NEED OF INFORMATION

Management Information System (MIS) can be defined,

according to Joel E. Ross, as a communication process
where in information (input) is recorded, stored,
processed and retrieved for decisions (output) regarding
the managerial process of planning, organizing and
controlling. Agency management system can help MIS to
be implemented effectively with sfa software and crm
software.

If we now define decision-making as the process of

selecting from alternatives a course of action to achieve
an objective, the link between information and decision
becomes clear. Indeed, decision-making and information
processing are so inter-dependent that they become
inseparable, if not identical, in practice.

Computerized MIS cannot technically make a decision but

it can yield processed data and follow instructions to the
extent of its capacity. For example, the computer can be
properly instructed to compare inventory levels with
programmed decision-rules on re-order level and re-
order quantity, and generate purchase, requisition,
purchase enquiry and purchase order. This can resemble
an automatic control of purchase documents.

Information processing beyond doubt is the dominant

industry of the present century. Following factors states
few common factors that reflect on the needs and
objectives of the information processing −
  Increasing impact of information processing for
organizational decision making.
 Dependency of services sector including banking,
financial organization, health care, entertainment,
tourism and travel, education and numerous others
on information.
 Changing employment scene world over, shifting
base from manual agricultural to machine-based
manufacturing and other industry related jobs.
 Information revolution and the overall development
scenario.
 Growth of IT industry and its strategic importance.
 Strong growth of information services fuelled by
increasing competition and reduced product life
cycle.
 Need for sustainable development and quality life.
 Improvement in communication and transportation
brought in by use of information processing.
 Use of information processing in reduction of energy
consumption, reduction in pollution and a better
ecological balance in future.
 Use of information processing in land record
managements, legal delivery system, educational
institutions, natural resource planning, customer
relation management and so on.
In a nutshell −
 Information is needed to survive in the modern
competitive world.
  Information is needed to create strong information
systems and keep these systems up to date.

Implications of Information in Business

Information processing has transformed our society in

numerous ways. From a business perspective, there has
been a huge shift towards increasingly automated
business processes and communication. Access to
information and capability of information processing has
helped in achieving greater efficiency in accounting and
other business processes.
A complete business information system, accomplishes
the following functionalities −
 Collection and storage of data.
 Transform these data into business information
useful for decision making.
 Provide controls to safeguard data.
 Automate and streamline reporting.
The following list summarizes the five main uses of
information by businesses and other organizations −
 Planning − At the planning stage, information is the
most important ingredient in decision making.
Information at planning stage includes that of
business resources, assets, liabilities, plants and
machineries, properties, suppliers, customers,
competitors, market and market dynamics, fiscal
policy changes of the Government, emerging
technologies, etc.
  Recording − Business processing these days
involves recording information about each
transaction or event. This information collected,
stored and updated regularly at the operational
level.
 Controlling − A business need to set up an
information filter, so that only filtered data is
presented to the middle and top management. This
ensures efficiency at the operational level and
effectiveness at the tactical and strategic level.
 Measuring − A business measures its performance
metrics by collecting and analyzing sales data, cost
of manufacturing, and profit earned.
 Decision-making − MIS is primarily concerned with
managerial decision-making, theory of
organizational behavior, and underlying human
behavior in organizational context. Decision-making
information includes the socio-economic impact of
competition, globalization, democratization, and the
effects of all these factors on an organizational
structure.

In short, this multi-dimensional information evolves from

the following logical foundations −
 Operations research and management science
 Theory of organizational behavior
 Computer science −
o Data and file structure
o Data theory design and implementation
 o Computer networking
o Expert systems and artificial intelligence
 Information theory
Following factors arising as an outcome of information
processing help speed up of business events and
achieves greater efficiency −
 Directly and immediate linkage to the system
 Faster communication of an order
 Electronic transfer of funds for faster payment
 Electronically solicited pricing (helps in determining
the best price)

MIS Need for Information Systems

Managers make decisions. Decision-making generally

takes a four-fold path −
 Understanding the need for decision or the
opportunity,
 Preparing alternative course of actions,
 Evaluating all alternative course of actions,
 Deciding the right path for implementation.

MIS is an information system that provides information

in the form of standardized reports and displays for the
managers. MIS is a broad class of information systems
designed to provide information needed for effective
decision making.
Data and information created from an accounting
information system and the reports generated thereon
are used to provide accurate, timely and relevant
information needed for effective decision making by
managers.
Management information systems provide information to
support management decision making, with the following
goals −
 Pre-specified and preplanned reporting to managers.
 Interactive and ad-hoc support for decision making.
 Critical information for top management.
MIS is of vital importance to any organization, because −
 It emphasizes on the management decision making,
not only processing of data generated by business
operations.
 It emphasizes on the systems framework that should
be used for organizing information systems
applications.

The following are some of the justifications for having an

MIS system

 Decision makers need information to make

effective decisions. Management Information
Systems (MIS) make this possible.
 MIS systems facilitate communication within
and outside the organization – employees within
the organization are able to easily access the
required information for the day to day operations.
Facilitates such as Short Message Service (SMS) &
 Email make it possible to communicate with
customers and suppliers from within the MIS system
that an organization is using.

 Record keeping – management information

systems record all business transactions of an
organization and provide a reference point for the
transactions.

Information and the MIS concept

Information is a set of classified and interpreted data

used in decision making. It has also been defined as
'some tangible or intangible entity which serves to reduce
uncertainty about future state or events' (Lucas, 1978). A
management information system (MIS) is 'an integrated
user-machine system for providing information to support
operations, management and decision making functions
in an organization. The system utilizes computers,
manual procedures, models for analysis, planning, control
and decision making, and a database' (Davis and Olson,
1984). MIS facilitates managerial functioning.
Management information is an important input at every
level in the organization for decision making, planning,
organizing, implementing, and monitoring and
controlling. MIS is valuable because of its content, form
and timing of presentation. In the context of different
levels of decision making, information can be described
as:

· source,
· data,

· inferences and predictions drawn from data,

· value and choices (evaluation of inferences with regard

to the objectives and then choosing a course of action),
and

· action which involves course of action.

A first step in designing and developing an MIS is to

assess the information needs for decision making of
management at different hierarchical levels, so that the
requisite information can be made available in both
timely and usable form to the people who need it. Such
assessment of information needs is usually based on
personality, positions, levels and functions of
management. These determine the various levels of
information requirements.
Organizational structural implications for information
systems:-

Concept Implications for Information

Systems
Hierarchy of A tall hierarchy with narrow span of
authority control requires more formal control
information at upper levels than a flat
hierarchy with wide span of control.
Specialization Information system applications have
to fit the specialization of the
organization.
Formalization Information systems are a major
method for increasing formalization.
Centralization Information systems can be designed
to suit any level of centralization.
Modification of Information systems can be designed
basic model to support product or service
organizations, project organizations,
lateral relations and matrix
organizations.
Information Organizational mechanisms reduce the
model of need for information processing and
organization communication. Vertical information
systems are an alternative to lateral
relations. Information systems are
used to coordinate lateral activities.
Organizational Organizational culture affects
culture information requirements and system
acceptance.
Organizational Organizational power affects
power organizational behaviour during
information system planning, resource
allocation and implementation.
Computer systems can be an
instrument of organizational power
through access to information.
Organizational The information system may need to
growth change at different stages of growth.
Goal When identifying goals during
displacement requirements determination, care
should be taken to avoid displaced
goals.
Organizational Suggests need for information system
learning design for efficiency measures to
promote single loop learning and
effectiveness measures for double loop
learning.
Project model of Describes general concepts for
organizational managing change with information
change system projects.
Case for stable Establish control over frequency of
system information system changes.
Systems that Reporting critical change variables,
promote organizational change, or
organizational relationships, and use of multiple
change channels in a semi-confusing system
may be useful for promoting responses
to a changing environment.
Organizations as Provides approach to requirements
socio-technical determination and job design when
systems both social and technical
considerations are involved.
LEVELS OF INFORMATION HANDLING

The common thread of activity in all the management functions

is information management. Every manager today has to manage loads
of information some for the purpose of reporting and some for taking actionable
decisions. A marketing manager trying to fine-tune a sales strategy would be doing it
only after analyzing a lot of relevant information about the market, the customer profile,
the product profile and competitor‟s pricing strategy.
Similarly, a human resource manager trying to recruit someone for the organization
would do a lot of information analysis regarding the job profile, suitability of the
candidate for the job, the job market dynamics, etc. The competitive environment that
exists in today‟s time makes this task of management even more challenging.
Decisions have to be taken very fast and after analyzing a lot of data.
It is precisely due to these reasons8 that more and more information technology (IT)
intervention is being used in modern management functions. However, Information
management using technology has itself transformed dramatically over the years. From
being just a support function it has become a key resource for gaining competitive
advantage.
More and more corporations are investing in acquiring the latest management
information system tools like enterprise (wide) resource planning (ERP), customer
relationship management (CRM), knowledge management (KM), decision support
system (055), business intelligence (81) suites data warehouse (OW) facility as they
are convinced of the benefits of such huge investments.

