Designing Management Information Systems

Designing a MIS using the Merise Method

Merise is a systemic design method, which has a matrix structure:

Views
Levels
Communication Data Process
Conceptual CCM CDM CPM
Conceptual Conceptual Conceptual
Communication Data Processing
Model Model Model
Logical or LCM LDM LPM
Organisational Logical Logical Logical
Communication Data Processing
Model Model Model
Physical or PCM PDM PPM
Operational Physical Physical Physical
Communication Data Processing
Model Model Model

Level Concern
Conceptual What do you want to do
Logical or Who does what, where, when, how
Organisational
Physical or By what means
Operational

Obiectives of MIS

The objectives of MIS are immediate and long-term goals to improve activity of the
company, to improve leadership activities to raise the level of information timely for
organizational structures, to improve methods and technical processes and management
information for ensure maximum efficiency of the beneficiary company.
System objectives require solving problems with synthetic character in a systematic
manner using IT support. These objectives have general and specific characteristics that
depend on the legal and regulatory framework, endowment with computers and
economic development requirements of the company

These objectives can be grouped into the following categories:

- management objectives, aimed to restoring permanent economic assets, development
of management activities to ensure a global optimum of all activities, fundamnnting the
management decisions, strategic, tactic and operational decision based on information
obtained as a result of processing system, relieving routine management's decision-making
 Designing Management Information Systems

processes;
- functional objectives, fundamentally dependent on the specific company activity.
Exemple:
MIS objective for banking activity:
- opening bank accounts;
- opening and update bank deposits;
- Payment and Settlement in RON or foreign currency;
- granting and reimbursement of bank loans;
- closing a banking day.

Inputs and outputs of MIS

For each type of business and management or operational objective are identified
outputs and inputs of MIS. For this purpose we take into account various criteria:
- the specificity of the company;
- the information requirements of the management of the institution or of the
functional departments;
- managerial and functional objectives of MIS;
- the legislation, rules and regulations issued by the Ministry of Finance;
- the demand for measuring amplitude and dynamics of financial and monetary
phenomena.
Inputs and outputs of a standard MIS are established and according to the
specifications of CCM were used to determine the types of entities, relationships and
attributes of CDM.
Inputs are reflected in MIS through the documents, while outputs are presented in the
MIS output reports.

Conceptual designing
Conceptual Communication Model (CCM)
CCM provides a graphical representation of the process under computerization.
An incomplete or erroneous image/operation will result in errors in function of the the
final product.
CCM must meet certain rules:
- meet standards and legislative requirements;
- comply with company regulations and procedures (internal regulations, job
descriptions);
- detail the whole process, from the onset until the last specific elements

CCM uses actors and information flows.

Actors can be internal or external actors actors (belong to the internal or external
structure of MIS).
In the frame of economic activity, internal actors are identified with the institution or
department (eg. credit inspector, account officer, director, accountant).
 Designing Management Information Systems
External actors may be corresponding monetary-financial institutions, banks, NBR,
insurance companies, private customers or companies.

Sometimes, due to the developing business activity, it is possible that an external actor
to become internal actor.
Exemple:
The brokerage companies had the role of customer (external actors) at a certain time,
which enters in relationship with the bank in settlement process. With the development of
brokerage exchanges, the company is assimilated/absorbed by the bank, become entity
within the financial group and will be treated as internal actor. In this case, it is necessary
to adapt the flow of documents of the brokerage company/department to the flow of
bank documents.

Players change information as information flows.

The flow diagrams are graphical representations that reflect the links between actors.
Typically, these flows are translated into input-output system documents, or to/from
subsystems. Documents can be standardized or non-standardized.
In terms of use of different messages between actors is better to associate its formal
documents. Such documents may be accounting notes, internal memos or notices. The
importance of these documents is that it can reveal the stage reached in the development
process and, in the same time, it can be determined the responsibilities especially when
malfunction occurs.

