# **MAU06 Management Information System**

## Unit 1 Chapter 02

### Strategic business objectives of information system

The strategic business objectives of information systems focus on the growing connection between how well a company can use technology, how effectively it can carry out its strategies, and how it reaches its goals. In other words, there’s a strong link between a company’s use of technology and its ability to achieve its objectives and goals.

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Strategic Business Objectives: Have you ever wondered why companies spend so much on information systems? It’s not just about keeping up with technology—it’s about reaching six key goals that can make or break a business. These goals are: running operations more smoothly (operational excellence), creating innovative products and services, building closer connections with customers and suppliers, making smarter decisions, staying ahead of competitors, and, ultimately, surviving in today’s fast-changing world. We’ll take a closer look at each of these goals in our next session.

Let’s start with operational excellence. This is all about making sure a business operates at its best. Imagine a company where everything runs like clockwork—no wasted time, no unnecessary costs, just pure efficiency. That’s operational excellence. It’s what keeps businesses on track, allowing them to avoid mistakes and stay profitable. In the end, it’s about being productive and competitive, which is essential in any successful business.


We need to consistently produce the best quality products or services in whatever industry we’re involved in. But in a rapidly changing world, that’s not enough. We also have to innovate—whether by creating new products, offering new services, or even developing entirely new business models. If we don’t stay competitive, we risk becoming irrelevant. Just think about how companies like Uber and Airbnb disrupted traditional industries. If you're not evolving, competitors can easily step in and push you out.

That’s why staying ahead is crucial. You must continually innovate and adapt. Building strong relationships with customers and suppliers—what we call "customer and supplier intimacy"—also plays a key role in staying competitive. And then there’s decision-making, which is at the heart of management information systems. The main reason we need information is to make well-informed decisions, and as a manager, making decisions is one of your most important tasks. From the moment you start work in the morning to the time you leave, you're constantly making decisions that drive the business forward.

> Good decisions benefit the business, but wrong or delayed decisions can hurt it. Sometimes, the timing of a decision is critical. Think about military leaders in battle—they need to make quick, precise decisions because delaying could mean losing the war. Similarly, in business, timing can make all the difference between success and failure.

Then there’s the competitive advantage. In business, competition is everywhere. We’re always competing to offer something better, faster, or more innovative than others. Finally, there's survival. As mentioned earlier, traditional industries like hotels and taxis are feeling the pressure from disruptors like Uber and Airbnb. To survive, they’ve had to rethink their entire business models and adapt to stay relevant. The interdependency between the organization information system.- You have business strategic objectives of an organization and you need network or internet. And finally, on the right extreme you have the hardware, software and data management. This is a simple model of how management information system works with organization and with the help of network and internet along with hardware, software and data management tools. Without any connection the things will not work. So, these three core elements; the organization, the information system which has three parts viz. hardware, software and data management. the hardware part, software, data management type equipments and then the internet or the network which is ubiquitous. We need the internet to do anything in the digital world.

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Improvement of efficiency to attain higher profitability; is very ok, logical and very understandable that improving of efficiency is required to attain higher profitability. And information systems technology is an important tool in achieving greater efficiency and productivity. So, why do we use MIS? Because it is an important tool in achieving greater efficiency and productivity. Now, take a look at some of the use cases and case studies for example, Amazon, Flipkart, Alibaba, etcetera from an operational excellence perspective. I mean they are very efficient as you know. You place an order it takes just few minutes. You save the selected item and put it in the cart, pay the money and then they tell you, you will get it in 3 days. And you get it in 3 days, it comes and then you accept the product or even if you want to send it back or return, etc. So, the whole thing is operationally very smooth and you know we call this as operational excellence. Now, how do they do it? They do it basically because they have got an excellent information system at the backend and that is how they get all the information. So, from starting from the time you start searching for a product, they are recording everything, all your clicks, etcetera, which type of product you are searching . So accordingly they will advertise and push advertisement etcetera. And then when you put in cart and then they will give you certain offers like Amazon prime etcetera, and you accept, not accept, you place order. They get the money, you use credit card, UPI or whatever. But the whole thing I mean it just goes on in a jiffy to really say that and you do not feel anything. Sitting in your room ,in your home, you can buy virtually anything and it comes in the time whatever the time they promise it comes, 7 days, 7 days, 3 days, 3 days. And then they say there is a pick up for return in 2 days, they come and pick up in 2 days in case you reject the item.