Information Needs for the Different Levels of Management

Even though the broad objectives of management as an entity may be same, like
increasing shareholder value, it is by no means a monolithic entity. As has already
been discussed, there are different levels of management and each performs its
specific purpose. The top level deals with strategy, the middle level with tactical issues
and the bottom level with operational issues. The top level that deals with strategy will
be taking strategic decisions, middle level will take tactical decisions and entry level will
take operational decisions. Now in order to take such decisions, contextual information
will need to be provided.

Levels of Problems handled/ decisions Type of information required

Management made

Top level Unstructured problems. Strategic information from within the

organization and outside.
Middle level Decisions are based on
 situations not/rarely handled in Information about likely scenarios.
the past. Information that can be analyzed in
different ways.
Decision-making variable not
clearly defined. Exception reports
Semi structured/structured Regular summarized reports.
problems.
Information that can be drilled
Operational Decisions on regular issues. deeper for insight.
level
Decisions on tactical issues. Information to help find out
exceptions so that they can be
Structured problems
reported to top management
Structured decision-making
Operational information
Decision-making on the basis
Rule based information, guidelines,
of set rules
handbook level information

A manager at the top level who is deciding on the location of a new factory of the
organization has strategic consideration like the labor costs of the location, proximity of
the location to the market and long-term growth prospects in mind. He/she is not
bothered about the shop floor level operational details like the reason for absence of a
worker. He/she will have a strategic view and would need only such information that
helps him to take correct decisions. Information is only a resource to him if it can help
him to improve the quality of his strategic decision-making. Similarly for other tiers,
information is only a resource if one can derive value from it.

Information Management

The business of information which is today a multibillion dollar industry first started
when a firm called Bloomberg started compiling important information about US
companies and their balance sheets and selling them to stock brokers. This was the
first open trade in information as a resource in modern times. From then on,
information (external) has been regarded as a resource that is traded10 sometimes
freely and openly as in published literature and sometimes clandestinely in the form of
corporate intelligence reports. Also, internal information is seen as equally valuable
and every effort is made to derive more value from it and to ensure that this internal
information does not find its way outside the organization.
The idea of information management is based on the fundamental premise that
information is a resource that is valuable for an organization. The entire subject of
information management is about how to derive more and more value from this
precious resource. However, unlike most other resources that have to be procured
from the outside environment, most information resource is available within the
organization if an effort has been made for its safekeeping. Detailed logs of
transactions of an organization with its external and internal customers over a period
mostly form the basic ingredient of a good quality information resource. This basic
information repository is then drilled and analyzed for actionable information, this is one
aspect of information management in which strategies are used to derive greater value
from the internal repository of data and information. The other aspect of information
management is to ensure that this internal information is not „leaked‟ to the outside
world of competitors.
There are four levels of computerised information handling. These are:

In a modern complex organisation, the levels of information handling can be divided

as decision support system, management information system, transaction
processing system, and office (and other) automation system.

At the apex, the top level managers may need decision support system (DSS).
This would be an inter-active system that provides the user-manager with easy access to
decision models and data in order to support semi-structured and non-structured
decision-making tasks. Inputs for DSS can be some processed data, and
mostly management-originated data along with some unique models. The DSS would
involve queries and responses, operations research models, and simulation. The output
from DSS would be special reports to resolve difficult questions and replies
to management queries.

At the middle management level (if there exists one), MIS would deal with an
organised set of procedures to provide information for middle managers to support their
operations and decision-making within the organisation. At this level, inputs for MIS
would be both processed and raw-data and some management-originated data, along
with pre-programmed models. The MIS process would involve report generation
data management, simple models and statistical methods. The outputs from MIS would
be filtered and screened for semi-routine decisions and replies to
simple management queries.

At the shop-floor management level, transaction processing system (TPS) is a

computer-based system that would capture, classify, store, maintain, update and
retrieve simple transaction data for record keeping and for feeding MIS and DSS. The
TPS would have transaction data as inputs. The processing for TPS would involve
classification, codification, sorting, merging, adding, deleting and updating. Outputs for
TPS would be detailed reports relating to routine decisions and processed data.

At the clerical level, office and other automation control system can be in
operation. Office automation system (OAS) is simple in an automated office having
multiple functions, where the integrated and computer-aided system allows many
office activities to be performed with electronic equipment. The OAS would have inputs
such as appointments, documents, addresses, etc. The OAS processing would be
scheduling word-processor, data storage and retrieval.

When developing an information management strategy within an organisation, it is

useful to consider information needs on three levels:
  corporate
 team, division, business unit, etc
 individual

The needs of each of these three levels must be met if a coordinated and effective
solution is to be maintained in the long-term. Failure to address any one of the levels
will lead to areas of the business or individuals finding their own solution, which may
not fit well within the strategic goals of the organisation.

Corporate
At the top is the corporate information that is useful for the whole organisation. This
‘global’ information is generally fairly well addressed by the corporate intranet (even
if the intranet itself needs improvement).Examples of corporate information include
policies and procedures, HR information, online forms, phone directory, etc.
Interestingly, there may be a limited amount of truly global information, and it may
not deliver the greatest (measurable) business benefits.

Team, division, business unit

The middle level is perhaps the most interesting, as it covers all the information
shared within teams, divisions, business units, etc. This information may be critical to
the day-to-day activities of the group, but of little interest to the rest of the
organisation. Examples include project documentation, business unit specific content,
meeting minutes, etc. This level is generally poorly-served within organisations,
although collaboration tools are increasingly being used to address team information
needs. It is also being recognised that it is this ‘local’ information that may be the
most valuable, in terms of driving the day-to-day activity of the organization.

Individual
At the lowest level is the personal information needs of staff throughout the
organisation. Examples include correspondence (both internal and external), reports
and spreadsheets.

In most organisations, staff must struggle with using e-mail to meet their information
management needs. While staff generally recognise the inadequacy of e-mail, they
have few other approaches or technologies at their disposal.
Note that some organisations (such as consulting firms) are heavily dependent on
personal information management amongst their staff.

Managing the levels

When managing the information within each of the three levels, consider the
following:

 An information management solution must be provided for staff at each of the

three levels.
 If corporate solutions aren’t provided, then staff will find their own solutions. This
is the source of poor-quality intranet sub-sites, and other undesirable
approaches.
 A clear policy must be developed, outlining when each of the three levels
applies, and how information should be managed within each level.
 Processes must be put in place to ‘bubble up’ or ‘promote’ information from
lower levels up to higher levels. For example, some team-generated information
will be critical for the whole organisation.
 As much as possible, a seamless information management environment should
be delivered that covers all three levels.

ADVANTAGES OF COMPUTERIZATION

Advantages of computerized information

systems are:-
 Data standardization and accuracy.
  Improved analytical capabilities. Analyses not manually
practical, can be easily done by a computer Graphs and Charts
also available.
 Cost savings by increasing employee productivity, decreasing
manpower etc.
 Ready availability of data and ready reproduction (printed
copy) of the stored data.
 Elimination of monotonous or exhaustive manual labor.
 No need to keep duplicate records (copies).Reducing files and
their storing Space.
 Improved communication with neat, clean and correct copies
Electronic mail systems can facilitate communication within
and between hide facilities and within short time.

One of the most important advantages of a computerized system is it saves

time for businesses. Other advantages include automation, accuracy, cost-
effectiveness and easy data access. In addition, computerized systems are
secure, have high speed, are scalable and reliable. Computerized systems
involve making use of computer programs and software to record, store and
analyze data.
A computerized system is a computer system with a purpose. An example
includes a computerized accounting system. An accounting system is a
collection of processes, procedures and controls designed to collect, record,
classify and summarize financial data for purposes of interpretation and
informed management decision-making.

Computerized systems are automated, and calculations are handled by

software, eliminating possible errors and saving time. For instance, automatic
processing of invoices makes accounting less time-consuming. Computerized
systems are designed for accuracy to the smallest detail. Once the data is
entered into the system, calculations for functions such as payroll and billing
are performed quickly and efficiently by accounting software programs.

Computerized systems make it easier for different individuals to access data

even outside the office. One can access accounting records quickly without
having to sift through stacks of papers. Accuracy of calculations of
computerized system ensures reliability of financial statements prepared by
computers. Computerized systems store data in off-site locations, ensuring
safety from natural and man-made disasters such as fires.

The main advantages of computerizing the activities of business

organization are as follows:

1. Speed: Computerisation helps in processing the data placed in several

data files in no time. This is possible due to the high speed of computers for
processing data and CPU of the computer works at the speed of electricity
which is the highest ever attainable speed.

2. Accuracy: The data processed by the computer are highly accurate. The
programs written on the system checks and controls data before and during
processing. It detects invalid data and ensures high degree of accuracy and
reliability of output reports.

