information products should fulfill the need of end-users.
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