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So, information systems and technology is a major enabling tool for new products and service business models. So, we call it as an enabler. So, because there is MIS, they could deliver this, do this business. How Amazon is being able to run their business?
Because they are depending heavily on their information system. Without information system you cannot run such digital business. So, you need that environment, the digital ecosystem, the digital platform and the digital mind set and now the digital culture to run such companies.
Examples are say **iPad, Google’s Android OS and Netflix.** So, these are all you know is giving you so much power from your phone which is android driven or iOS driven or whatever. Let us take android; I mean you can do so many things from your phone set. So, it is as simple as that. With your simple phone set you can do, you know, so many activities. All your apps are here in your phone. So, that is the power which information system is giving you.

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Now, customer and supplier intimacy. Customer is of course, as we say is a most important component of a business because if you do not have a customer you do not have a business, very simple. So, serving customers well leads them to return , thus increasing revenue and profits. You want a customer to come back, right, so if I have sold him or given a service you expect that he will come back because he has either liked my product or he has liked my service.

> So, what is happening? And, example is that in high-end hotels. This is a very interesting example that use computers to track customer’s preferences and then monitor and customize the environment. See, even when you do any web surfing somewhere your data is getting collected by somebody, that is why we say this nowadays there is no privacy. Everything we are doing on the web is getting captured somewhere as a data may be by Amazon, may be by Google or somebody.

Similarly, when you visit a hotel, you stay in hotel, hotel business traveler, I mean he has preferences, what he is ordering, what he is liking, etcetera, is being captured through cameras etcetera and these phone calls and then he is ordering food etcetera. What type of food he is ordering gets recorded. Now, all that information is getting captured, converted into information and being informed to the management that this particular customer likes these things. So, next time when he comes, you give him proactively those things. Like in his room he likes a probably a yellow color or whatever. So, you give him a room which has got yellow curtains sort of things like that, furnishings. So, that becomes you know pleasant surprise for him. He likes that. So, that is called customer delight. So, what you have done with information is that I am giving you customer delight, so that that customer will become my regular customer and he will come back. So, that is what the entire business is all about; so, how can I make my customer come back. I will get a repeat business. So, that is an essence of a successful business model. Now, intimacy with suppliers and this allows them to provide vital inputs which lower cost. Like you know say Maruti for example, making cars. There lot of things are supplied by the vendors. And the Maruti purchase people , the vendor department they work very closely with the suppliers, so that you know, when you develop new technology, you develop new product and they ensure you that they give you good quality because you trust them. So, you work with them, you help them, you solve their problem, go to their shop floor find out what is the problem because end of the day you want that the product they supply, the components they supply for your car should be defect free because if their components are good quality your car will be of good quality. If their components are of not so good quality and you put it in your car after some time that car will have problem. The gear box will have a problem, or the battery will have a problem something like that and your customer will complain that your car is not good. But finally, you know you do not make as the battery was made by somebody else.

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**Improved decision making**: Of course, it is obvious because without accurate information, managers must use forecasts, best guess, luck etcetera, because you need **information**. Like, a manager I had said right in the beginning without information , one cannot take a decision.
So, obviously, to improve decision making you need better quality of information. So, your quality of data and the quality of information should be better, so that you can take proper decision in your business operations because a decision making can result in over production or under production. As I told you it could be a, right decision or it could be a wrong decision, mis-allocation of resources, poor response times, these are what inefficient things can happen without an accurate information. If your information quality is not good then you can do mistakes. Your decisions may not be the best decision. So, when you do not take a best decision means things can happen, you can be doing misallocation of resources, you can make a loss, etcetera, and poor outcomes you know raise cost , lose customers, etcetera. So, all the negative things and bad things of a business happen without an accurate information. So that is why it is so important to have accurate information which you need for high quality decision making.