3. Flexibility: The modern digital computers can be used for a variety of

purposes. E. g. online processing, multiprogramming etc.

4. Choice of Configuration: Wide ranges of peripherals are available for

many computer systems, which allow business organization to select those
which most suit its processing requirements.
5. Storage capacity: Large volumes of data can be conveniently stored,
accessed and altered.

6. Management information: They can be used to provide useful information

of management for control and decision making.

7. Data Processing: Computer has lifted the heavy data processing

constraint with the manual system and has opened up new avenues for
planning, control and data experimentation.

8. Volume: Computers can store volumes of data and can retrieve the
desired information quickly. This is very useful in the areas like insurance,
bank accounts etc where large number of documents is handled every day.

9. Database: Computer facilities the establishment of database. Such a

database integrates data records and reduces data redundancy.

10. Reduction in paper work: The use of computers for data processing has
helped the management of business organizations to cope with increasing
problem of paper handling. The computers have speeded up the process
and have eliminated the paper needs through the storage of data in
elaborately constructed data bases and files.

11. Reduced cost: Though the initial investment for installing a computer is
high, but it substantially reduces the cost of each of its transaction. Cost
reduction occurs due to processing of huge data and record keeping.

12. Facilitates report preparation: Computer facilitates the preparation of

various types of reports required by organizational executives for the
purpose of decision making and control.
13. Reduce the space requirements: The use of computer for office activities
reduces the requirements of office space which therwise is required.

14. Reduces the manpower requirement: The number of persons required

for performing various organizational activities will be reduced by using a
computer system.

15. Increased ability to perform computations: Computers perform

computations with a very high speed.

16. Diligence: Being a machine, it does not suffer from boredom, tiredness
or lack of concentration, even if millions of computations are to be
performed by a computer. It performs the calculations with same accuracy
and speed.
USE OF COMPUTERS FOR MANAGERIAL OPERATIONS

Computers play a central role in a business‟s management information

system, or MIS. In past decades, most companies had a few computers
that served as information hubs. Today, a range of computing devices
funnel important data from a variety of sources, from sales to time cards
to inventory. The MIS software gathers the data and generates actionable
information to guide the business.

MIS and Computers

In general, an MIS provides timely information to help managers make sound
business decisions, such as when to replenish inventory, when to offer deals to
customers and how to forecast sales for the coming quarter. Though some small
businesses can get away with pen and paper, the great majority of MIS systems use
computers to process large amounts of data quickly.

Guiding the Business

Business doesn‟t stand still. Internal and external circumstances change daily, and
you need a road map of good information to guide you through the twists and turns.
The whole purpose of MIS is to use the hard data of your business to inform day-to-
day and long-term decisions. Computers ease the task of processing the data.

Capturing the Data

The most sophisticated computers in the world can‟t help your business if they‟re not
“fed”. Before an MIS can provide useful information, data must first enter the system.

Sales and accounting systems, for example, typically capture data when a customer
places an order. Workers on the factory floor can enter manufacturing data into tablets
or PCs, or the production machines themselves can capture data automatically. These
detailed, nuts-and-bolts numbers are the raw materials that eventually become useful
management information.

Calculating, Sorting and Searching

Modern computers excel at repetitive number crunching, accurately processing many
thousands of data items per second. To summarize a month‟s business transactions
by hand might take hours or days, while a computer can do this task in moments.
Useful operations include arithmetic calculations, sorting data numerically or
alphabetically and searching for a single record among thousands in a file.

Database Management Systems

Many MIS systems rely on database management systems to organize, process and
protect data. The database is a special program that acts as a data warehouse,
storing the raw data and also cataloging it. The database has levels of security to
guard against unauthorized access. It gives the various MIS applications —
accounting, payroll, inventory management and others — added efficiency, reliability
and flexibility.

Reports for Managers

An MIS delivers information to managers in the form of reports. They may take many
forms, including printed lists, informative screens or alerts by text or email. Generally,
reports may have details, listing individual records sorted by date or other criteria, and
summary figures that show totals and averages.

For example, a monthly sales report shows customer names and what they bought.
The MIS may generate the reports on demand, on a schedule or when preset
conditions are met.

Ad Hoc Reporting
Many of the reports in an MIS system are “canned”, as software developers wrote the
specifications when the system was first created. Ad hoc (improvised) reports are also
possible. In this instance, you can use database software to create a custom report.

For example, in a certain month, an item you make may have been painted the wrong
color. An ad hoc report can pull useful information from the MIS, such as who bought
the item and when or which production machine made the item. The manager may
create the report herself from a menu-driven reporting system, or she may ask a data
technician to do it for her.

Computer Storage and Big Data

With the falling price of computer hard drives, it‟s now possible to store enormous
amounts of information cheaply. Even small businesses can afford to keep reams of
detailed records on hand and use them to study customer buying patterns, production
quality statistics and the actions of competitors.
Garbage In, Garbage Out
With tongue in cheek, computer professionals use the term “garbage in, garbage out”
to sum up how errors in data or mistakes in programming can lead to disastrous
outcomes. Because computers deal with large amounts of information, it‟s possible
that small arithmetic errors, for example, may give wildly incorrect results. Savvy
businesspeople must be aware of the potential pitfalls of relying too much on
computerized reports.

In virtually every business, a computer is an essential tool for running the day-to-day
operations, enhancing productivity and communicating with customers, suppliers and the
public. Managers use computers for a variety of reasons, including keeping their teams on
track, budgeting and planning projects, monitoring inventory and preparing documents,
proposals and presentations. Managers need to understand not only the basic functions of the
corporate software tools used in the office but also the Internet and other external computing
tools that can improve the way they manage their departments.

Business Planning
Business planning can take up a lot of a manager's time, but computer programs
make it easier. From using email programs like Outlook or Google Mail to set
appointments, tasks and deadlines to using financial tools to develop budgets and
project proposals, using computers to plan the day-to-day activities of a business is
essential. Managers also use the Internet to research their industries, the competition
and to look for ideas to help them create plans to engage customers, win more
business and succeed in the competitive world of business.

Record Keeping
Managers keep track of a lot of information that is vital to the company's success.
From customer records to financial records to employee records, the data a company
has to store are seemingly endless. Using computers to store and manage
documents, files and records reduces the amount of physical storage a company
needs and also allows managers to have easy access to their files using simple
document search methods. Additionally, by keeping records, managers can easily
share information about an employee's history and job performance with other
managers in the company.

Communication
One of the most common uses for computers in business is communication.
Communication is essential not only between employees but with customers as well.
Many customer service departments use computers to log service issues and make a
record of their resolutions. Using email and instant messaging programs allows
employees to gather information from one another that they need to complete their
jobs. It also allows managers to delegate work tasks and follow up on projects.

Document Preparation
For creating spreadsheets, presentations, memos and other corporate documents,
computers are essential in business. Managers need to have a basic understanding of
common workplace productivity software such as Microsoft Office, but specialized
industries such as advertising and marketing also require managers to work with more
advanced programs like Adobe Photoshop and Illustrator to create visual materials for
clients.
NETWORK AND VIRTUAL ORGANIZATIONS

There is a lot of pressure on small and medium sized companies to

become virtual organizations in contemporary business environment

because it is changing at rapid rate. The unstable, dynamic environment

in present situation causes recurrent changes of organizational structures

and results in companies continually seeking the optimal model of the

organizational arrangement. Consequently, it is essential for the

companies to develop appropriate organizational structure and

information network, which focuses on all information and resources

critical for strategic and operational decisions. Companies are moving

away from hierarchies to networks and from centralized to decentralized

structures. Many management scholars, like Vetschera (1997) denoted to

"VO" and "NO'' as synonym to the same type of organization. NO,

sometimes called collaborative NO (Tramontin Jr., 2010; Camarinha-

Matos et al, 2009), networked company (Bednar and Godkin, 2009),

networked firm (Child, 1997), networked corporation (Smirch and

Morgan, 1982), networked enterprises (Castells, 1996) and VO,

sometimes called virtual enterprise (Martins et al, 2004), virtual firm

(Mikolas and Wozniakova, 2009), are two of separate possible

innovative solutions to the task arising to modern management setup.

Network organizations are basically described as small and medium-

sized companies that manage themselves and converse and harmonize

their work through face-to-face communication, telephone, post and fax.

The concept of a network means nodes and links. The nodes can be

people, teams or even organizations networks operate at many levels.