The information flows are represented in the form of arcs directed from issued actor
to destination actor. The arc using a numeric notation, which correspond to the sequence
encoding processes and documents, as objects of the information flow.
Making CCM can be considered as an iterative process if the analyzed economic
phenomenon is complex. Thus, CCM developed in the first phase globally can drill
several core activities of CCM for financial and banking unit.
CCM creates fully premises to realize a correct conceptual processing model (CPM).
Example: CCM for credits/loans.
Detailing of financial flows is as follows:

1 – agreement client-bank guarantor 5 – file for approval

/endorser for endorsement credit
agreement
2 – credit demand
3 – credit file documents
4 – credit analysis report
9 – contract signed
10 – withdrawal document + cash
11 – withdrawal document signed
12 – payment document + cash
6 – analysis + final decision
7 – credit file returned to credit
officer
8 – opening an account and credit the
account
13 – payment document + signature
14 –payment document + cash
15 – payment document + signature
 Designing Management Information Systems

Giranti
1 2 Servicii credite 8
3

14
6

Client 5 7
15
6
13 10
12 11

Comitet de acordare
Casa a creditelor

If the financial and monetary system is highly complex, but are relatively independent
functional modules, these modules can be treated separately at the conceptual level and
connect modules within a single application finally.

1.1.1 Conceptual Data Model (CDM)

CDM sets out the conceptual entity types, their attributes and associations required for
MIS, no matter of storage data devices and the data access mode.

Methods of determination for CDM:

a) The input-output method

This method ensure the inclusion of the properties/attributes in the CCM depending
on objectives of MIS taken from the input system/documents, independent of the system
outputs.
After the analyzing of the information content of the input document it will set the
attributes of the new system.
This method is bet to best used for open systems. It enables further processing and
determining a set of parameters that are not sufficiently analyzed in the early stages of
MIS analysis. But we must not exaggerate the creation of sets of input variables that will
not be processed and will take up the system resources.

b) The output-input method

The method starts from MIS outputs (indicators, reports) in relation to the objectives
of the system and follows to determine the set of attributes. This set will contain
attributes based on algorithms and elementary/uncalculated attributes.
 Designing Management Information Systems
This method is used if we have limited resources in terms of collection, storage and
data processing. This fact will cause a minimum but sufficient number of input variables
which will ensure, through processing , the output parameter determination. Such a MIS
is easier developed in steps further, due adequacy of input variables.

c) The mixed method

The method will determine the set of attributes used for both incoming and output of
the system based on input documents, output of the new system (indicators, reports and
outputs to other systems) correlated with the objectives of the MIS.
This set will contain elementary attributes, calculated attributes and mathematical
operands. Thus, these attributes will be included in the type of entities and properties.
This method ensure the optimum among the set of input variables that need to be
processed in order to achieve output variables and situations. MIS can be developed into
a simple way, the unused input variables providing good information support.

The conceptual data modeling includes the following steps:

a) Determination of the basis of attributes;
b) Establishing conceptual entities in the MCD;
c) Determination the associations between conceptual entities in MCD;
d) Establish cardinality for associations.

a) Determination of the basis of attributes

Study the information structure of specific inputs and outpus of MIS, in terms of
semantics, type, maximum length, the methods of calculation. It will be present the
calculation algorithm and primary operands needed for each type of attribute.
It will be determined the attributes of entities based on primary documents from
which information flows were found in CCM.

The attributes will be encoded respecting following requirements:

- unique codes - establishing a unique symbol for each attribute of the information
database;
- stability codes - use a single type of code to describe an attribute on the lifetime of
the system;
- usability codes - codes must be easily understood and applied;
- brevity codes - is given by using an adequate number of characters (minimum but
enough).

b) Establishing the conceptual entities in CDM

The attributes defined for database attributes (the attributes dictionary) are grouped
into conceptual entities complying with normalization.
Grouping is done taking into account different criteria:
- grouping attributes can be done based on documents (payment or withdrawal, credit
contracts);
 Designing Management Information Systems

- grouping attributes can be done based on their significance, for example, based on
classifications (types of deposits that can be opened, types of loans that can be granted).

The attributes used by MIS are of two types: taken or compound.

The taken attributes are in the same form as they are in the primary documents. The
compound attributes comply the calculation algorithms and do not occur in conceptual
entities. The algorithms will be detailed up to the level of primary operands.