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**Competitive advantage**: Delivering better performance obviously, I mean you have to keep on improving day on day, otherwise your competitor will catch up and sometimes you will find that you are losing out. So, we have to keep on improving our performance. We have to keep on improving every day, every month and we have to come up with new products etcetera, etcetera. Charging less for superior products, so making it cost competitive. So, nowadays people customers are very price conscious. So, they always look out for discounts. You also know that we look out for discounts when we go to Amazon and Flipkart. We go on studying who gives a discount etcetera. We are always looking for discounts. We are very price conscious and price sensitive. So, that is where again you need lot of information because information will help you to you know gauge, how much discount you can give. Responding to customers and suppliers in real time: How fast you can respond? See, customer wants the product now, so he clicks and you know it should be available: so, to say yes or no but physically you may not be there, but it has to be handled through your information system. So, you have a product catalogue. You have a product catalogue, from which the customer selects the product. If the product whether it is there in stock or not will all depend on the backbone of the information system which you have in your organizations something called a for example, an ERP system (Enterprise Resource Planning) which we will talk about much more in details in subsequent lectures. So, it is very important to have a backend system for getting these information. However, not today, next lecture I will talk more in details about ERP (enterprise resource planning). You can see how customer responses is such a vital thing and is being handled by a software product which is a very essential part of information system, a very core of information system. So, competitive advantage examples again Apple, Walmart, UPS, Airbnb, Uber, OYO, etcetera. Again, these names keep coming up again and again because these are the companies which have in the last few years shaken up the entire business world.

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**Survival** : Information technology as necessity of business. Means
without information technology business will not survive that is for sure, very simple. Governmental regulations requiring record-keeping: Say examples like Toxic Substance Control Act, etc. There are lot of compliances, we know financial, statutory, environmental, income tax, GST records, say everywhere it is information and without this information, I mean you know the business cannot run.
The whole government machinery, the tax collection, GST everything runs on computer systems, i.e. information system, otherwise it is not manually possible for such a big country with so large population to run its policy and decision affairs. So, that is a part of survival. So, any organization, any complex thing to run, you have to have a information system, without that you cannot run a large complex organization, be it government, be it an industry, be it a service sector, anything. Now, if we will take the current pandemic situation, it is forcing organizations to work differently, for example, working from home, to survive. I brought it here because for surviving, like our education system today, you know to complete a course today we have to take lectures from home and students will have to attend lectures from their home otherwise the semester could not be closed, the annual examinations could not be held. So, we have to work from home. So, that has become a survival issue for the entire education sector.

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# Types of Information System
An information system is a set of interrelated components that works together to collect, process, store and breakdown the information to support decision making.


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# Functionality of Information system in Organiztion:
1. ### Transaction processing System
1. ### Descision Support System
1. ### Management Information System
1. ### Executive Support System

## 1. Transaction processing System:
A transaction processing system (TPS) is a type of information system that collects, stores, modifies, and retrieves the data transactions of an enterprise.

TPS helps to handle the day-to-day business activities that require quick and reliable processing of data for the received and conducted transactions. It’s necessary to process customers’ orders correctly, update inventory, and credit a seller’s account. There’s a subset of TPS known as Online Transaction Processing (OLTP) which deals specifically with online banking transactions.

**Important:** It’s essential not to confuse transaction processing systems with any form of payment processing payment flow, which is intended for the actual handling of transactions via banking routes.

From a certain point of view, TPS is a form of data management, information-processing software that doesn’t directly participate in handling transactions, but only retrieves and manages customer and business data.

