application of mis

7/29/2019 Application of MIS

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Uncondit ion al Love is the divine bl iss 1

Application of MIS

M.Viswanathan

Systems Manager

Kerala Agricultural University

[email protected]

Mob: 9447614792
mailto:[email protected]:[email protected]


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Applications of MIS


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INFORMATION SYSTEM MODEL

The MIS model of an application, considers transactionprocessing as a basis. The primary objective of the

system designer is the identification of inputs which are

processed by online transaction processing (OLTP)

system for each application. The system designer

develops the applications with the objective ofaccounting the transaction based results and providing

the reports on the same.

The second objective is to provide a Querysystem for

assessment of the status on record, result or document.

The system provides on the spot screen display showinga status, such as stock of an item, balance of an account,

position of purchase order and so on.


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Third objective is to provide a sys tem of analysisofprocessed data revealing certain business trends or

results.It provides certain guidelines and norms for

strategic and tactical planning. The analytical information

provides support for decision making in the Decision

Support System (DSS). The analysis system providesinformation at all level for planning and execution of

business operations.

The fourth objective is to provide control information to

ensure that the business runs as per the plan, progresses

in a preset direction and achieves the goals.


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OLTP

SYSTEMRDBMS

DATABASE

APPLICATION

DEVELOPMENTSYSTEM

ACCOUNTING

APPLICATIONS

QUERY

APPLICATIONS

ANALYSIS

APPLICATIONS

CONTROL

APPLICATIONS

PRINT REPORTS SCREEN DISPLAY

STATUTORY

COMPLIANCE

KNOWLEDGE

UPDATE

OPERATION

UPDATEACTION

UPDATE

DECISION

ANALYSIS

Model of Information Processing System


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The control information is generated by using the standards,

norms, targets and budgets. The actual results are compared with

these entities and exceptions are highlighted. Whenever possible,the information is provided on the basis of feed forward control, i.e.,

providing early signal of probable adverse conditions or results.

The designer of business application focuses the development on

the aspect of accounting, querying, analysis and control.

The report generation is decided on the basis of certain business

information needs. The reports are designed for screen display or

for print. The contents of the reports are decided as per users of the

information. The frequency, duration and coverage of the report is

decided as per the user requirements.

A typical information system begins with OLTP System, uses

RDBMS for creation of Database, 4 GL for application developmentand SQL for querying and report generation. It uses program for

complex data processing and report generation. The information

system is designed on the principle of open system design,

providing flexibility and friendliness to the users of the system.


7/28Uncondit ion al Love is the divine bl iss 7

A typical information system primarily serves the needs at

function levels such as Personnel, Finance, Production,

Materials, Marketing and Corporate Business Management.These systems when integrated provide data and information

for business planning at the middle management level and

for strategic planning at the top management level.



Application of MIS inPersonnel Management

Personnel management function has the primary objective of

providing suitable manpower with certain ability, skills, andknowledge, as the business organisation demands from time

to time.

Its goal is to control personnel cost through continuous

increase in manpower productivity by resorting to the

following techniques.

1. Human Resource Development through training and

upgrading the skills.

2. Motivation through leadership and job enrichment.

3. Promotion and rewards through performance appraisal.

4. Grievance handling

5. Structuring the organisation



Input Transaction Documents

The various forms or documents which serve as inputs for the personneldepartment are listed as follows:

1. Personnel application form

2. Appointment letter

3. Attendance and leave record

4. Biodata, self and family

5. Appraisal form6. Production/Productivity data on the jobs

7. Wage/Salary agreement

8. Record of complaints, grievances, accidents

9. Industry data on wage/salary structure

10. Industry data on manpower, Skills, Qualifications.

11. Record of sources of manpower- University, Institution, Companies12. Record on manpower application trend in view of mechanization,

13. automation, and computerisation



Applications

The viewers of the database are personnel managers,

heads of the human resource development department

and top management.

Accounting

Following entities are accounted in the personnel management

system.

1. Attendance 6. Accidents

2. Manpower 7. Production data

3. Leave 8. Skills

4. Salary/wages, statutory deductions 9. Bio Data5. Loans and deductions 10. Family data



Query

Personnel management has queries as the following:

1. Who is who?

2. Strength of section, department, division.

3. Number of persons with a particular skill.

4. Attendance, leave and absenteeism record of all employees.5. Salary/Wage of employees.

6. Designations and number of persons holding these designations

7. Personal records of the employees.

The queries are processed with employee number, skill code,

department/division code as keys


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Analysis

1. Analysis of attendance by a class of employees.2. Leave analysis by a group of employees.

3. Trend in the leave record.

4. Analysis of accidents and types thereof.

5. Analysis of salary/wages structure.

6. Analysis of overtime.

Control

1. Probable absence versus workload.

2. Projection of personnel cost against manpower increase.

3. Assessment of accident records against safety measures taken.

4. Personnel cost versus Industry cost and its projection

5. Projection of manpower needs and evolving recruitment and

training programmes.


