mis – subsystems

MIS – Subsystems

& Types

ByArun Mishra

Subsystems of an MIS

Two approaches to define subsystemOrganisational Function

Subsystem: Supports the various functions of an Organisation. Ex. Marketing, Production, Personnel etc.

Activity Subsystem: Supports the activity for which they are used. Ex. Transactions, Operations etc.

MIS Subsystems

MIS Subsystems

STRATEGIC PLANNING

MANAGEMENT CONTROL

OPERATIONAL CONTROL

TRANSACTION PROCESSING

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Organisational Functions

Organisational Function Subsystems

Major Functional Subsystems

Some Uses

Marketing Information System

Sales forecasting, Sales planning, Sales analysis

Manufacturing Information System

Production planning & scheduling, cost control analysis

Personnel Information System

Salary Admn., Planning HR requirement, performance analysis

Accounting Information System

Financial Analysis, cost analysis, Capital planning, etc.

Logistics Information System

Planning & control of Purchasing, inventories, distribution.

Information Processing System

Planning of Information System, cost – effectiveness analysis

Top Management System

Strategic Planning, resource allocation

Activities Subsystems

Activity Subsystems Some Uses

Transaction Processing System

Processing of orders, shipments, & receipts

Operational Control System

Scheduling of activities and performance reports

Management Control System

Formulation of Budgets & resource allocation

Strategic Planning System

Formulation of Objectives & strategic plan

Types of Types of Information Information

SystemsSystems

Levels of Management

Upper or Top or Strategic Management

Middle or Tactical Management

Lower level Management

Three levels of management

Strategic

Tactical

Operational

Levels of Management

Lower or Operational level Management

They make structured decisions (Operational decisions).Structured decision It’s a predictable

decision that can be made following a well defined set of routine procedures.

Most decisions at this level require easily defined information that relates to the current status and activities within the basic business functions.

Information is gained from detailed reports which contain information about routine activities.

Detailed tasks defined by middle management are carried out by people at operational level.

Middle or Tactical Management

Acquire and arrange the resources (Computers, people etc) to meet the goals of an organization.

Define the detailed tasks to be carried out at the operational level.

Information needed involves review, summarization and analysis of data to help plan and control operations and implement policy that has been formulated by upper management.

Information is usually given to middle managers as summarized reports.

Deals with semi structured decisions. (Tactical decisions) Semi structured decisions that must be made

without a base of clearly defined informational procedures. In most cases a semi structured decision is complex, requiring detailed analysis and extensive computations.

Upper or Top or Strategic Management

Decides on the broad objectives of an organization.

Make unstructured decisions. (Strategic decision).Unstructured decisions are the

most complex type of decisions and are rarely based on predetermined routine procedures. They involve subjective judgments of the decision maker.

Types of Information Systems

Operations Support Systems

1. TRANSACTION PROCESSING SYSTEMSi. Transaction processing systems record and

process data resulting for business transactions.

ii. Typically examples are information systems that process sales, purchases, and inventory changes.

iii. These can be processed and used by management information systems, decision support systems, and executive information systems.

2. PROCESS CONTROL SYSTEMSi. Operation support systems also make routine

decisions that control operational processes.

ii. Examples are automatic inventory reorder decisions and production control decisions.

Operations Support Systems

3. ENTERPRISE COLLABORATION SYSTEMSi. Enterprise collaboration systems are

information systems that use a variety of information technologies to help people work together.

ii. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups.

Management Support Systems

1. MANAGEMENT INFORMATION SYSTEMS:

i. Management information systems (MIS) are the most common form of management support systems.

ii. They provide managerial end users with information that support much of their day-to-day decision-making needs.

iii. M IS provide a variety of reports and displays to management.

Management Support Systems

2. DECISION SUPPORT SYSTEMS:i. A natural progression from information reporting

systems and transaction processing systems. ii. Decision support systems are interactive,

computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users.

3. EXECUTIVE INFORMATION SYSTEMS:i. EIS are management information systems

tailored to the strategic information needs of top management.

ii. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems.

ASSIGNMENT #2

Explain Subsystems of an MIS.

Describe Briefly Types of Systems.

HOW SYSTEMS ARE BUILD FROM

SUBSYSTEMS

Decomposition

A complex system is very difficult to understand as a whole.

Therefore, it is decomposed or divided into subsystems. The sum of subsystems constitutes the entire system.

The process of decomposition is continued to with subsystems divided into smaller subsystems until the smallest subsystem are of manageable size.