Data from TPS is examined during compliance and security audits. It’s also utilized to enable reporting for Business Intelligence (BI) forecasting as well as for and higher-level trend examination.

**Examples of Transaction Processing Systems**
Let’s take a look at some of the examples of real-life TPS systems used in different businesses:

**1. Banking ATMs**

Automated Teller Machines (ATMs), that handle bank transactions, including cash withdrawals and balance inquiries, must utilize TPS. Using TPS, an ATM verifies the user’s identity, retrieves account information, updates the account balance, and dispenses cash, all in real-time.

**2. Stock exchanges**

Complex TPS helps to function financial solutions, such as stock exchanges like the New York Stock Exchange (NYSE). These systems facilitate trades by ensuring order matching between buyers and sellers, updating stock prices based on transactions, and electronically settling trades in real time.

**3. E-commerce platforms**

TPS constitutes a major functionality of e-commerce businesses like Amazon and eBay. When a customer places an order, the TPS handles multiple tasks, including verifying payment details, checking inventory levels, updating stock quantities, and generating order confirmations.

**4. Healthcare management systems**

In healthcare settings, especially in telehealth, TPS participates in managing patient records and billing. It ensures that billing is processed correctly, streamlines operations, and reduces possible errors.

It can be concluded that TPS is necessary at all times when a business receives or makes payments and refunds, to ensure that orders are processed correctly and no discrepancies are possible.

**Four components of a transaction processing system:**

For both batch processing systems and real-time systems, a transaction processing system (TPS) can be divided into four main components.

**Inputs**
Any number of transactions—including invoices, bills, coupons and other types of orders like a purchase order—may be treated as inputs in a TPS. Theoretically, any type of order entry can be considered input data.

**Outputs**
A TPS can generate a variety of use-case-specific outputs ranging from cash flow reports to receipts, and it can be utilized for record-keeping, data analysis, tax reporting and other official business purposes.


**Processing system**
The processing system of a TPS reads the input, completes any data modifications or updates, and creates a useful output, such as a confirmation of sale or inventory report.


**Storage**
While storage may, in some cases, refer to physical data storage hardware, an average TPS will also create easily navigable directories for storing both input and output data, typically in some form of database.


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## 2. Descision Support System:

A decision support system (DSS) is a computerized program used to support determinations, judgments, and courses of action in an organization or a business. A DSS sifts through and analyzes massive amounts of data, compiling comprehensive information that can be used to solve problems and in decision-making.
Typical information used by a DSS includes target or projected revenue, sales figures or past ones from different time periods, and other inventory- or operations-related data.

> KEY TAKEAWAYS
A decision support system (DSS) is a computerized system that gathers and analyzes data, synthesizing it to produce comprehensive information reports.
A decision support system differs from an ordinary operations application, whose function is just to collect data.
Decision support systems allow for more informed decision-making, timely problem-solving, and improved efficiency in dealing with issues or operations, planning, and even management.

**Understanding a Decision Support System (DSS)**
A decision support system gathers and analyzes data, synthesizing it to produce comprehensive information reports. In this way, as an informational application, a DSS differs from an ordinary operations application, whose function is just to collect data.

The DSS can either be completely computerized or powered by humans. In some cases, it may combine both. The ideal systems analyze information and actually make decisions for the user. At the very least, they allow human users to make more informed decisions at a quicker pace.

**Using a DSS**
The DSS can be employed by operations management and other planning departments in an organization to compile information and data and synthesize it into actionable intelligence. In fact, these systems are primarily used by mid- to upper-level management.

**For example**, a DSS may be used to project a company's revenue over the upcoming six months based on new assumptions about product sales. Due to a large number of factors that surround projected revenue figures, this is not a straightforward calculation that can be done manually. However, a DSS can integrate all the multiple variables and generate an outcome and alternate outcomes, all based on the company's past product sales data and current variables.

