Management Information System: Unit - 1

Management Information System UNIT - 1
UNIT – 1
Introduction to IS Models and Types of Information systems
What is MIS? Introduction & Definition
What is MIS?
MIS is the use of information technology, people, and business processes to record, store
and process data to produce information that decision makers can use to make day to day
decisions.
MIS is the acronym for Management Information Systems. In a nutshell, MIS is a

collection of systems, hardware, procedures and people that all work together to process,
store, and produce information that is useful to the organization.
The need for MIS
The following are some of the justifications for having an MIS system
 Decision makers need information to make effective decisions. Management

Information Systems (MIS) make this possible.
 MIS systems facilitate communication within and outside the organization –
employees within the organization are able to easily access the required
information for the day to day operations. Facilitates such as Short Message Service
(SMS) & Email make it possible to communicate with customers and suppliers from
within the MIS system that an organization is using.
 Record keeping – management information systems record all business
transactions of an organization and provide a reference point for the transactions.
Components of MIS
The major components of a typical management information system are;
 People – people who use the information system

 Data – the data that the information system records
 Business Procedures – procedures put in place on how to record, store and
analyze data
 Hardware – these include servers, workstations, networking equipment, printers,
etc.
 Software – these are programs used to handle the data. These include programs
such as spreadsheet programs, database software, etc.
1 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Types of Information Systems
The type of information system that a user uses depends on their level in an organization.
The following diagram shows the three major levels of users in an organization and the
type of information system that they use.
Transaction Processing Systems (TPS)
This type of information system is used to record the day to day transactions of a business.
An example of a Transaction Processing System is a Point of Sale (POS) system. A POS
system is used to record the daily sales.
Management Information Systems (MIS)
Management Information Systems are used to guide tactic managers to make semi-
structured decisions. The output from the transaction processing system is used as input to
the MIS system.
Decision Support Systems (DSS)
Decision support systems are used by top level managers to make semi-structured
decisions. The output from the Management Information System is used as input to the
decision support system.DSS systems also get data input from external sources such as
current market forces, competition, etc.
Manual Information Systems VS Computerized Information Systems (MIS)
Data is the bloodstream of any business entity. Everyone in an organization needs

information to make decisions. An information system is an organized way of recording,
storing data, and retrieving information.
In this section, we will look at manual information systems vs. computerized information
systems.
Manual Information System
A manual information system does not use any computerized devices. The recording,
storing and retrieving of data is done manually by the people, who are responsible for the
information system.
The following are the major components of a manual information system
 People –people are the recipients of information system

 Business Procedures –these are measures put in place that define the rules for
processing data, storing it, analyzing it and producing information
 Data –these are the recorded day to day transactions
 Filing system – this is an organized way of storing information
 Reports –the reports are generated after manually analyzing the data from the
filing system and compiling it.
The following diagram illustrates how a typical manual information system works

Advantages and Dis-advantages of a manual information system
Advantages:
The following are the advantages of manual information systems
 Cost effective – it is cheaper compared to a computerized system because there is

no need to purchase expensive equipment such as servers, workstations, printers,
etc.
 Flexible –evolving business requirements can easily be implemented into the
business procedures and implemented immediately
Disadvantages:
The following are some of the disadvantages of a manual information system.
 Time consuming –all data entries need to be verified before filing, this is a time
consuming task when done by humans. Retrieving data from the filing system also
takes a considerable amount of time
 Prone to error – the accuracy of the data when verified and validated by human
beings is more prone to errors compared to verification and validation done by
computerized systems.
 Lack of security – the security of manual systems is implemented by restricting
access to the file room. Experience shows unauthorized people can easily gain
access to the filing room
 Duplication of data –most departments in an organization need to have access to
the same data. In a manual system, it is common to duplicate this data to make it
easy to accessible to all authorized users. The challenge comes in when the same
data needs to be updated
 Data inconsistency – due to the duplication of data, it is very common to update
data in one file and not update the other files. This leads to data inconsistency
 Lack of backups – if the file get lost or mishandled, the chances of recovering the
data are almost zero.
Computerized information system
Computerized systems were developed to address the challenges of manual information

systems. The major difference between a manual and computerized information system is a
computerized system uses a combination of software and hardware to record, store,
analyze and retrieve information.
Advantages and Disadvantages of a computerized information system (MIS)
The following are some of the disadvantages of a computerized information system.