These subsystems generally form hierarchical structure.

Hierarchical relations of subsystems

An example of Decomposition1. Information system divided into subsystem such

as:a. Sales & Order entryb. Inventoryc. Productiond. Personnel & Payrolle. Purchasingf. Accounting & Controlg. Planning

2. Each subsystem is further divided into subsystems. Ex. Personnel & Payroll:a. Personnel Reportsb. Payroll data entry & validationc. Hourly Payroll processingd. Salaried payroll processinge. Payroll Report for managementf. Payroll report for Government

3. The subsystems defined in (2) might be further subdivided into smaller subsystems or modules. For Example, the hourly payroll processing might be divided into modules for calculation of deductions & net pay, payroll register & audit controls preparations, register & controls outputs.

Simplification

The process of decomposition could lead to a large number of subsystem interfaces to define.

Each interconnection is a potential interface for communication among subsystems.

Simplification is the process of organizing subsystems so as to reduce the number of interconnections. Methods of simplification are: Clusters Decoupling

All systems interconnected

A1 A2

A3 A4

B1 B2

B3 B4

Cluster Method

Clusters of subsystems are established which interact with each other, then a single interface path is defined from the cluster to other subsystems or clusters of subsystems.

For Example: A database assessed by many programs, but the interconnection is through a database management interface.

Systems connected within cluster & clusters interconnected with single

interface

A1 A2

A3 A4

B1 B2

B3 B4

Decoupling Method

If two different subsystems are connected very tightly, very close coordination & timing between them is required.

Because, they are somewhat independent, it is difficult to make them operate completely in synchronized fashion.

The solution is to decouple or loosen the connection so that the two systems can operate in the short run with some measures of independence.

Some means of decoupling are: Inventories, buffer or waiting line Slack & flexible resources Standards

Means of Decoupling

What is Information?

Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective action or decision.

Information reduces uncertainty.Information tells something the

receiver did not know or could not predict.

Data Vs. Information

Data Raw facts in isolation. These are isolated facts convey meaning but generally are not useful by themselves.

Information is data that has been manipulated to be useful to someone. In other words, information must have value, or it is still data. Information tells people something they don’t already know or confirms something that is suspect.

Value of Information

The value of Information is described most meaningfully in the context of a decision.

The definition discussed earlier recognizes both; the value of information in a

specific decision and,the value of information in

motivation, model building, & background building affecting the future decisions & actions.

Value of Information in Decision Making

Decision theory provides approaches for making decisions under certainty, risk, & uncertainty.Decision making under certainty

assumes perfect information as to outcomes;

Risk assumes information as to the probability of each outcome; and

Uncertainty assumes a knowledge of possible outcomes but no information as to probability.

Value of Information in Decision Making

In decision theory the value of information is the value of change in decision behaviour caused by the information less the cost of obtaining the information.

In other words, out of set of possible decisions, a decision maker will select one on the basis of information at hand. If the new information causes the different

decision, the value of new information is the difference in

value of outcome of the old decision & that of the new decision,

less the cost of obtaining the new information.

If the new information does not cause different decision then value of information is Zero.

Value of Information in Decision Making

Value of Perfect Information: is computed as the difference between the optimal policy without perfect information & the optimal policy with perfect information.

Almost no decisions are made with perfect information because: The needed information is unavailable. The effort to acquire the information is too

costly. There is no knowledge of the availability of

the information. The information is not available in the form

needed.

Value of Information in Decision Making

Value of Information & Sensitivity Analysis: Sensitivity analysis consists of procedures to determine the degree of impact on a solution or a model of changes in one or more variables. For Example: What is the effect on the profit of a 10% increase in sales

or 10% decrease in sales? Will the project be justified of the cost increases 10%?

If the decision is not sensitive to the value of variables, additional information on the future value of variable will have no effect on decision (have no Value.)

If the decision is highly sensitive to change in the future value of variable, sensitivity analysis also indicates the degree of sensitivity. The effect shows the value of more information to reduce uncertainty.

Value of information other than in a Decision

Motivation: Some information is motivational, it provides the information with a report on how well they are doing. This feedback information may motivate decisions.

Model Building: The management & operation of a enterprise function with models of the enterprise. Information that is received be these managers may result in change or reinforcement of their models.

Value of information other than in a Decision

Background Building: In decision theory the value of information is the value of change in decision behaviour, but the information has value only to those who have the background knowledge to use it in a decision. The most qualified person generally uses information most effectively but may need less information since experience has already reduced uncertainty.