**Characteristics of a DSS**
The primary purpose of using a DSS is to present information to the customer in an easy-to-understand way. A DSS system is beneficial because it can be programmed to generate many types of reports, all based on user specifications. For example, the DSS can generate information and output its information graphically, as in a bar chart that represents projected revenue or as a written report.

As technology continues to advance, data analysis is no longer limited to large, bulky mainframe computers. Since a DSS is essentially an application, it can be loaded on most computer systems, whether on desktops or laptops. Certain DSS applications are also available through mobile devices.

The flexibility of the DSS is extremely beneficial for users who travel frequently. This gives them the opportunity to be well-informed at all times, providing them the ability to make the best decisions for their company and customers on the go or even on the spot.

**What Is a Decision Support System Used for?**

In organizations, a decision support system (DSS) analyzes and synthesizes vast amounts of data to assist in decision-making. With this information, it produces reports that may project revenue, sales, or manage inventory. Through the integration of multiple variables, a DSS can produce a number of different outcomes based on the company’s previous data and current inputs.

## 3. Management Information System:

Management information systems (MIS) is the study and application of information systems that organizations use for data access, management, and analytics. For MIS to be effective, you must understand and carefully map out business processes. Data must be accurate and timely, and hardware and software must be able to store and manipulate it.

A good MIS depends on the people who design, implement, and use it. If you're considering a career in management information systems, learn about the major, the skills you need, and the various job roles.

**What is a management information system?**

An MIS is a system that provides managers with the necessary information to make decisions about an organization's operations. The MIS gathers data from various sources and processes it to provide information tailored to the managers' and their staff's needs.

While businesses use different types of systems, they all share one common goal: to provide managers with the information to make better decisions. In today's fast-paced business environment, having access to accurate and timely information is critical for success. MIS allows managers to track performance indicators, identify trends, and make informed decisions about where to allocate resources.

**Importance of management information systems for businesses**
MISs allow businesses to have access to accurate data and powerful analytical tools to identify problems and opportunities quickly and make decisions accordingly. A management information system should do the following:

* Provide you with information you need to make decisions
* Can give you a competitive edge by providing timely, accurate information
* Can help you improve operational efficiency and productivity
* Allows you to keep track of customer activity and preferences
* Enables you to develop targeted marketing campaigns and improve customer service


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## 4. Executive Support System:
An Executive Support System (ESS) is a type of decision support system designed to assist high-level executives and decision-makers in an organization. It provides access to key data, critical analyses, and strategic information to aid in decision-making processes. ESS typically includes user-friendly interfaces and visualization tools, aggregating data from multiple sources to help executives identify trends, monitor performance, and gain insights for strategic planning.

> Key Takeaways
> An Executive Support System (ESS) is a software solution designed to provide senior management with easy access to vital business information to facilitate effective decision-making.
> ESS typically consolidates data from various sources, delivers relevant insights, and presents the information through interactive dashboards and visualization tools, which allows executives to analyze trends and identify opportunities effectively.
> The core benefits of implementing an ESS include improved efficiency, better communication, and enhanced decision-making, thus enabling executives to devise and execute strategic plans that align with long-term organizational goals.

**Importance of Executive Support System**
The technology term “Executive Support System (ESS)” is important because it is a comprehensive decision-making tool designed specifically to assist top-level executives in planning and managing various aspects of their organization.

ESS streamlines access to crucial information by collecting, analyzing, and summarizing data from a wide range of sources, enabling executives to make well-informed decisions swiftly.

Executive Support System (ESS) is a robust technology widely implemented by organizations to refine their decision-making processes, particularly among senior management. The primary purpose of an ESS is to streamline data access and facilitate the rapid analysis of key information to enhance managers’ ability to formulate effective strategies, drive organizational growth, and make informed decisions.