Some examples are distributed geographic teams in large organizations,

or small organizations operating as networks to compete against large

corporations. The links are the various coordination and "agreement"

mechanisms (Hastings, 1993). Jacobsen and Thorsvik (1998) stated that

many organizations are less self-supporting of resources and must

collaborate with other companies to accomplish their objectives. The

capability to create a network by collaboration organization is need for

companies to gain competition advantage. A network organization

recognizes an individual's place in the organizational hierarchy. Formal

communication assists descending transmission of orders and increasing

transmission of information. Work rotates around a particular job

description that takes place in a particular space, such as office in a

particular building, street, town or state. The reward system is based on

permanence. Dalsgaard and Bendix (1998) said that within all forms of

network, people can't spare, in good or bad, mutual contact since they

are dependent of each other. In management literature NO is described

as an organization, or organizational field, all of whose members are

connected to a single electronic network through which they

communicate (sometimes on non-work affairs) and by means of which

they access or provide information(Sproull and Kiesler, 1991). These

organizations have communication rich environments, with information

flows blurring traditional intra-company boundaries (Rockart and Short,

1991). Their communication structures are based on electronic networks

where information flows flexibly and spans groups and organizational

boundaries (Miles and Snow 1992). Network organizations have a

computer-mediated communication system expanded by acquisition and

then reformed in integrated conjunction with its neighbors in other

countries. (Lea, 1995).Rockart and Short (1991) exemplify a network

organization by shared properties, goals, expertise, work, decision

making, prioritization of timing and issues, responsibility, accountability

and trust, recognition and reward.

Characteristics of network
organization

The network characterizes a flexible structure that permits companies to

survive in competitive environment. It develops relationships of co-

operation among the new associates. Within the network structure the

borders between structural parts are not as direct as in other forms of

organizational structures. However, the process receives additional

impulses through shared use of the information infrastructure and

information networks, which are the common property of the network.

Virtual organizations have importance in business world because there

are numerous challenges for doing business for the management of work

processes and practices such as new products, the globalization and

internalization of businesses. The development of the Information and

Communication Technology (ICT) facilitated a decentralization of work

and created pressures for new organizational structures and job contents.

Future mobile and wireless technologies will transform the working life

entirely by increasing possibilities to work whenever in any place. It is

apparent that organizations in both the private and public sector have to

transform themselves to completely exploit these new technologies in

order to survive in the temporally compacted world. Such factors led to

emergence of the number of virtual organizations. The globalization of

economies and businesses augments the number of enterprises without

boundaries, creating multi-site working in cross-cultural contexts. To

fully adapt in these changes, businesses must organize themselves along

fundamental new lines (Vartiainen, 1991). Additionally, Jarvenpaa and

Leidner (1998) said that when companies expand internationally, face

increasing time compression in product development, and use more

foreign-based subcontracting labour, virtual organizations assure the

flexibility, responsiveness, lower cost, and improved resource utilization

necessary to meet changing task requirements in a extremely disordered

and dynamic international business environment. Technical

modernization in the competence of computing and telecommunications

technologies have facilitated virtual organizations to obtain and maintain

distributed structures by supporting coordination among people working

from different locations. Ray Grenier and George Metes argued the

change to this new organizational structure as a response to unparalleled

customer expectations and alternatives, global competition, time

compression, complexity, rapid change, and better use of technology.

They explained the virtual model as a lead organization that makes

coalitions with groups and individuals from different organizations that

have good potential to develop a specific product or service in a short

period of time. Grenier and Meters also described that such coalitions

are virtual because products and services are not produced in a single

corporation whose purpose is prolonged existence. These new virtual

organizations comprises of a hybrid of groups and individuals from

several companies that include customers, competitors, and suppliers

who have a specific objectives to develop a high-quality product or

service to market as quickly as possible.

The virtual cooperation. A network of organization working

independently to bring product in the

market.

Theoretical studies have been done to recognize virtual organizations.

Ahuja and Carley (1998) stated that a virtual organization is a

geographically distributed organization whose members are bound by a

long-term common interest or goal, and who correspond and coordinate

their work through information technology. Other theorists define virtual

organizations, as a small, core organization that outsources major

business functions. In structural terms, the virtual organization is highly

centralized, with little or no departmentalization (Robbins, 2001).

Jackson explained virtual organizations from a very technical

perspective (1999). The term virtuality was first invented in the area of

information technology in which it was used to illustrate memory that

could be activated only for a particular purpose. With such task

specificity it is possible to make computer memory appear bigger than it

is in reality. This concept was applied to organizations to maintain a

similar fact, this being organizational structures and processes that do

only exist when activated. Consequently, virtual organizations emerge

big on the outside, while being small on the inside. This is possible with

the extensive use of computer-mediated networks. Some group of

theorists stated that Virtual organizations are dynamic networks of knots

(individuals, organizational sub-units, organizations) whose (computer-

mediated) links are configured dynamically and only for specific

problems (Picot etal. in Jackson, 1999). Therefore, virtual organizations

are characterized by a steady process of determining and re-shaping

(Barnatt; Davidow and Malone; in Jackson, 1999). Ahuja and Carley

(1998); Daniels (1998); Jarvenpaa and Leidner (1998) have

recommended that ICT are the vital "organizational bond" that embrace

the virtual organization together although it is geographically dispersed.

Characteristics of a Virtual Organization

The common characteristics of virtual organizations include a purpose

that is motivated by specific market opportunities, world-class core

competence, information networks, interdependent relationships, and

permeable boundaries. Virtual organizations correspond to structures

that are encouraged by particular market opportunities. Once the

association has been developed and the opportunity has been exploited,

collaborators may come forward to new partnerships and alliances. Each

associate in a virtual corporation contributes a high level core

competence, such as design, manufacturing, or marketing. This ability of

multiple firms to create synergies among world-class functions and

processes creates innumerable possibilities. As organizations form these

new linkages, highly developed information technology becomes an

important component and the major ground for the success of a virtual

organization. Computerized information systems permit workers from

geographically dispersed locations to link up with one another.

The virtual office may utilize desktop videoconferencing, combined

software, and intranet systems to improve the flow of information

among team members. Besides the requirement for immediate

communication with one another, members of these independent virtual

teams have increasing requirements regarding the amount and quality of

information they need to do their work. Members of the virtual

organization, develop a network of mutually dependent relationships.

These relationships necessitate firms to be more dependent on one

another than they have been in the past, demanding unparalleled levels

of faith. Strong interdependencies cause organizations' boundaries to be

unclear as competitors, suppliers, and customers enter into supportive

agreements. These new relationships among companies force

organizations to use new management practices.

Characteristics of virtual
organization

Challenges

Virtual organizations are highly complex and challenging. Major

challenges of the virtual organization include strategic planning

dilemmas, boundary blurring, a loss of control, and a need for new

managerial proficiency. Strategic planning also exert new challenges as

virtual organizations determine effective combinations of core

competencies. General vision among collaborators is prototypical to

cooperating firms. When focused on a general goal, companies develop

strong interdependencies that create problems to determine where one

company ends and another starts. The boundary-blurring demands that

 these boundaries be managed efficiently. Coordinating mechanisms are

crucial elements for supporting these loose collections of firms.

Sometimes, virtual structures make a loss of control over some

operations. This loss of control necessitates communication,

organization, and trust among the various collaborators, as well as a new

set of managerial skilfulness. Workers are exposed to increased

uncertainty about organizational membership, job roles and

responsibilities, career paths, and superior-subordinate relationships.

This vagueness requires for management to rethink about rewards,

benefits, employee development, recruitment and other employee-

related problems. It is quite difficult to develop leaders who are able to

create and maintain these organizational forms. Management scholar,

Les Pang presents numerous best practices, based on a review of

successful implementations of virtual organizations. These are as

follows:

 Promote cooperation, trust and empowerment.

 Make certain each collaborator contributes and identifiable strength or

asset.

 Guarantee skills and competencies are complementary, not

overlapping.

 Ensure partners are flexible.

 Ensure contractual agreements are clear and specific on roles and

deliverables.

 If possible, do not replace face-to-face interaction entirely.

 Provide training that is critical to team success.

 Recognize that it takes time to develop the team.

 Ensure that technology is compatible and reliable.

 Provide technical assistance that is competent and available.

Future of Virtual Organizations

The business environment in present scenario necessitates firms to

become even supplier, more agile, and to bring products and services to

market at rapid pace. It is shown in management literature that

traditional organization forms are not suitable to retain the needs of this
persistent pace. New forms of organizing, such as the virtual

organization, hold promise as organizational leaders experiment and

learn novel strategies to manage in the twenty-first century. These new

structures will require managers and leaders to deal with emerging

challenges as they go into an environment of increased ambiguity and

instability.

In scientific literature review, it has been demonstrated that investigators

see the difference between VO and NO. As both types of organizations

are directly related to computer mediated processes of relationship

expression, yet they include few drivers' features.

The Use of Virtual Organizations

Virtual organizations are authorized in many countries of the world. The

push of this effort is UK Gateway, a web portal that will permit citizens

and businesses to carry out all official transactions online. The purpose

of making all government services digital is a determined one by world

standards and the UK will hit its target. Records indicated that in the

United Kingdom today, 57 percent of the population of 60 million

people have access to the Internet, and 98 percent of the country's three

million businesses are connected. Many organizations and governmental

agencies have formed virtual organizations.