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Reports

The reports of the system will be used mainly by the Personnel

Department and the Top Management. Following is the list of reportsof different categories.

Statutory repo rts

There are some statutory reports which are to be prepared by the

personnel department of almost all the organisation.These are as follows:

I. Attendance record (Muster).

2. Strength of the employees by category-permanent, trainees, and apprentices.

3. Provident Fund, ESI Reports, Ledgers and Returns.

4. Accident Reports

5. Income Tax Form 16, 24A6. Strength of employees to Director General of Technical Development (DGTD)

These reports are submitted to the Provident Fund Authorities, ESI Authorities,

Income Tax Department, Directorate of Industrial Safety and Health, and

Labour Department.


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Information updates

1. Daily attendance report.

2. Employee strength.

3. Joining and transfers of the employees.

4. Personnel cost by department, job, product.

5. Periodical statements showing personnel cost by

salary/wages, overtime.

Operation update

1. Daily attendance to plan the workload

2. Overtime versus work completed.

3. Projected absenteeism and distribution of workload.

4. Cost of personnel by jobs or work completed.


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Decision analysis1.Analysis of attendance for season, festival and by skills, scheduling of the

jobs accordingly.2.Overtime analysis by department, employees and job to decide the strength

of personnel.

3.Analysis of accidents and deciding on safety measures and training.

4.Cost analysis by personnel versus jobs vs skills and planning for new

recruitment.

Action reports1. Recruitment and additional manpower or subcontracting of jobs.

2. Acceptance of orders on the basis of workload.

3. Reduction, transfer and reorganization of employees to control costs.

4. Preparation of training and development programmes with specific needs.

Most of these reports are used by people in operations management. The

information needs at the top management emerge when issues of controllingthe wage bill, entering into new agreement etc.

P l d HRMS M d l


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Personnel and HRMS Model

A li ti f MIS i


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Application of MIS inFinancial Management

Financial management function has a primary objective of meeting

the financial needs of the business, from time to time, by way ofproviding working capital and long-term capital to run the business

with the goal of containing the cost of capital at the minimum.

The second objective of financial management is to meet the

statutory compliance by way of declaring the audited financial

results, submit all reports and returns to the Government and Tax

Authorities and fulfill the obligations to the shareholders.

In meeting these objectives Financial Management uses variety of

tools and techniques as under:

1. Break Even Analysis 2. Cost Analysis

3. Cash Flow Projections 4. Ratio Analysis

5. Capital Budgeting and ROI Analysis

6. Financial Modeling 7. Management Accounting

8. Expense Analysis, Auditing and Control


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Input Transaction Documents

1. Payments : To suppliers, authorities, employees, shareholders, financial

institutions and others.

2. Receipts: From customers, authorities, employees, financial institutions

and others.

3. Data from Stock Exchange of the share prices, consolidated financial

results of the other companies, etc.

Transactions are payments and receipts and they are documented

through journal vouchers, bills, debit notes, credit notes, receipts

and transfer document. The payment and receipts are for a variety of

purposes and they are documented in typical formats suiting the

respective business enterprise.


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Applications

In financial management major application is the Financial Accounting

System, which accounts for the financial transactions of the companyand produces financial results for the company.

It produces balance sheet for the company where the performance of

the company is published in standard format prescribed by the

government. There are companies where fixed deposits and share

accounting are also part of financial functions.

The system is made so comprehensive that it not only collects databut also collects data on different matters such as job, department,

division and so on.

Due to versatility of the financial management system, it becomes a

repository of financial data which can be used in the other systems of

the enterprise.

It forms a basis for certain reports which are required by the top

management.

The viewers of the financial database are, finance managers,jcost

controllers, auditors, materials managers, marketing managers,

company secretaries and the top management.


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Accounting

The system accounts for all money transactions whichhave taken place, directly or indirectly, and which affect

the company.The financial management system accounts

typically for the following:

1.Sales 9. Income Tax

2.Purchase 10. Sales Tax

3. Salary/Wages 11. Excise Duty4. Inventory 12. Customs Duty

5. Expenses 13. Octroi and other Local Taxes

6. Capital Purchase 14. Consumption

7. Fixed Deposits 15. Budgets

8. Shareholder's Funds 16. Fixed Assets

Financial management accounting system provides a lot of

data and information which forms a valid database for other

applications in the business.