By amalgamating relevant information from internal and external sources, ESS allows higher-ups to develop valuable insights and stay abreast of current trends and industry developments. It equips them with the tools needed to analyze time-sensitive data and perform simulations to ascertain the likelihood of success for various strategies and initiatives.

In addition, Executive Support Systems provide comprehensive data visualization capabilities, enabling top brass to interact with complex information in a user-friendly manner. This ensures that valuable insights can be swiftly identified and recognized, allowing executives to remain agile and adaptive to the ever-changing business environment.

In essence, ESS systems render these executives as forward-thinking visionaries who are well-versed with their organization’s needs and future growth potential. Ultimately, with its considerable advantages in decision-making efficiency, data analysis, and visualization tools, the Executive Support System stands as a linchpin in optimizing business operations and upholding any competitive advantage on an organizational level.

Executive Support System
By Editorial Staff
Last updated - May 5, 2024
Definition of Executive Support System
An Executive Support System (ESS) is a type of decision support system designed to assist high-level executives and decision-makers in an organization. It provides access to key data, critical analyses, and strategic information to aid in decision-making processes. ESS typically includes user-friendly interfaces and visualization tools, aggregating data from multiple sources to help executives identify trends, monitor performance, and gain insights for strategic planning.

Key Takeaways
An Executive Support System (ESS) is a software solution designed to provide senior management with easy access to vital business information to facilitate effective decision-making.
ESS typically consolidates data from various sources, delivers relevant insights, and presents the information through interactive dashboards and visualization tools, which allows executives to analyze trends and identify opportunities effectively.
The core benefits of implementing an ESS include improved efficiency, better communication, and enhanced decision-making, thus enabling executives to devise and execute strategic plans that align with long-term organizational goals.
Importance of Executive Support System
The technology term “Executive Support System (ESS)” is important because it is a comprehensive decision-making tool designed specifically to assist top-level executives in planning and managing various aspects of their organization.

ESS streamlines access to crucial information by collecting, analyzing, and summarizing data from a wide range of sources, enabling executives to make well-informed decisions swiftly.

By integrating data from internal and external sources, ESS offers a holistic view of the organizational landscape and supports strategic planning, forecasting, and problem-solving.

In essence, ESS empowers executives to make efficient and effective decisions, which ultimately leads to improved organizational performance, adaptability, and competitiveness in today’s fast-paced business environment.

Explanation
Executive Support System (ESS) is a robust technology widely implemented by organizations to refine their decision-making processes, particularly among senior management. The primary purpose of an ESS is to streamline data access and facilitate the rapid analysis of key information to enhance managers’ ability to formulate effective strategies, drive organizational growth, and make informed decisions.

By amalgamating relevant information from internal and external sources, ESS allows higher-ups to develop valuable insights and stay abreast of current trends and industry developments. It equips them with the tools needed to analyze time-sensitive data and perform simulations to ascertain the likelihood of success for various strategies and initiatives.

In addition, Executive Support Systems provide comprehensive data visualization capabilities, enabling top brass to interact with complex information in a user-friendly manner. This ensures that valuable insights can be swiftly identified and recognized, allowing executives to remain agile and adaptive to the ever-changing business environment.

In essence, ESS systems render these executives as forward-thinking visionaries who are well-versed with their organization’s needs and future growth potential. Ultimately, with its considerable advantages in decision-making efficiency, data analysis, and visualization tools, the Executive Support System stands as a linchpin in optimizing business operations and upholding any competitive advantage on an organizational level.

**Examples of Executive Support System**
Executive Support Systems (ESS) are tools designed to provide senior-level management with easy access to key organizational information and support strategic decision-making.

**Healthcare Industry**: In a large hospital, an ESS can help top-level executives make strategic decisions regarding resource allocation, patient care quality, and overall operational efficiency. The system may analyze data from patient records, department performance, financial information, and more to provide insights on areas that need improvement, cost-saving opportunities, and trends in patient care. As a result, executives can develop strategies to achieve organizational goals while maintaining high patient satisfaction levels.