To summarize, there are two types of organization in promising business

environment. Virtual organization is an independent geographically

distributed short time or permanent consolidation of organizations,

groups or individuals, which without time or space hindrances

correspond through ICT while accomplishing a common objective. On

the other hand, Networked organization is a malleable organization with

a network based structure in which employees without structural, time or

space hindrances converse through ICT while executing their duties. A

network organization is a set of independent firms or units that behave

as a single big unit, using social mechanisms for harmonization and

control. The entities that make up a network organization are generally

lawfully independent entities but not always. Main features to

differentiate virtual organization and networked organization are the

position of the network in communication and function delivery process

and number of organizational units involved.

KNOWLEDGE BASED ENTERPRISE

Introduction
Knowledge management is an activity practised by enterprises all over the world. In the
process of knowledge management, these enterprises comprehensively gather
information using many methods and tools.
Then, gathered information is organized, stored, shared, and analyzed using defined
techniques.
The analysis of such information will be based on resources, documents, people and
their skills.
Properly analyzed information will then be stored as 'knowledge' of the enterprise. This
knowledge is later used for activities such as organizational decision making and
training new staff members.
There have been many approaches to knowledge management from early days. Most
of early approaches have been manual storing and analysis of information. With the
introduction of computers, most organizational knowledge and management processes
have been automated.
Therefore, information storing, retrieval and sharing have become convenient.
Nowadays, most enterprises have their own knowledge management framework in
place.
The framework defines the knowledge gathering points, gathering techniques, tools
used, data storing tools and techniques and analyzing mechanism.

The Knowledge Management Process

The process of knowledge management is universal for any enterprise. Sometimes,
the resources used, such as tools and techniques, can be unique to the organizational
environment.
The Knowledge Management process has six basic steps assisted by different tools
and techniques. When these steps are followed sequentially, the data transforms into
knowledge.
Step 1: Collecting
This is the most important step of the knowledge management process. If you collect
the incorrect or irrelevant data, the resulting knowledge may not be the most accurate.
Therefore, the decisions made based on such knowledge could be inaccurate as well.
There are many methods and tools used for data collection. First of all, data collection
should be a procedure in knowledge management process. These procedures should
be properly documented and followed by people involved in data collection process.
The data collection procedure defines certain data collection points. Some points may
be the summary of certain routine reports. As an example, monthly sales report and
daily attendance reports may be two good resources for data collection.
With data collection points, the data extraction techniques and tools are also defined.
As an example, the sales report may be a paper-based report where a data entry
operator needs to feed the data manually to a database whereas, the daily attendance
report may be an online report where it is directly stored in the database.
In addition to data collecting points and extraction mechanism, data storage is also
defined in this step. Most of the organizations now use a software database application
for this purpose.
Step 2: Organizing
The data collected need to be organized. This organization usually happens based on
certain rules. These rules are defined by the organization.
As an example, all sales-related data can be filed together and all staff-related data
could be stored in the same database table. This type of organization helps to maintain
data accurately within a database.
If there is much data in the database, techniques such as 'normalization' can be used
for organizing and reducing the duplication.
This way, data is logically arranged and related to one another for easy retrieval. When
data passes step 2, it becomes information.
Step 3: Summarizing
In this step, the information is summarized in order to take the essence of it. The
lengthy information is presented in tabular or graphical format and stored appropriately.
For summarizing, there are many tools that can be used such as software packages,
charts (Pareto, cause-and-effect), and different techniques.
Step 4: Analyzing
At this stage, the information is analyzed in order to find the relationships,
redundancies and patterns.
An expert or an expert team should be assigned for this purpose as the experience of
the person/team plays a vital role. Usually, there are reports created after analysis of
information.
Step 5: Synthesizing
At this point, information becomes knowledge. The results of analysis (usually the
reports) are combined together to derive various concepts and artefacts.
A pattern or behavior of one entity can be applied to explain another, and collectively,
the organization will have a set of knowledge elements that can be used across the
organization.
This knowledge is then stored in the organizational knowledge base for further use.
Usually, the knowledge base is a software implementation that can be accessed from
anywhere through the Internet.
You can also buy such knowledge base software or download an open-source
implementation of the same for free.
Step 6: Decision Making
At this stage, the knowledge is used for decision making. As an example, when
estimating a specific type of a project or a task, the knowledge related to previous
estimates can be used.
This accelerates the estimation process and adds high accuracy. This is how the
organizational knowledge management adds value and saves money in the long run.
Conclusion
Knowledge management is an essential practice for enterprise organizations.
Organizational knowledge adds long-term benefits to the organization in terms of
finances, culture and people.
Therefore, all mature organizations should take necessary steps for knowledge
management in order to enhance the business operations and organization's overall
capability.
INFORMATION SYSTEM-AND-RESOURCEMGMT-ERP-EBUSINESS-
EGOVERNANCE

Information Resources Management (IRM) is the process of managing

information resources to accomplish agency missions and to improve
agency performance, including the reduction of information collection
burdens on the public. When standardized and controlled, these
resources can be shared and reused throughout an agency, not just by a
single user or application.
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There are three (3) classes of information resources:

1. Business Resources: Enterprises, Business Functions, Positions

(Jobs), Human/Machine Resources, Skills, Business Objectives,
Projects, and Information Requirements.
2. System Resources: Systems, Sub-Systems (business processes),
Administrative Procedures (manual procedures and office
automation-related), Computer Procedures, Programs, Operational
Steps, Modules, and Subroutines.
3. Data Resources: Data Elements, Storage Records, Files (computer
and manual), Views, Objects, Inputs, Outputs, Panels, Maps, Call
Parameters, and Data Bases.

Information Resources Management (IRM) Concept

The concept of RM is actually no different in intent than Materials

Resource Planning (MRP) as used in manufacturing. Both are concerned
with the efficient and cost-effective use of resources. The classification
and control of resources are the main objectives. Resources are classified
to prove their uniqueness so that redundancy is not introduced and to
promote sharing. Control is required to collect, inventory, and retrieve
resources as required by the business.
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Information Resources Management (IRM) vs. Materials Resource Planning (MRP)

Whereas MRP is concerned with managing products and the parts

required to produce them, IRM is concerned with managing information
and the resources required to produce it.

Benefits of Information Resources Management (IRM)

One of the important benefits of IRM is the cataloging and cross-

referencing information resources is a model of the enterprise, including
how it is organized and how it operates. Other benefits include:
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 All information resources are controllable, permitting the ability to

design integrated systems and perform an “impact analysis” of a
proposed resource change.
 The simplified search of information resources for reuse. The
redundancy of resource definition is eliminated.
 Complete and current documentation of all information resources,
in an organized and meaningful way.
 Communications within the organization are improved since
developers and users would use standard and common definitions
for information resources, all of which would be in standard
business terminology.

ERP
Enterprise resource planning (ERP) is a process used by companies to
manage and integrate the important parts of their businesses. Many ERP
software applications are important to companies because they help them
implement resource planning by integrating all of the processes needed to
run their companies with a single system. An ERP software system can also
integrate planning, purchasing inventory, sales, marketing, finance, human
resources, and more.

KEY TAKEAWAYS

 ERP software can integrate all of the processes needed to run a

company.
  ERP solutions have evolved over the years, and many are now typically
web-based applications that users can access remotely.
 Some benefits of ERP include the free flow of communication between
business areas, a single source of information, and accurate, real-time
data reporting.
 An ERP system can be ineffective if a company doesn't implement it

Understanding Enterprise Resource Planning

You can think of an enterprise resource planning system as the glue that
binds together the different computer systems for a large organization.
Without an ERP application, each department would have its system
optimized for its specific tasks. With ERP software, each department still has
its system, but all of the systems can be accessed through one application
with one interface.

ERP applications also allow the different departments to communicate and

share information more easily with the rest of the company. It collects
information about the activity and state of different divisions, making this
information available to other parts, where it can be used productively.

ERP applications can help a corporation become more self-aware by linking

information about the production, finance, distribution, and human resources
together. Because it connects different technologies used by each part of a
business, an ERP application can eliminate costly duplicate and incompatible
technology. The process often integrates accounts payable, stock control
systems, order-monitoring systems, and customer databases into one
system.

ERP offerings have evolved over the years from traditional software models
that make use of physical client servers to cloud-based software that offers
remote, web-based access.

A company could experience cost overruns if its ERP system is not

implemented carefully.

Benefits of Enterprise Resource Planning (ERP)

Businesses employ enterprise resource planning (ERP) for various reasons,
such as expanding business, reducing costs, and improving operations. The
benefits sought and realized by one company may be different from another;
however, there are some worth noting.

Integrating and automating business processes eliminates redundancies,

improves accuracy, and improves productivity. Departments with
interconnected processes can now synchronize work to achieve faster and
better outcomes.

Some businesses benefit from enhanced reporting of real-time data from a

single source system. Accurate and complete reporting help companies
adequately plan, budget, forecast, and communicate the state of operations
to the organization and interested parties, such as shareholders.