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Query

The query system throws light on the debit or credit balance of an

account. It shows the details or transactions which have resulted

into that balance.

The query is processed for the following with the respective codes

as keys.1. Main account

2. Subsidiary account

3. Location (Factory, Branch etc.)

4. Document (BiiIs, Credit note, Debit note, Receipt, etc.)

The query processes the transactions and shows the current

status of the reference such as Account, Document, etc..


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Analysis

Financial management calls for a number of decisions, based on theanalysis of the financial status of the company. The decisions fall in

all areas of financial management. The decisions are, borrowing of

short-term working capital, sources of finance, analysis of debtors

and creditors, and revision of credit terms, capital budgeting and

selection of investment alternatives, etc.

The applications which support the above decisions are:1. Cash flow analysis

2. Sources and uses of funds

3. Debtors analysis and aging

4. Creditors analysis and aging

5. Budget analysis

6. Ratio analysis and management norms7. Capital budgeting and ranking of investment alternatives

8. Cost analysis of various production inputs and alternatives


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Control

The cost of running a business increases, when the business does not

progress on a planned basis. The lags and leads in activities, delays in

completion of tasks and non-performance of certain business functions

give rise to additional costs eating away the margin in the business.The control is exercised, based on the exceptions found in the business

operations. Some exceptions are mentioned as follows:

1. Accounts receivables, outstanding beyond the acceptable norms.

2. Advances to creditors and non realisation of obligations.

3. Valuation of non-moving inventory for disposal.4. Analysis of non-moving accounts and legal actions.

5. 5. Shortage of funds in excess of planned and rescheduling of

activities, priorities.

6. Cost overruns beyond the norms and action on alternatives.

7. Performance analysis of lines of business showing adverse

performance leading to the decision-whether to continue or

discontinue the line of business.

Most of the control applications are based on the principle of feed

forward control where failure is sensed earlier and action is desired

immediately.


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Reports

A major portion of a financial management system is devoted to

the statutory reports and operations update. The top

management heavily relies on the reports source from the

financial management system.

Statuto ry repo rts

1. Tax Returns.

2. Registers: Sale Tax, Excise, Tax deducted at source.

3. Declaration of certain results to the financial institutions.

4. Declaration of financial results to the public every six months.5. Declaration of annual results to the Board, Shareholders and

Public within a stipulated time.


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Information updates

1. Monthly Trial Balance, Balance Sheet and Profit and Loss Account.

2. Stock Valuation.

3. Accounts receivables and aging.

4. Accounts payables and aging.

5. Expenses on major accounts.

6. Cash position.

7. Payments and receipts which are statutory obligations.

8. Sales, Purchase of assets by certain classification.

9. Overall business achievements in major lines of business.

Operations updates

1. Filing of statutory returns and reports.

2. Statutory payments such as Advance Tax, Sales Tax, Octroi, Excise

Duty, etc.

3. Transactions executed and accounted in the system.

4. Report on finished goods, dispatches and invoicing.5. Reports on material receipts and payments to the suppliers.

6. Obligatory payments such as rents, insurance premium, membership

fees, interest, and dividend.

If operations updates are satisfactory, the management can infer that

business transactions are taking place in order.


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Decision analysis

1. Break Even Analysis for cost and price decision.

2. Return on Investment Analysis for choice of investment.

3. Trend Analysis on price of selected commodities which playa crucial role in

business performance leading to decisions of alternative material,

supplier, change in product design, etc.

4. Cash now, sources and uses of funds, leading to control on expenses and

selection of alternative source of financing.

5. Analysis of current and fixed assets in terms of use and decision on

alternate use or disposal.

6. Analysis of current liabilities and decision on liquidation on priority basis.

7. Analysis of overdue receivables and decision on the revision of terms or

commercial and legal actions.


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Action Reports

Though decision analysis indicates the areas of decisions, action is takenin exceptional cases. Exception reports on implementation of the decision

and its impact on the business are listed as follows:

1. Overdue receivables

a. Legal action.

b. Termination of business association

2. Non supply of goods and services but advance paid.a. Legal action

b. Revision of terms

c. Termination of business association

3. Payments to creditors, where penalties are involved.

4. Poor usage of fixed assets and disposal.

5. Non-moving inventory of, say, more than two years and its disposal.6. Evolving new systems and procedures to control expenses and

implementation.

Finance Accounts System Model


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Finance Accounts System Model