The attributes that occur in the conceptual entities must comply with the following
rules:
- the attributes will have a unique name to describe the properties while running the
application;
- the taken attributes occur in conceptual entities only;
- the attributes are elementary; the compound attributes are decomposes up to
elementary attribute level;
- the same attribute can not occur in two different conceptual entities;
- the list of attributes must be non-redundant and without synonymous or
homonymous attributes.

It can be set certain restrictions to the atributes reffered to their evolution, the field
values that can be taken (range or list). These conditions of validation can be classified as
simple, compound, static and dynamic, local or global, depending on variables
(static/dynamic).

The simple conditions are determined by the nature of attribute, range/list of values
etc.
Exemple:
ID_cli<>” “;
No_doc>0; date_doc>={01.01.2013};
type_currency ={LEI, USD, EUR,YEN}

The compound conditions are determined by using operators (mathematical, logical,

relational) and are dependent on the semantic attribute nature, range/list of values etc.

Exemple :
mathematical operators: +, -, *, /, ( )
logical operators: AND, OR, NOT, ( ), etc.
relational operators: =, <, >, <=, >=, #, $, = =
condition of validation for a primary document:
(no_doc>0 AND no_doc<99999) AND (date_doc NOT empty() and
date_doc>{01.01.2013} )
 Designing Management Information Systems

For the credit activity, we take into account the following compound attributes
[FRAT98].

Attribute Formula
rulaj lunar debitor 31
rulld(c) =  soldzd(c, z)
z 1

rulaj lunar creditor 31

rullc(c) =  soldzc(c, z)
z 1

sold zilnic final debitor soldz_fd(c) = soldzd(c) + rulzd(c)

sold zilnic final creditor soldz_fc(c) = soldzc(c) + rulzc(c)
rata lunară rata_l(c) = round(valimp/nrrate)
dobânda lunară dob_l(c) = suma_ram(c) * proc_dob /100/12
rata totală rata_t(c) = rata_l(c) + dob_l(c)
suma platită suma_pl(c) = suma_pl(c + rata_l(c)
suma rămasă de suma_ram(c) = suma_ram(c) - rata_l(c)
rambursat
rulaj zilnic debitor rulzd(c) = rulzd(c) + suma(c)
rulaj zilnic creditor rulzc(c) = rulzc(c) + suma(c)

It use the following notation in the table:

Notation Meaning
C Holder's account number
Z Day of banking operation
soldzd Debit daily balance
soldzc Credit daily balance
valimp Value of the loan/credit
nrrate Number of rate
suma_ram Ammount remaining to be reimbursed
proc_dob Interest rate
suma Daily ammount

Some attributes within entities will act as an identifier.

The entity identifier is that attribute which uniquely identifies a record (member of it’s
population). The identifier can be a single attribute or can be determined by several
attributes (multiple identifier). Graphically, the identifier is undelined in the entity.
 Designing Management Information Systems

Rules for settings identifiers:

- identifier must be nonempty;
- identifier must consist of a minimum number of attributes;
- if you can choose different identifiers for the same entity, but different, you will prefer
those which have a minimum number of attributes and are easier to handle.

Example:
In the entity Clients, the identifier may be the attribute CNP or a multiple identifier
ID_series and ID_number. Take into account that CNP occurs on all customer
identification documents (identity card or passport) is indicated for use as an identifier of
the entity Client.

c) Determination the associations between conceptual entities in CDM

We can determine associations between conceptual entities based on functional

dependencies between attributes from information database.
Associations are relationships that are established between conceptual entities. An
association does not have an independent existence. An association exist only if the
achievements of entities linked exist. The associations can have their own attributes.
The cardinality express the participation of the achievements of the entities to the
associations. Cardinality is minimal (0,1; 1,1) or maximal (0, n; 1, n). The associations of
type mn are resolved through two joint 1,n and 1,m (1,n).
The collection of an association is given by the participating entities.
The dimension of the association is given by the number of participating entities.

A special case is generated by reflexive associations. These associations are

associations that occur between different achievements of the same entity. In this case,
you would specify the roles they play in the association, the roles that show the entity's
participation in association. In the banking system such associations are uncommon.