Advantages:
The following are the advantages of computerized information systems
 Fast data processing and information retrieval – this is one of the biggest
advantages of a computerized information system. It processes data and retrieves
information at a faster rate. This leads to improved client/customer service
 Improved data accuracy – easy to implement data validation and verification
checks in a computerized system compared to a manual system.
 Improved security – in addition to restricting access to the database server, the
computerized information system can implement other security controls such as
user’s authentication, biometric authentication systems, access rights control, etc.
 Reduced data duplication – database systems are designed in such a way that
minimized duplication of data. This means updating data in one department
automatically makes it available to the other departments
 Improved backup systems – with modern day technology, backups can be stored
in the cloud which makes it easy to recover the data if something happened to the
hardware and software used to store the data
 Easy access to information – most business executives need to travel and still be
able to make a decision based on the information. The web and Mobile technologies
make accessing data from anywhere possible.
Disadvantages:
 It is expensive to set up and configure – the organization has to buy hardware

and the required software to run the information system. In addition to that,
business procedures will need to be revised, and the staff will need to be trained on
how to use the computerized information system.
 Heavy reliance on technology – if something happens to the hardware or software
that makes it stop functioning, then the information cannot be accessed until the
required hardware or software has been replaced.
 Risk of fraud – if proper controls and checks are not in place, an intruder can post
unauthorized transactions such as an invoice for goods that were never delivered,
etc.
Nolan Stage Hypothesis:
Richard L. Nolan developed the theoretical Stages of growth model (SGM) during the
1970s. This is a general model, which describes the role of information technology (IT), and
how it grows within an organization.
A first draft of the model was made in 1973, consisting of only four stages. Two stages were
added in 1979 to make it a six-stage model
The structure of the final, six-stage model is depicted in the diagram below:

Figure 1: Diagram showing the SGM continuum for growth/maturity
The diagram above shows six stages, and the model suggests that:
 Stage 1: Evolution of IT in organisations begins in an initiation stage.

 Stage 2: This is followed by expeditious spreading of IT in a contagion stage.
 Stage 3: After that, a need for control arises.
 Stage 4: Next, integration of diverse technological solutions evolves.
 Stage 5: Administration/management of data is necessitated, to allow development
without chaotic and increasing IT expenditures.
 Stage 6: Finally, in the maturity stage, constant growth will occur.
Structure of the Model
Stage 1 – Initiation
In this stage, Information Technology is first introduced into the organisation.

According to Nolan’s article in 1973, computers were introduced into companies for
two reasons:
(a) The first reason deals with the company reaching a size where the administrative
processes cannot be accomplished without computers. Also, the success of the
business justifies large investment in specialized equipment.
(b) The second reason deals with computational needs. Nolan defined the critical size
of the company as the most prevalent reason for computer acquisition. Due to the

unfamiliarity of personnel with the technology, users tend to take a "Hands Off"
approach to new technology.
This introductory technology is simple to use and cheap to implement, which

provides substantial monetary savings to the company. During this stage, the IT
department receives little attention from management, and works in a "carefree"
atmosphere.
Stage 1 key points:
 user awareness "Hands Off".

 IT personnel are "specialized for technological learning".
 IT planning and control is lax.
 emphasis on functional applications to reduce costs.
Stage 2 – Contagion
Even though computer systems are recognized as process change enablers in Stage 1,
Nolan acknowledged that many users become on bad terms by computing. Because of
this, Stage 2 is characterized by a managerial need to explain the potential of
computer applications to alienated users. This leads to the adoption of computers in a
range of different areas.
Stage 2 presents some difficulties:
 Project and budgetary controls are not developed, leading to unavoidable a

saturation of existing computer capacity and more sophisticated computer systems
being obtained.
 System sophistication requires employing specialized professionals, and, due to the
shortage of qualified individuals, employing these people results in higher salaries.
 The budget for the computer organization rises significantly, and causes management
concern.
 Although the price of Stage 2 is high, it becomes increasingly evident that planning
and control for the growth of computer systems is necessary.
Stage 2 key points:
 proliferation of applications.
 users superficially enthusiastic about using data processing.
 management control even more lax.
 rapid growth of budgets.
 management regard the computer as "just a machine".
 rapid growth of computer use throughout the organisation's functional areas.
 computer use is plagued by crisis after crisis.