**Retail Industry**: A global retail chain can utilize an ESS to track sales, inventory, customer data, and market trends across multiple stores and regions. This enables top-level management to make informed decisions on store expansions, product offerings, pricing strategies, and promotional activities. In response to shifts in consumer behavior or market conditions, the ESS can help identify opportunities for improvement and support the development of effective business strategies.


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## Roles & use of Information System in your organization
The information system is vital for any organization be it for survival or to keep up with the competition or to even get ahead of it in the current age. We can find a small family-owned restaurant to a fitness gym all making use of the information system in some way for their business. Bigger cooperation makes use of such technologies to bring innovation and get ahead of the competition. Decision making, operational management, customer interaction, collaboration on teams, strategic initiatives, and individual productivity are the six major roles of information systems in an organization. The the following discussion post looks into two of those roles relating to Often Serious Technologies. Information System (IS) helps in the decision-making process by providing business intelligence which can be used to analyze and understand the current trend, user habits and a lot more. This also helps counter the decision-making pattern of managers and executives based on their gut feeling alone. IS helps make informed decision and strategies for better success rate. Relating this scenario to my current working environment, the organization I’m with heavily uses IS for decision making purpose. The use of data generated by the information system in place is used as a medium to get the knowledge and warn general people along with the government about the risk level of water in rivers. The system analyzes the level of water to do so. Also, rather than playing a guessing game on the amount of rainfall, the organization has placed stations around Nepal and in other country offices on the amount of rainfall on a particular day in collaboration with its partners. That helps analyze the information and make concentrated strategies for agriculture(crop harvest cycle). Aside from that, there is a magnitude of usage within the organization for decision making including for formulating web and social media strategies by analyzing user pattern, identifying the need of a new project/initiative, GIS analysis and much more.

> Information System has opened a whole new world by enabling people and organization to collaborate with teams from any part of the world. With tools like Skype, Office365, TeamViewer and even the power of self-developed systems, teams can now communicate and collaborate on projects while discussing, sharing files, remotely access the desktop to name few actions from anywhere. Again relating this point to the organization I’m at. The organization has its head office in Nepal but presence in some way in other country offices. Many staffs are often on travel thus the collaboration aspect becomes significant. Skype is often used to have a meeting and discussion with remote staff or when someone is on travel and need to discuss something. Along with that, SharePoint platform is used to build the intranet which houses most of the organization information that is to be shared internally. Office365 is used for collaboration while editing documents. This is of significance as anything going out of the organization need to go through an editing process to ensure quality. Going back and forth on the document via email or in-person is tedious and time-consuming so rather a system is built such that the editor and the writer can seat together virtually to ensure that the quality is met. So, the information system enables collaboration between teams to ensure that the organization can conduct meetings, share document, interact virtually and even work remotely to ensure that the crucial organization function can be performed from anywhere and anytime.

In order to achieve strategic objectives, there is no substitute for right information at right time in any business, be it multinational companies, small businesses, non-profit organizations, government agencies, volunteer organizations, self-employed entrepreneurs, universities and colleges or any institutions. So these organizations use information systems to ensure the availability of required information at right time and place. Information system is the combination of people, technology, hardware, software, networks, policies and procedures that aims on storing, retrieving, transforming and disseminating the information within and outside the organization

**1. Decision making**
In an organization or business the managers need to make decisions all the time. The decision must be backed by quality judgment of the situation and its implications. Data collected, compiled and presented in a simple way helps managers understand the position of the organization and take appropriate decisions. For example the final report of a company shows the companies sources of funds and it applications for return. If there is more source of funds available then the manger has to find good investment opportunities. Similarly restaurants can see the most ordered dish and beverage which helps the manger to promote it more. Information system assists the managers or staffs at decision making level to make the best possible decision in given circumstances by providing relevant information. It depicts past trends, patterns and scenarios. The analysis of historical information is helpful in predicting future and making more rational decisions. The business intelligence system is used for decision making purpose that helps the managers to utilize the information collected from external and internal sources for the benefit of the organization. The information system makes sure that the decisions are data driven for longevity and prosperity of the organization, not based on the gut feelings or assumptions of the decision maker.