Exemple:

Client girant 0,n

Client
CNP
Nume
Pren gireaza
Adresa
Client girat
………..

0,n

A client can be guarantor/endorser for another client of the bank. In this case, the
roles are "guarantor client" and "client which is guaranted/endorsed".
 Designing Management Information Systems
The integrity constraints are rules that must be followed by the elements (attributes,
associations, entities) and their inclusion in the early stages of design leads to a faster
troubleshooting errors that occur in running applications.

The integrity constraints are:

- structural integrity constraints;
- entity constraints;
- referential constraints;
- integrity of roles constraints;
- integrity of association constraints;
- semantic integrity constraints.

Structural integrity constraints imposed conditions relate to the concepts used in

modeling.

Integrity entity constraints employs a unique identifier for each entity nonempty.
Exemple:
For entity Contract{No_contr, Date_contr, Value_contr, IR_contr, Per_contr}, the
identifier of the entity is No_contr and cannot take empty values. The entity has
registered loans only.

Referential constraints implies the existence of association that is determined only by

the existence of the achievements participating entities in the association.
Example:

1,n 1,1
Clients Contracts
CNP Sign No_contr
Name Date_contr
…….. ……..

Th association “Sign” exists if there is an achievement of the entity Client and an

achievement of the correspondent entity Contract only.

Integrity of roles constraints refer to the roles played by an entity in various

associations and have three forms: inclusion, equality and exclusion of roles.

Semantic integrity constraints are management rules enforce to attributes. It occur

as static or dynamic constraints.

The static constraints concern attributes, regardless of their evolution in time.

Example:
For entity Contract, we can set the static constraints.
 Designing Management Information Systems

Contracts Static constraints:

No_contr No_contr > 0
Date_contr Date_contr > 01.01.2013
Value_contr Suma_contr > 100.000 (lei)
IR_contr IR_contr > 0
Per_contr Per_contr < 60 (months)

The dynamic constraints take into account the evolution in time of data.
Exemple:
For entity Contract, we can set the dynamic constraints.
Dob_contr attribute is updated periodically by the bank, depending on the prevailing
market interest rate finance and banking. For credit agreements already concluded, the
interest rate is updated according to the following rule: if market interest rates rise, the
interest rate for the loan agreement shall be increased accordingly, if market interest rates
fall, the interest rate remains constant related to the credit agreement.

CDM description is made using a table (example for credit activity)

 Designing Management Information Systems

Descrierea tipurilor de entităţi Descrierea tipurilor de relaţii

Tipul de Tipul de proprietate Tip relaţie Cardi- Colecţie
entitate Natura, lungimea Identificator nalitate
Identificator
incheie 1,n CLIENTI
Clienti CNP_cl, N,13 1,1 CONTRACTE
Nume_cl, T,20 efectueaza 1,n CLIENTI
Prenume_cl, T,20 1,1 INCAS_PLATI
Judet_cl, T,10
Localitate_cl, T, 10
Adr_loc,_cl, T, 10

Numar_contr, N, 6 incheie 1,1 CONTRACTE

Contracte Data_contr, D, 8 1,n CLIENTI
Suma_contr, N, 9 gireaza 1,n CONTRACTE
Dob_contr, N, 3 1,n GIRANTI
Per_contr, N, 3 genereaza 1,n CONTRACTE
1,1 INCAS_PLATI
Tip_doc, T, 10 efectueaza 1,1 INCAS_PLATI
Incas_plati Numar_doc, N, 6 1,n CLIENTI
Data_doc, D, 8 genereaza 1,1 INCAS_PLATI
Suma_doc, N, 9 1,n CONTRACTE
Explicatii_doc, T, 10 1,1 INCAS_PLATI
platesc 0,n GIRANTI
CNP_cl, N,13
CNP_g, N,13
Giranti gireaza 1,n GIRANTI
CNP_g, N,13 1,n CONTRACTE
Nume_g, T,20 0,n GIRANTI
Prenume_g, T,20 platesc 1,1 CONTRACTE
Judet_g, T,10
Localitate_gl, T, 10
Adr_loc_g, T, 10
 Designing Management Information Systems

Based on these elements is proposed CDM simplified for loans.