Stage 3 – Control
Stage 3 is a reaction against excessive and uncontrolled expenditures of time and

money spent on computer systems, and the major problem for management is the
organization of tasks for control of computer operating costs. In this stage, project
management and management report systems are organised, which leads to
development of programming, documentation, and operation standards. During Stage
3, a shift occurs from management of computers to management of data resources.
This shift:
 is an outcome of the analysis of how to increase management planning, control and

expenditure for data processing operations.
 provides flexibility in data processing that is needed to meet management’s new
controls.
The major characteristic of Stage 3 is the reconstruction of data processing operations.
Stage 3 key points:
 No reduction in computer use.

 Greater importance of the IT division to the organization.
 Centralized controls put in place.
 Applications often incompatible or inadequate.
 Use of database and communications, often with negative general management
reaction.
 Increasing end-user frustration with the IT services provided.
Stage 4 – Integration
Stage 4 features the adoption of new technology to integrate systems that were
previously separate/disparate entities. This creates further data processing (IT)
expenditure at rates similar to that of Stage 2. In the latter half of Stage 4, exclusive
reliance on computer controls leads to inefficiencies. The inefficiencies associated
with rapid growth may simultaneously create another wave of problems. This is the
last stage that Nolan acknowledged in his initial (1973) draft of the stages of growth.
Stage 4 key points:
 Rise of control by the users.

 Large data processing budget growth.
 Demand for on-line database facilities.
 Data processing department operates like a computer utility.
 Formal planning and control within data processing.
 Users more accountable for their applications.
 Use of steering committees, applications financial planning.
 Data processing has better management controls, standards, project management.
Stage 5 – Data Administration
Nolan determined that four stages were not enough to describe the proliferation of IT
in an organization and so added Stage 5 in 1979. Stage 5 features a new emphasis on
managing corporate data rather than IT. Like the proceeding Stage 4, it is marked by
the development and maturity of the new concept of data administration.
Stage 5 key points:
 Data administration is introduced.

 Identification of data similarities, its usage, and its meanings within the whole
organization.
 Applications portfolios are integrated into the organization.
 Data processing department serves more as an administrator of data resources than
of machines.
 Use of term IT/IS rather than "data processing".
Stage 6 – Maturity
In Stage 6, the application portfolios - tasks like order entry, general ledger, and
material requirements planning - are completed according to a structure that mirrors
the organization and its information flows. During this stage, tracking sales growth
becomes an important aspect. Typically:
 10% of the work relates to batch and remote job entry.

 60% of the work relates to dedicated database and data communications processing.
 5% of the work relates to personal computing.
 25% of the work relates to minicomputer processing.
Management control systems are estimated as being 40% of Stage 6. There are three
aspects of management control; manufacturing, marketing and financial:
 Manufacturing control requires forecasting future needs.

 Marketing control strictly deals with research.
 Financial control requires forecasting future cash flow requirements.
Stage 6 exercises a high degree of control, by compiling all of the information from Stages 1
through to 5, inclusive. This allows the organization to function at relatively high levels of
efficiency and effectiveness.
Stage 6 key points:
 Systems that reflect the real information needs of the organization.

 Use of data resources to develop competitive and opportunistic applications.
 Data processing organization viewed solely as a data resource function.
 Data processing emphasis on data resource strategic planning.
 Ultimately, users and DP department jointly responsible for the use of data resources
within the organization.
 Manager of IT system takes on the same importance in the organizational hierarchy
as (say) the director of finance or director of HR.
IS Strategic Grid
The Strategic Grid for IT from McFarlan, McKenney & Pyburn ('83) is a tool that can be
used to assess the current operational dependence on information systems (low, high)
versus the future potential strategic impact of information systems (low, high).
Combining the 2 views in a matrix results in 4 possible combinations:
1. Support (currently low, low in the future too). IT has little relevance and simply
supports some processes. Firms or systems in this quadrant will place the least
amount of emphasis on IT (planning) in terms of senior management concern and
involvement.
2. Turnaround (currently low, high in the future). IT will be a key feature of future
strategic planning. Significant top management involvement in IT (planning) must
be established.
3. Factory (currently high, low in the future). It is important in terms of day-to-day
operations but it is not felt that there are any major IT developments on the
horizon that will fundamentally alter the nature of the business. The level of senior
management involvement is decreasing.
4. Strategic (high, high). IT Strategy is very important and plays a critical role in the
formulation of the overall business strategy. High level of involvement of top
management in IT strategy.