**For example:** I work in an organization that provides health care at home. On daily basis, we need to make decisions regarding the placement of nurses. The information system facilitates this process by providing the list of nurses who are occupied and those who are available for duty. The decisions regarding the increment in salary and other benefits, purchase of logistics, discounts provided to clients are also backed up by the information system.

**2. Operations management**
Information system is used to manage every day operation in an organization such as employee monthly salary, taxes, attendance, leave records, record income and expenses, receivables, procuring goods and inventory management to name a few. (Wallace, 2015) Daily tasks or operations management to keep records or follow up on supplies, creditors, and inventory is made easier with the help of IS. For example software used by IME money transfer helps people to send money from one place to another, department stores such as Bhatbhateni, big mart use software to track their stock and keep record of daily transactions.

**3. Customer interactions**
IS also helps in customer interaction. Few forms of customer interactions based on IS that I use are ATM machines, recharge card in mobiles, monthly bill or registering complains in the Nepal Telecom etc. Thus the implication of the use of IS for customer interaction is gaining more popularity. With online shopping in hamro bazar, sasto deal, flipcart etc. are some of the more successful organizations that have used IS for customer interactions.

**4. Collaboration on teams**
IS has made the world a smaller place. With connectivity available communication has increased a lot. People can conduct meeting from different countries through skype. Friends and family members can keep in contact through facebook, celebrities and even head of states can reach out to the general people through the use of Twitter. IS has made this possible.

**5. Strategic initiatives**
IS helps in taking strategic initiatives for competition in the market. For example here in Nepal, NCELL a private company had to face NTC, owned by the government, as a competitor. It was very difficult to get a sim from NTC. People waited in line whole day to get a sim card. NCELL provided sim cards in every small cyber shops. In addition various facilities like Rs. 20 loan, mms, call recording, 4G etc. were provided by NCELL. This increased its hold in the telecommunication market.

**6. Individual productivity**
Productivity is highly increased by IS but the user should be able to understand its effectiveness. For example excel is very useful for accountants and finance personnel but there are a lot of features in it. If people do not understand these they cannot make full use of it. Another example is our own Westcliff GAP website. Students login, have option to do research with LRIN, post assignments, track grades etc. This has made it very easy and increased individual productivity in this MBA course.

**7. Customer Interactions**
Information system provides means to interact with the customers that helps in customization of the services and relationship building. Customers look for the platform where they can provide feedback to the company, share about their experiences with the organization and its products and find assistance from the company in problem solving. It is made possible through the use information system. Information system makes it easier for the customers to reach to the company through web-based front services and online self-service. The increasing use of social media is also helping in this.

The chat bot is the most common example for this. These days almost every organizations have chat bot in their website where the customers can request for information, ask questions or clarify their doubts by interacting with the system. They will get reply within few hours that may or may not be automated.

In addition to these, the information system also plays significant role in operations management, collaboration on teams, strategic initiatives and individual productivity. It aims on maintaining efficiency, reducing costs and maximize profit through the use of available information.

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# Questions realted to unit 1

**What is MIS?**

**Q1.** What is the purpose of an MIS?

**Q2.** What is the core principle of MIS?

**Q3.** What are the levels of information requirements in an MIS?

**Q4.** What are the levels of decision making in MIS?

**Q5.** What are the elements of decision making in MIS?

**Q6.** What are the advantages of MIS in a business?

**Q7.** What are the different approaches used in designing an MIS?

**Q8.** What strategies do you follow to successfully apply management information systems to a business?

**Q9.** Describe some common challenges in the MIS implementation.

**Q10.** Mention some popular methodologies necessary for implementing MIS in a company.

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