ERPs allow businesses to quickly access needed information for clients,

vendors, and business partners, contributing to improved customer and
employee satisfaction, quicker response rates, and increased accuracy rates.
Associated costs often decrease as the company operates more efficiently.

Departments are better able to collaborate and share knowledge; a newly

synergized workforce can improve productivity and employee satisfaction as
employees are better able to see how each functional group contributes to
the mission and vision of the company. Also, menial, manual tasks are
eliminated, allowing employees to allocate their time to more meaningful
work.

Examples of Enterprise Resource Planning (ERP)

Men's grooming product maker Fulton & Roark successfully implemented
enterprise resource planning to better track inventory and financial data. The
North Carolina company, like many other businesses, used spreadsheets to
track inventory and accounting software to record financial data. 1

As the company grew, its processes lagged behind. Their antiquated

inventory tracking system did not account for changing costs, and the
accounting software could not record metrics needed for key financial
statements. These breakdowns created manual processes, which further
compromised time and resources.

To eliminate unnecessary processes and centralize work, they chose the

Oracle Netsuite ERP system. Immediately, Fulton & Rourk was better able to
identify accounting errors related to inventory, eliminate costs from employing
 third-parties to evaluate their financial records, and better report financial
positions.

Cadbury, global confectioner and maker of the popular chocolate Cadbury

egg, also successfully implemented an ERP system. It operated thousands of
systems that could not keep pace with its rapid growth, as well as used
ineffective warehouse management systems. Previously, it implemented a
failed SAP ERP system, which resulted in an overproduction of products.

Trying its hand at enterprise resource planning again, it implemented a

system that integrated its thousands of applications,2 standardized processes
across 16 locations, and restructured warehouse management systems—
breaking down silos for a seamless, integrated coordination of work—to
name a few.3

EGOVERNANCE
Definition: E-governance, expands to electronic governance, is the
integration of Information and Communication Technology (ICT) in all the
processes, with the aim of enhancing government ability to address the needs
of the general public. The basic purpose of e-governance is to simplify
processes for all, i.e. government, citizens, businesses, etc. at National, State
and local levels.

In short, it is the use of electronic means, to promote good governance. It

connotes the implementation of information technology in the government
processes and functions so as to cause simple, moral, accountable and
transparent governance. It entails the access and delivery of government
services, dissemination of information, communication in a quick and efficient
manner.

Benefits of E-governance
 Reduced corruption
 High transparency
 Increased convenience
 Growth in GDP
 Direct participation of constituents
 Reduction in overall cost.
 Expanded reach of government
Through e-governance, the government plans to raise the coverage and
quality of information and services provided to the general public, by the
use of ICT in an easy, economical and effective manner. The process is
extremely complicated which requires, the proper arrangement of hardware,
software, networking and indeed re-engineering of all the processes to
facilitate better delivery of services.

Types of Interactions in E-Governance

1. G2G (Government to Government): When the exchange of information and
services is within the periphery of the government, is termed as G2G
interaction. This can be both horizontal, i.e. among various government
entities and vertical, i.e. between national, state and local government entities
and within different levels of the entity.
2. G2C (Government to Citizen): The interaction amidst the government and
general public is G2C interaction. Here an interface is set up between
government and citizens, which enables citizens to get access to wide variety
of public services. The citizens has the freedom to share their views and
grievances on government policies anytime, anywhere.
3. G2B (Government to Business): In this case, the e-governance helps the
business class to interact with the government seamlessly. It aims at
eliminating red-tapism, saving time, cost and establish transparency in the
business environment, while interacting with government.
4. G2E (Government to Employees): The government of any country is the
biggest employer and so it also deals with employees on a regular basis, as
other employers do. ICT helps in making the interaction between government
and employees fast and efficient, along with raising their level of satisfaction
by providing perquisites and add-on benefits.
E-governance can only be possible if the government is ready for it. It is not a
one day task, and so the government has to make plans and implement them
before switching to it. Some of the measures include Investment in
telecommunication infrastructure, budget resources, ensure security, monitor
assessment, internet connectivity speed, promote awareness among public
regarding the importance, support from all government departments and so
forth

E-governance has a great role to play, that improves and supports all tasks
performed by the government department and agencies, because it
simplifies the task on the one hand and increases the quality of work on the
other.

EBUSINESS

Introduction to e-Business
E-business or Online business means business transactions that take
place online with the help of the internet. The term e-business came into
existence in the year 1996. E-business is an abbreviation for electronic
business. So the buyer and the seller don’t meet personally.

In today’s world, we are exposed to various forms of e-Business. Since

its emergence, it has grown by leaps and bounds. Some predict that it
may very soon overtake brick and mortar stores completely. While that
remains to be seen, we cannot ignore the immense role it plays in the
current global economy.

Features of Online Business

Some of the features of Online Business are as follows :

 It is easy to set up
 There are no geographical boundaries
 Much cheaper than traditional business
 There are flexible business hours
 Marketing strategies cost less
 Online business receive subsidies from the government
 There are a few security and integrity issues
 There is no personal touch
 Buyer and seller don’t meet
 Delivery of products takes time
 There is a transaction risk
 Anyone can buy anything from anywhere at anytime
 The transaction risk is higher than traditional business
DSS, DATA WAREHOUSING AND DATA MINING

What is a Decision Support System (DSS)?

A decision support system (DSS) is an information system that aids a
business in decision-making activities that require judgment, determination,
and a sequence of actions. The information system assists the mid- and
high-level management of an organization by analyzing huge volumes of
unstructured data and accumulating information that can help to solve
problems and help in decision-making. A DSS is either human-powered,
automated, or a combination of both.

Purpose of a Decision Support System

A decision support system produces detailed information reports by

gathering and analyzing data. Hence, a DSS is different from a normal
operations application, whose goal is to collect data and not analyze it.

In an organization, a DSS is used by the planning departments – such as the

operations department – which collects data and creates a report that can
be used by managers for decision-making. Mainly, a DSS is used in sales
projection, for inventory and operations-related data, and to present
information to customers in an easy-to-understand manner.

Theoretically, a DSS can be employed in various knowledge domains from

an organization to forest management and the medical field. One of the
main applications of a DSS in an organization is real-time reporting. It can
be very helpful for organizations that take part in just-in-time (JIT) inventory
management.

In a JIT inventory system, the organization requires real-time data of their

inventory levels to place orders “just in time” to prevent delays in
production and cause a negative domino effect. Therefore, a DSS is more
tailored to the individual or organization making the decision than a
traditional system.

Components of a Decision Support System

The three main components of a DSS framework are:

1. Model Management System

The model management system S=stores models that managers can use in
their decision-making. The models are used in decision-making regarding
the financial health of the organization and forecasting demand for a good
or service.

2. User Interface

The user interface includes tools that help the end-user of a DSS to navigate
through the system.

3. Knowledge Base

The knowledge base includes information from internal sources (information

collected in a transaction process system) and external sources
(newspapers and online databases).
Types of Decision Support Systems

 Communication-driven: Allows companies to support tasks that

require more than one person to work on the task. It includes
integrated tools such as Microsoft SharePoint Workspace and Google
Docs.
 Model-driven: Allows access to and the management of financial,
organizational, and statistical models. Data is collected, and
parameters are determined using the information provided by users.
The information is created into a decision-making model to analyze
situations. An example of a model-driven DSS is Dicodess – an open-
source model-driven DSS.
 Knowledge-driven: Provides factual and specialized solutions to
situations using stored facts, procedures, rules, or interactive
decision-making structures like flowcharts.
 Document-driven: Manages unstructured information in different
electronic formats.
 Data-driven: Helps companies to store and analyze internal and
external data.

Advantages of a Decision Support System

 A decision support system increases the speed and efficiency of

decision-making activities. It is possible, as a DSS can collect and
analyze real-time data.
 It promotes training within the organization, as specific skills must be
developed to implement and run a DSS within an organization.
 It automates monotonous managerial processes, which means more
of the manager’s time can be spent on decision-making.
 It improves interpersonal communication within the organization.

Disadvantages of a Decision Support System

 The cost to develop and implement a DSS is a huge capital

investment, which makes it less accessible to smaller organizations.
  A company can develop a dependence on a DSS, as it is integrated
into daily decision-making processes to improve efficiency and speed.
However, managers tend to rely on the system too much, which takes
away the subjectivity aspect of decision-making.
 A DSS may lead to information overload because an information
system tends to consider all aspects of a problem. It creates a
dilemma for end-users, as they are left with multiple choices.
 Implementation of a DSS can cause fear and backlash from lower-
level employees. Many of them are not comfortable with new
technology and are afraid of losing their jobs to technology.

DATA WAREHOUSING
Data warehousing is the process of constructing and using a data warehouse. A data
warehouse is constructed by integrating data from multiple heterogeneous sources that
support analytical reporting, structured and/or ad hoc queries, and decision making.
Data warehousing involves data cleaning, data integration, and data consolidations.