One can use the McFarlan Grid to analyze the impact of information systems as a
whole for an organization or for a division or department of an organization. But the
strategic grid can also be used to analyze the dependence and impact of individual IT
applications or systems.
Any organization would be wise to have an IT Strategy, even if it is in the support quadrant.
According to Professor Earl, there are nine reasons as to why any organization should
have an IT strategy:
1. IT involves high costs.
2. IT is critical to the success of many organizations.
3. IT is now used as part of the commercial strategy in the battle for competitive
advantage.
4. IT is required by the economic context (from a macro-economic point of view).
5. IT affects all levels of management.
6. IT has meant a revolution in the way information is created and presented to
management.
7. IT involves many stakeholders, not just management, and not just within the
organization.
8. The detailed technical issues in IT are important.
9. IT requires effective management, as this can make a real difference to successful IT
use.
WARD & PEPPARD FRAMEWORK:
Focus on technology or business aspects are not enough to bring success to overall
strategic plan. The right way to achieve strategic advantage from information
systems/technology is concentrating or rethinking business processes by analyzing current
business issues, analyzing the environment changing and make information technology as a
solution

Figure 1: Ward and Peppard Framework
Ward and Peppard Framework for IS/IT strategy formulation and planning process on
Figure given above covers several phases as follows:
a. Internal Business Environment: mapping the current business strategy, the purpose
(objective), resources, processes, and culture of the organization. Analysis of internal
business environment used to determine the organization's business strategy, vision,
mission and the goals of the organization, activities and business processes of the
organization, its resources, and information needed by the organization.
b. External Business Environment: mapping the economic conditions, industry

environment, and competitive environment where the organization operates. External
business environment can boost the organization to go ahead and compete, also can
provide barriers and even a threat to organization survival.
c. Internal IS/IT Environment: the perspective of the IS/IT at the business process, it’s
maturity, the scope and contributions of business, skills, resources and technology
infrastructure, current portfolio application and the system that is being developed or
already budgeted but not yet completed are also part of the internally IS/IT environment.
d. The external IS/IT Environment: technology trends and opportunities

stability/utilization generated by the IS/IT of other parties, especially customers,

competitors, and suppliers. This analysis is used to gain an understanding of the

development of the IS/IT outside the organization that may have an impact on the
organization's survival.
e. Current Application Portfolio: an information system applications that have been or

are being used by the organization. Identify the advantages and strength given by the
application to confront the competition climate faced by organizations.
The process output of Ward and Peppard Framework describe as follow:
a. Business IS Strategic: the mechanics of each unit or function that will develop IS/IT in
achieving a business objective, application portfolio, and overview of information
architecture.
b. Information Technology Strategy: policies and strategies for technology management

and human resources experts.
c. IS/IT Management Strategy: include that common element of the strategy that used by
organization overall to ensure consistency of IS/IT policy required. Final output of Ward
and Peppard framework is Future Application Portfolio, an application proposals that will
be developed by the organization in the future with the aim to integrate each
organizational unit and adjust the rhythm of technological development with organizations
business development.
EARL’S MULTIPLE METHODOLOGY
Michael J Earl (1989) realized the complexity of the problem the same way that
contemporary IS practitioners did, and he proposed a very comprehensive methodology
that provides a basis for analyzing all IS planning. He highlights three issues:
1. Clarification of the business needs and strategy in IS terms · what is the business strategy
and what is the IS strategy;
2. Evaluation of current IS provision and use · how to integrate legacy systems; and
3. Innovation of new strategic opportunities afforded by IT · what are the operational

goals.
Earl’s method is known as the “multiple methodology” or “three-pronged methodology” as

he tackles his three issues from different angles · top-down, bottom-up, and inside-out
respectively.

Figure presents an overview of Earl’s methodology. In this section, it explain each of

the three legs in the figure.
Top-Down Clarification:
This is the process used to find out the corporate objectives and business strategies that
affect the formulation of IS strategy. However, understanding business strategies is difficult
because most organizations do not have their strategies or objectives written down, or
even when you find some written statements, the business strategies are often ill-defined
or are unrelated to IS development plans.
This top-down process should involve the top management or a delegation of senior
executives. Commonly called a ‘steering committee’, this group includes management from
each department of the organization. Discussions and planning meetings should be
conducted where tools like CSFs or the ‘scenario approach’ are applied to identify where IS
can help in the business strategy.
Earl suggests a four-step process:
1. Identification of corporate objectives - objectives of all business units should be solicited,

agreed upon, and clearly stated
2. Determination of critical success factors - CSFs that are needed to achieve the agreed
business objectives are suggested and determined after resolving conflicts among different
business units;
3. Decomposition to critical business processes - the CSFs that were identified are
transformed into business processes that can be improved by ISs;

4. Identification of IS and IT - details of the ISs to support those business processes and the
underlying IT infrastructure are analyzed and a development plan is decided.
Bottom-Up Evaluation:
Earl argues that the bottom-up process is essential for the following reasons:
1. To find out the quality and capacity of the IS applications (legacy systems) currently
being used in the organization.
2. To demonstrate to top management (the strength and the weakness of) the current IS
status of the organization.
3. To identify components of the current ISs that can be improved for better strategic
advantage by simple add-ons rather than a total renovation.
The evaluation process could lead to a systems audit grid like the one in Figure given
below.
Figure: Systems audit grid
To classify ISs by the systems audit grid, you need to evaluate the technical quality and the
business value of individual ISs. In each of the axes, you might ask three questions to
determine the position of the IS:
• Horizontal axis · How is the system in terms of its reliability, maintainability, and cost-
efficiency?

• Vertical axis ·
(a) How does the system impact on business; and
(b) How easy and how often is it used?
The grid also suggests that the ISs in it be divested, reassessed, renewed or enhanced
according to where they are positioned. Often in cases of developing an ecommerce
platform, many components of the current ARE applications need to migrate to a Web-
based system without making too many alternations. Therefore, the integration of legacy
systems (plus legacy data) needs to be handled with care. For example, special procedures
must be followed to guarantee that the integrity of the data would not be affected because
of the migration
Inside-Out Innovation:
Earl suggests that people in committees, like in think tanks and brainstorming groups, are
more likely to generate creative ideas by which the organization could discover market
niches or innovative use of information technology. These people might not be IT
professionals. Their new ideas could seek support from leading IT vendors and would
successfully be implemented if;
1. A project sponsor exists · they need to find someone who can support and provide the
resources necessary to carry on to the new ideas.
2. A chance to test the idea · the idea can be experimented with without causing too much
public alarm.
3. Tight management control · it is needed to ensure satisfactory installation, effective

implementation and good integration with business practices.
4. IT capability gap bridged · the project team needs to deal with the knowledge or
capability gap.
The three legs of Earl’s multiple methodology represent the three angles from which IS
strategic planning can be considered on the inside of an organization. Earl also suggests
that studying the IS strategy from an external point of view (e.g. competitors, customers,
consumers, etc.) is essential.
Critical Success Factors In Implementation of Information Systems:
It has been observed that certain factors are critical for the successful implementation of
information systems. These factors fall under both management and technical factors. The
critical factors that determine the success of implementation of information systems are:

Top Management Commitment
It has been observed that top management commitment is vital for a successful IS
implementation. Whenever there is top management commitment, minor issues and
problems do not snowball into major ones and they normally do not pose a challenge.
However, in the absence of such commitment even minor issues become unmanageable. It
is important that top management commitment for such IS implementation is not only
present but is also communicated well within the organization, so that there is no
ambiguity about the commitment. This strong signal of the will of the top management
makes the work of the implementers easier. Minor issues cease to become issues at all and
even major issues are sympathetically dealt with and urgently attended to by the client
organization.
IS Team Composition
The implementation of IS is done by a team. The team consists of technical and

management specialists from the vendor organization as well as people from the IS
department and other stakeholder departments of the client organization. The constitution
of the team is a very important and a critical factor in the successful implementation of IS.
The team must consist of representatives from the user community, people who were part
of the planning team, designing team in the client organization, other stakeholders in the
client organization and people from the human resources department. The team must also
obviously have members from the vendor organization who have sufficient knowledge of
the IS being implemented. Their technical knowledge and managerial competence must be
beyond any doubt. It is best if such a team works under the supervision of a top
management functionary with sufficient powers and authority to take suitable decisions
about the project so that better control can be exercised on the implementation schedules
and issues that come up on the floor can be ironed out across the table. The urgency of the
implementation in such cases is clearly demonstrated to the entire organization. The