Using Data Warehouse Information

There are decision support technologies that help utilize the data available in a data
warehouse. These technologies help executives to use the warehouse quickly and
effectively. They can gather data, analyze it, and take decisions based on the
information present in the warehouse. The information gathered in a warehouse can be
used in any of the following domains −
 Tuning Production Strategies − The product strategies can be well tuned by
repositioning the products and managing the product portfolios by comparing
the sales quarterly or yearly.
 Customer Analysis − Customer analysis is done by analyzing the customer's
buying preferences, buying time, budget cycles, etc.
 Operations Analysis − Data warehousing also helps in customer relationship
management, and making environmental corrections. The information also
allows us to analyze business operations.

Integrating Heterogeneous Databases

To integrate heterogeneous databases, we have two approaches −

 Query-driven Approach
 Update-driven Approach

Query-Driven Approach
This is the traditional approach to integrate heterogeneous databases. This approach
was used to build wrappers and integrators on top of multiple heterogeneous
databases. These integrators are also known as mediators.
Process of Query-Driven Approach
 When a query is issued to a client side, a metadata dictionary translates the
query into an appropriate form for individual heterogeneous sites involved.
 Now these queries are mapped and sent to the local query processor.
 The results from heterogeneous sites are integrated into a global answer set.
Disadvantages
 Query-driven approach needs complex integration and filtering processes.
 This approach is very inefficient.
 It is very expensive for frequent queries.
 This approach is also very expensive for queries that require aggregations.

Update-Driven Approach
This is an alternative to the traditional approach. Today's data warehouse systems
follow update-driven approach rather than the traditional approach discussed earlier. In
update-driven approach, the information from multiple heterogeneous sources are
integrated in advance and are stored in a warehouse. This information is available for
direct querying and analysis.
Advantages
This approach has the following advantages −
 This approach provide high performance.
 The data is copied, processed, integrated, annotated, summarized and
restructured in semantic data store in advance.
 Query processing does not require an interface to process data at local sources.

Functions of Data Warehouse Tools and Utilities

The following are the functions of data warehouse tools and utilities −
 Data Extraction − Involves gathering data from multiple heterogeneous
sources.
 Data Cleaning − Involves finding and correcting the errors in data.
  Data Transformation − Involves converting the data from legacy format to
warehouse format.
 Data Loading − Involves sorting, summarizing, consolidating, checking integrity,
and building indices and partitions.
 Refreshing − Involves updating from data sources to warehouse.

DATA MINING

Data mining is one of the most useful techniques that help entrepreneurs, researchers,
and individuals to extract valuable information from huge sets of data. Data mining is
also called Knowledge Discovery in Database (KDD). The knowledge discovery
process includes Data cleaning, Data integration, Data selection, Data transformation,
Data mining, Pattern evaluation, and Knowledge presentation.

The process of extracting information to identify patterns, trends, and useful data that
would allow the business to take the data-driven decision from huge sets of data is
called Data Mining.Difference between JDK, JRE, and JVM

In other words, we can say that Data Mining is the process of investigating hidden
patterns of information to various perspectives for categorization into useful data, which
is collected and assembled in particular areas such as data warehouses, efficient analysis,
data mining algorithm, helping decision making and other data requirement to
eventually cost-cutting and generating revenue.

Data mining is the act of automatically searching for large stores of information to find
trends and patterns that go beyond simple analysis procedures. Data mining utilizes
complex mathematical algorithms for data segments and evaluates the probability of
future events. Data Mining is also called Knowledge Discovery of Data (KDD).

Data Mining is a process used by organizations to extract specific data from huge
databases to solve business problems. It primarily turns raw data into useful information.

Data Mining is similar to Data Science carried out by a person, in a specific situation, on
a particular data set, with an objective. This process includes various types of services
such as text mining, web mining, audio and video mining, pictorial data mining, and
social media mining. It is done through software that is simple or highly specific. By
outsourcing data mining, all the work can be done faster with low operation costs.
Specialized firms can also use new technologies to collect data that is impossible to
locate manually. There are tonnes of information available on various platforms, but very
little knowledge is accessible. The biggest challenge is to analyze the data to extract
important information that can be used to solve a problem or for company
development. There are many powerful instruments and techniques available to mine
data and find better insight from it.

Types of Data Mining

Data mining can be performed on the following types of data:

Relational Database:

A relational database is a collection of multiple data sets formally organized by tables,

records, and columns from which data can be accessed in various ways without having
to recognize the database tables. Tables convey and share information, which facilitates
data searchability, reporting, and organization.

Data warehouses:

A Data Warehouse is the technology that collects the data from various sources within
the organization to provide meaningful business insights. The huge amount of data
comes from multiple places such as Marketing and Finance. The extracted data is
utilized for analytical purposes and helps in decision- making for a business
organization. The data warehouse is designed for the analysis of data rather than
transaction processing.

Data Repositories:

The Data Repository generally refers to a destination for data storage. However, many IT
professionals utilize the term more clearly to refer to a specific kind of setup within an IT
structure. For example, a group of databases, where an organization has kept various
kinds of information.

Object-Relational Database:

A combination of an object-oriented database model and relational database model is

called an object-relational model. It supports Classes, Objects, Inheritance, etc.

One of the primary objectives of the Object-relational data model is to close the gap
between the Relational database and the object-oriented model practices frequently
utilized in many programming languages, for example, C++, Java, C#, and so on.

Transactional Database:

A transactional database refers to a database management system (DBMS) that has the
potential to undo a database transaction if it is not performed appropriately. Even
though this was a unique capability a very long while back, today, most of the relational
database systems support transactional database activities.

Advantages of Data Mining

o The Data Mining technique enables organizations to obtain knowledge-based
data.
o Data mining enables organizations to make lucrative modifications in operation
and production.
o Compared with other statistical data applications, data mining is a cost-efficient.
o Data Mining helps the decision-making process of an organization.
o It Facilitates the automated discovery of hidden patterns as well as the prediction
of trends and behaviors.
 o It can be induced in the new system as well as the existing platforms.
o It is a quick process that makes it easy for new users to analyze enormous
amounts of data in a short time.

Disadvantages of Data Mining

o There is a probability that the organizations may sell useful data of customers to
other organizations for money. As per the report, American Express has sold
credit card purchases of their customers to other organizations.
o Many data mining analytics software is difficult to operate and needs advance
training to work on.
o Different data mining instruments operate in distinct ways due to the different
algorithms used in their design. Therefore, the selection of the right data mining
tools is a very challenging task.
o The data mining techniques are not precise, so that it may lead to severe
consequences in certain conditions.

Data Mining Applications

Data Mining is primarily used by organizations with intense consumer demands- Retail,
Communication, Financial, marketing company, determine price, consumer preferences,
product positioning, and impact on sales, customer satisfaction, and corporate profits.
Data mining enables a retailer to use point-of-sale records of customer purchases to
develop products and promotions that help the organization to attract the customer.
Challenges of Implementation in Data mining
Although data mining is very powerful, it faces many challenges during its execution.
Various challenges could be related to performance, data, methods, and techniques, etc.
The process of data mining becomes effective when the challenges or problems are
correctly recognized and adequately resolved.
Incomplete and noisy data:

The process of extracting useful data from large volumes of data is data mining. The
data in the real-world is heterogeneous, incomplete, and noisy. Data in huge quantities
will usually be inaccurate or unreliable. These problems may occur due to data
measuring instrument or because of human errors. Suppose a retail chain collects phone
numbers of customers who spend more than $ 500, and the accounting employees put
the information into their system. The person may make a digit mistake when entering
the phone number, which results in incorrect data. Even some customers may not be
willing to disclose their phone numbers, which results in incomplete data. The data
could get changed due to human or system error. All these consequences (noisy and
incomplete data)makes data mining challenging.

Data Distribution:
Real-worlds data is usually stored on various platforms in a distributed computing
environment. It might be in a database, individual systems, or even on the internet.
Practically, It is a quite tough task to make all the data to a centralized data repository
mainly due to organizational and technical concerns. For example, various regional
offices may have their servers to store their data. It is not feasible to store, all the data
from all the offices on a central server. Therefore, data mining requires the development
of tools and algorithms that allow the mining of distributed data.

Complex Data:

Real-world data is heterogeneous, and it could be multimedia data, including audio and
video, images, complex data, spatial data, time series, and so on. Managing these
various types of data and extracting useful information is a tough task. Most of the time,
new technologies, new tools, and methodologies would have to be refined to obtain
specific information.

Performance:

The data mining system's performance relies primarily on the efficiency of algorithms
and techniques used. If the designed algorithm and techniques are not up to the mark,
then the efficiency of the data mining process will be affected adversely.

Data Privacy and Security:

Data mining usually leads to serious issues in terms of data security, governance, and
privacy. For example, if a retailer analyzes the details of the purchased items, then it
reveals data about buying habits and preferences of the customers without their
permission.