acceptability of the IS also improves. If the team consists of members from all stakeholders
and is steered by a senior manager.
IT Teamwork
The team that is created must work in a cohesive manner with a sense of purpose. A unified
front must be projected so that acceptability of the project improves. If the team members
indulge is public spats, the chances of successful implementation are grim. However, every
effort must be made to find out real issues and they must be dealt with in the right earnest.
The team members must work as a team in all respects.
IS planning Quality
An IS project is as successful as its plan. If the planning was faulty, the IS implementation
will no doubt be faulty. The IS will never be able to supply the kind of information the client
desires if the planning has not been done diligently.
Diligent Project Management
The manner in which the implementation project is handled is also another critical success
factor. Modern project management techniques must be used to estimate accurate cost and
time schedules which must then be strictly monitored and adhered to. Any laxity will result
in slippage of deadlines resulting loss of credibility of the project.
Change Management Initiatives and their Effectiveness
The process of implementation is normally a process of change and hence is riddled with
challenges. Therefore, change management is probably the single most important factor in
most large-scale IS implementations. The change management initiatives must be
considered as part of the implementation effort and should be done proactively rather than
in a reactive manner. Change management initiatives must also be done with the
seriousness that it deserves. A callous attitude towards change management initiatives can
cause more damage than good. Hence the attitude of management must be calibrated to
suit the initiative.
Effective Communication
Communication is a key element in any organization initiative. In IS implementation,

communication is a key element for success. Both formal and informal communication
needs to be managed for implementing the project successfully. Effective communication
will improve transparency and build trust within the client organization, thereby reducing
the dependence on change management interventions.

Training
This is a key factor in the successful implementation of a new IS, making the IS acceptable
to the users, reduces resistance to the IS and creates a better environment as a whole for
the implementation to proceed smoothly. However, the quality of the training must be good
and it must be explained to the users, the added benefits of the IS being implemented. The
reason for migrating to the new IS will then be clearly understood by the users. Training
will also help in the smooth transition from the old system to the new one without
hampering the business process efficiency of the organization.
Technical Quality of IS
Even with all the support from the client, the implementation can fail if the basic technical
product that comes from the vendor is of bad quality. Technical quality should be of good
quality. This is a necessary condition. With bugs in the systems popping up every few
minute, the system will have very slim chances of success. Clinch free technical system is
therefore a critical factor.
HR Measures to Neutralize Organization Antibodies
Organization antibodies are people who find fault where none exists. Negativity and
pessimism are the defining characteristics of such individuals. Sometimes they may also
have motives to bad mouth a new system. When the influential staff bad months the new IS
system, others follow them. This creates an avalanche effect and confidence in the new
system drastically falls. This is an HR issue and has to be dealt with by the HR department
in a firm and fair manner. It must be made known within the organization that there exists
room for discussion and debate. Several teams and committees that are formed from the
planning stage of a new IS initiative must be highlighted as forums for discussion and
debate but only at the right time. Once a decision is taken about an IS by the top
management, everyone must work towards making that decision a success. Any deviation
from this must attract the necessary measures that it deserves. Such a measure will
neutralize any antibodies and in their absence the implementation will be smooth.
Soft systems methodology (SSM)
It is an approach to organizational process modeling (business process modeling) and it

can be used both for general problem solving and in the management of change. It was
developed in England by academics at the Lancaster University Systems Department
through a ten-year action research program
The methodology was developed from earlier systems engineering approaches, primarily
by Peter Check land and colleagues such as Brian Wilson. The primary use of SSM is in the
analysis of complex situations where there are divergent views about the definition of the

problem. These situations are "soft problems" such as: How to improve health services
delivery? How to manage disaster planning? When should mentally disordered offenders
be diverted from custody? What to do about homelessness amongst young people?
In such situations even the actual problem to be addressed may not be easy to agree upon.
To intervene in such situations the soft systems approach uses the notion of a "system" as
an interrogative device that will enable debate amongst concerned parties. In its 'classic'
form the methodology consists of seven steps, with initial appreciation of the problem
situation leading to the modeling of several human activity systems that might be thought
relevant to the problem situation. By discussions and exploration of these, the decision
makers will arrive at accommodations (or, exceptionally, at consensus) over what kind of
changes may be systemically desirable and feasible in the situation. Later explanations of
the ideas give a more sophisticated view of this systemic method, and give more attention
to locating the methodology in respect to its philosophical underpinnings. It is the earlier
classical view which is most widely used in practice.
There are several hundred documented examples of the successful use of SSM in many
different fields, ranging from ecology, to business and military logistics. It has been adopted
by many organizations and incorporated into other approaches: in the 1990s for example it
was the recommended planning tool for the UK government's SSADM system development
methodology.
The general applicability of the approach has led to some criticisms that it is functionalist,
non-emancipator or supports the status quo and existing power structures; this is a claim
that users would deny, arguing that the methodology itself can be none of these, it is the
user of the methodology that may choose to employ it in such a way.
7-stage representation of SSM:
1. Enter situation considered problematical

2. Express the problem situation
3. Formulate root definitions of relevant systems of purposeful activity
4. Build conceptual models of the systems named in the root definitions
5. Compare models with real world situations
6. Define possible changes which are both possible and feasible
7. Take action to improve the problem situation
This is used to prompt thinking about what the business is trying to achieve. Business
Perspectives help the Business Analyst to consider the impact of any proposed solution on
the people involved.