Data Visualization:

In data mining, data visualization is a very important process because it is the primary
method that shows the output to the user in a presentable way. The extracted data
should convey the exact meaning of what it intends to express. But many times,
representing the information to the end-user in a precise and easy way is difficult. The
input data and the output information being complicated, very efficient, and successful
data visualization processes need to be implemented to make it successful.
DBMS AND RDBMS, DFD AND DATA DICTIONARY

DBMS

o Database management system is a software which is used to manage the database. For
example: MySQL, Oracle, etc are a very popular commercial database which is used in
different applications.
o DBMS provides an interface to perform various operations like database creation, storing
data in it, updating data, creating a table in the database and a lot more.
o It provides protection and security to the database. In the case of multiple users, it also
maintains data consistency.

DBMS allows users the following tasks:

o Data Definition: It is used for creation, modification, and removal of definition that
defines the organization of data in the database.
o Data Updation: It is used for the insertion, modification, and deletion of the actual data
in the database.
o Data Retrieval: It is used to retrieve the data from the database which can be used by
applications for various purposes.
o User Administration: It is used for registering and monitoring users, maintain data
integrity, enforcing data security, dealing with concurrency control, monitoring
performance and recovering information corrupted by unexpected failure.

Characteristics of DBMS
o It uses a digital repository established on a server to store and manage the information.
o It can provide a clear and logical view of the process that manipulates data.
o DBMS contains automatic backup and recovery procedures.
o It contains ACID properties which maintain data in a healthy state in case of failure.
o It can reduce the complex relationship between data.
o It is used to support manipulation and processing of data.
o It is used to provide security of data.
 o It can view the database from different viewpoints according to the requirements of the
user.

Advantages of DBMS
o Controls database redundancy: It can control data redundancy because it stores all the
data in one single database file and that recorded data is placed in the database.
o Data sharing: In DBMS, the authorized users of an organization can share the data
among multiple users.
o Easily Maintenance: It can be easily maintainable due to the centralized nature of the
database system.
o Reduce time: It reduces development time and maintenance need.
o Backup: It provides backup and recovery subsystems which create automatic backup of
data from hardware and software failures and restores the data if required.
o multiple user interface: It provides different types of user interfaces like graphical user
interfaces, application program interfaces

Disadvantages of DBMS
o Cost of Hardware and Software: It requires a high speed of data processor and large
memory size to run DBMS software.
o Size: It occupies a large space of disks and large memory to run them efficiently.
o Complexity: Database system creates additional complexity and requirements.
o Higher impact of failure: Failure is highly impacted the database because in most of
the organization, all the data stored in a single database and if the database is damaged
due to electric failure or database corruption then the data may be lost forever.
 RDBMS

RDBMS stands for Relational Database Management Systems..

All modern database management systems like SQL, MS SQL Server, IBM DB2, ORACLE,
My-SQL and Microsoft Access are based on RDBMS.

It is called Relational Data Base Management System (RDBMS) because it is based on

relational model introduced by E.F. Codd.

Although DBMS and RDBMS both are used to store information in physical database but
there are some remarkable differences between them.

No. DBMS RDBMS

1) DBMS applications store data as file. RDBMS applications store data in a tabular form.

2) In DBMS, data is generally stored in In RDBMS, the tables have an identifier called primary
either a hierarchical form or a key and the data values are stored in the form of
navigational form. tables.

3) Normalization is not present in Normalization is present in RDBMS.

DBMS.

4) DBMS does not apply any RDBMS defines the integrity constraint for the
security with regards to data purpose of ACID (Atomocity, Consistency, Isolation and
manipulation. Durability) property.

5) DBMS uses file system to store data, in RDBMS, data values are stored in the form of tables,
so there will be no relation between so a relationship between these data values will be
the tables. stored in the form of a table as well.

6) DBMS has to provide some uniform RDBMS system supports a tabular structure of the data
methods to access the stored and a relationship between them to access the stored
information. information.

7) DBMS does not support distributed RDBMS supports distributed database.

database.

8) DBMS is meant to be for small RDBMS is designed to handle large amount of data.
 organization and deal with small it supports multiple users.
data. it supports single user.

9) Examples of DBMS are file Example of RDBMS are mysql, postgre, sql
systems, xml etc. server, oracle etc.
The main differences between DBMS and RDBMS are given below:

After observing the differences between DBMS and RDBMS, you can say that RDBMS is
an extension of DBMS. There are many software products in the market today who are
compatible for both DBMS and RDBMS. Means today a RDBMS application is DBMS
application and vice-versa.

DFD

DFD is the abbreviation for Data Flow Diagram. The flow of data of a system
or a process is represented by DFD. It also gives insight into the inputs and
outputs of each entity and the process itself. DFD does not have control flow
and no loops or decision rules are present. Specific operations depending on
the type of data can be explained by a flowchart. Data Flow Diagram can be
represented in several ways. The DFD belongs to structured-analysis modeling
tools. Data Flow diagrams are very popular because they help us to visualize
the major steps and data involved in software-system processes.

Components of DFD

The Data Flow Diagram has 4 components:

 Process
Input to output transformation in a system takes place because of process
function. The symbols of a process are rectangular with rounded corners,
oval, rectangle or a circle. The process is named a short sentence, in one
word or a phrase to express its essence
 Data Flow
Data flow describes the information transferring between different parts of
the systems. The arrow symbol is the symbol of data flow. A relatable name
should be given to the flow to determine the information which is being
moved. Data flow also represents material along with information that is
 being moved. Material shifts are modeled in systems that are not merely
informative. A given flow should only transfer a single type of information.
The direction of flow is represented by the arrow which can also be bi-
directional.
 Warehouse
The data is stored in the warehouse for later use. Two horizontal lines
represent the symbol of the store. The warehouse is simply not restricted to
being a data file rather it can be anything like a folder with documents, an
optical disc, a filing cabinet. The data warehouse can be viewed independent
of its implementation. When the data flow from the warehouse it is
considered as data reading and when data flows to the warehouse it is
called data entry or data updation.
 Terminator
The Terminator is an external entity that stands outside of the system and
communicates with the system. It can be, for example, organizations like
banks, groups of people like customers or different departments of the same
organization, which is not a part of the model system and is an external
entity. Modeled systems also communicate with terminator.

Rules for creating DFD

 The name of the entity should be easy and understandable without any extra
assistance(like comments).
 The processes should be numbered or put in ordered list to be referred
easily.
 The DFD should maintain consistency across all the DFD levels.
 A single DFD can have maximum processes upto 9 and minimum 3
processes.
Levels of DFD
DFD uses hierarchy to maintain transparency thus multilevel DFD‟s can be
created. Levels of DFD are as follows:
 0-level DFD
 1-level DFD:
 2-level DFD:
Advantages of DFD
 It helps us to understand the functioning and the limits of a system.
 It is a graphical representation which is very easy to understand as it helps
visualize contents.
 Data Flow Diagram represent detailed and well explained diagram of system
components.
 It is used as the part of system documentation file.
 Data Flow Diagrams can be understood by both technical or nontechnical
person because they are very easy to understand.
Disadvantages of DFD
 At times DFD can confuse the programmers regarding the system.
 Data Flow Diagram takes long time to be generated, and many times due to
this reasons analysts are denied permission to work on it.

DATA DICTIONARY

A data dictionary contains metadata i.e data about the database. The data dictionary is
very important as it contains information such as what is in the database, who is allowed
to access it, where is the database physically stored etc. The users of the database
normally don't interact with the data dictionary, it is only handled by the database
administrators.
The data dictionary in general contains information about the following −

 Names of all the database tables and their schemas.

 Details about all the tables in the database, such as their owners, their security
constraints, when they were created etc.
 Physical information about the tables such as where they are stored and how.
 Table constraints such as primary key attributes, foreign key information etc.
 Information about the database views that are visible.
This is a data dictionary describing a table that contains employee details.
 Field Name Data Field Size for Description Example
Type display

Employee Integer 10 Unique ID of each 1645000001

Number employee

Name Text 20 Name of the employee David

Heston

Date of Birth Date/Time 10 DOB of Employee 08/03/1995

Phone Integer 10 Phone number of 6583648648

Number employee

The different types of data dictionary are −

Active Data Dictionary

If the structure of the database or its specifications change at any point of time, it should
be reflected in the data dictionary. This is the responsibility of the database
management system in which the data dictionary resides.
So, the data dictionary is automatically updated by the database management system
when any changes are made in the database. This is known as an active data dictionary
as it is self updating.

Passive Data Dictionary

This is not as useful or easy to handle as an active data dictionary. A passive data
dictionary is maintained separately to the database whose contents are stored in the
dictionary. That means that if the database is modified the database dictionary is not
automatically updated as in the case of Active Data Dictionary.
So, the passive data dictionary has to be manually updated to match the database. This
needs careful handling or else the database and data dictionary are out of sync.