Customers - Who are the beneficiaries of the highest level business process and how does
the issue affect them?
Actors - Who is involved in the situation, who will be involved in implementing solutions
and what will impact their success?
Transformation Process - What is the transformation that lies at the heart of the system -
transforming grapes into wine, transforming unsold goods into sold goods, transforming a
societal need into a societal need met?
Weltanschauung (or Worldview) - What is the big picture and what are the wider
impacts of the issue?
Owner - Who owns the process or situation being investigated and what role will they play
in the solution?
Environmental Constraints - What are the constraints and limitations that will impact the
solution and its success?
Socio-technical systems:
Systems: Software Engineering is not an isolated activity but is part of a broader systems
engineering process.
Software system are not isolated and are essential components
System/Complex System:
“A system is a purposeful collection of interrelated components that work together to achieve some
objective”
 System that includes s/w fall into two categories – Technical computer-based systems
 Systems that includes hardware and software components but not procedures and
processes. – Socio-technical systems
 Systems that include technical systems but also operational processes and people who use
and interact with the technical system. Sociotechnical systems are governed by
organisational policies and rules.
Technical Computer-based Systems:
System that include hardware and software but where the operators and operational processes not
normally considered to be part of the system.

Socio-technical System:
 System that include technical systems but also operational processes and people who use
and interact with the technical system.
 Socio-technical systems are governed by organizational policies and rules.
Sociotechnical System Stack:
Layers in the STS stacks
● Equipment – Hardware devices , some of which may be computers. Most devices will include an
embedded system of some kind.

● Operating System – Provides a set of common facilities for higher levels in the system.
● Communications and data management – Middleware that provides access to remote systems
and databases.
● Application systems – Specific functionality to meet some organization requirements
Layers in the STS stacks:
 Business processes – A set of processes involving people and computer systems that
support the activities of the business
 Organizations – Higher level strategic business activities that affect the operation of the
system.
 Society – Laws , regulation and culture that affect the operation of the system.
 Holistic System Design:
 There are interactions and dependencies between the layers in a system and changes atone
level ripple through the other levels.
 Change is regulation leads to changes in business processes and application software
Organizational Affects:
 Process Changes – Significant changes may be resisted by users.

 Job Changes – System me de-skill user or cause changes to the way they work.
 Organizational Changes – May change political power structure in an organization.
Socio-technical system characteristics:
Emergent Properties – Properties of the system of a whole that depend on the system components
and their relationships
Non-deterministic – They do not always produce the same output when presented with the same
input because the system’s behavior is partially dependent on human operators.
Complex relationships with organizational objective – The extent to which the system supports
organizational objective does not just depend on the system itself.
Emergent Properties:

Types of Emergent Property:
 Functional Properties – These appear when all the parts of a system work together to
achieve some objective.
 Non-functional emergent properties – Example are reliability , performance , safely and
security.These relate to the behaviour of the system in its operational environment.
Reliability as an emergent property:
 Because of component inter-dependencies faults can be propogated through the system

 System failure often occur because of unforeseen inter-relationships between components
 Consider reliability from three prospectives:- – Hardware reliability – Software reliability –
Operator reliability
Failure Propagation:

Non-determinism:
 People are non-deterministics

 Sociotechnical systems are non-deterministic
Partly because of:-
– People
– Changes to h/w , s/w and data in these systems are so frequent.
System Engineering:
So , system engineering involved following activities :-
– Procuring
– Specifying
– Designing
– Implementing
– Validating
– Deploying
– Operating
– and , maintaining
● System Engineer concerned with s/w , h/w and system’s interactions with users and its
environment.
Stages of Systems Engineering:
There are three overlapping stages in the lifetime of large and complex sociotechnical
systems:-
– Procurement or Acquisition
– Development
– Operation
It includes:-
– Purpose of system is decided

– High-level system requirements are established
– Decision are made on how functionality will be distributed across hardware, software
and people
– And, components that will make up the system are purchased
Development:
It includes :-
– development activities related to
● System Developments (requirements definition , system design , hardware and software

engineering , system
integration and testing)
● operational Processes are defined
● the training courses for system users are designed.
Operation:
It includes :-
– System is deployed
– Users are trainined
– System is brought into use
Stages of System Engineering:

System Procurement:
System Procurement Process
System Development:
Goal of System Development Process :-
– Develop or acquire all of the components of a system
– Integrate these components to create the final system
Fundamental activities involved in system development
– Requirements Development
– System Design
– Subsystem Engineering
– System Integration
– System Testing
– System Development

Requirement Development
– High-level and business requirements identified during the procurement process have to
be developed in more detail.
System Design
– This process overlap with requirement development process
– Establishing the overall architecture of the system
– Identifying different components and understanding relationship between them
Subsystem Engineering
– It involves development of system components
– Configuring off-the-self hardware and software
– If necessary , design special-purpose hardware
– Define operational processes for the system
– Redesign essential business processes
System Integration
– The components are put together to create a new system
System Testing
– Its an extensive process which contains activities to identify the problem
– If found fault then Reentered into subsystem engineering and system integration phase.

– Testing can be done by :-
1. System Developers
2. Acceptance/User of the organization
System Deployment
– Transferring data from existing systems , and establishing communications with other
systems in the environment
New Requirements Emerge:
Requirements affect design decisions and vice versa.
Spiral Model:
Integrate subsystem:
Integration of subsystem can be done using :-
– “Big-Bang” approach
– Incremental approach

● Development of subsystem can be finished at the same time.
● Incremental integration reduces the cost of error location.
● Now a day’s systems developed using COTS (component off-the-self) h/w and s/w.
Prototyping Model:
The prototyping model is a systems development method in which a prototype is built,

tested and then reworked as necessary until an acceptable outcome is achieved from which
the complete system or product can be developed. This model works best in scenarios
where not all of the project requirements are known in detail ahead of time. It is an
iterative, trial-and-error process that takes place between the developers and the users.
Steps of the prototyping model:
In most cases, the steps of the prototyping model are as follows:
1. The new system requirements are defined in as much detail as possible. This usually
involves interviewing a number of users representing all the departments or aspects
of the existing system.
2. A preliminary, simple design is created for the new system.
3. A first prototype of the new system is constructed from the preliminary design. This
is usually a scaled-down system, and represents an approximation of the
characteristics of the final product.
4. The users thoroughly evaluate the first prototype and note its strengths and
weaknesses, what needs to be added and what should to be removed. The developer
collects and analyzes the remarks from the users.
5. The first prototype is modified, based on the comments supplied by the users, and a
second prototype of the new system is constructed.
6. The second prototype is evaluated in the same manner as was the first prototype.
7. The preceding steps are iterated as many times as necessary, until the users are
satisfied that the prototype represents the final product desired.
8. The final system is constructed, based on the final prototype.
9. The final system is thoroughly evaluated and tested. Routine maintenance is carried
out on a continuing basis to prevent large-scale failures and to minimize downtime.
Types of prototype models
There are a few types of prototype models that can be implemented by development teams
based on their needs:

Rapid throwaway- This method involves exploring ideas by quickly developing a

prototype based on preliminary requirements that is then revised through customer
feedback. The name rapid throwaway refers to the fact that each prototype is completely
discarded and may not be a part of the final product.
Evolutionary- This approach uses a continuous, working prototype that is refined after
each iteration of customer feedback. Because each prototype is not started from scratch,
this method saves time and effort.
Incremental- This technique breaks the concept for the final product into smaller pieces,
and prototypes are created for each one. In the end, these prototypes are merged into the
final product.
Extreme- This prototype model is used specifically for web development. All web
prototypes are built in an HTML format with a services layer and are then integrated into
the final product.
Advantages of the prototyping model
Using a prototype model can bring multiple advantages, including:
 Customers get a say in the product early on, increasing customer satisfaction.
 Missing functionality and errors are detected easily.
 Prototypes can be reused in future, more complicated projects.
 It emphasizes team communication and flexible design practices.
 Users have a better understanding of how the product works.
 Quicker customer feedback provides a better idea of customer needs.
Disadvantages of the prototyping model
The main disadvantage of this methodology is that it is more costly in terms of time and
money when compared to alternative development methods, such as the spiral or waterfall
model. Since in most cases the prototype is discarded, some companies may not see the
value in taking this approach.
Additionally, inviting customer feedback so early on in the development lifecycle may cause
problems. One problem is that there may be an excessive amount of change requests that
may be hard to accommodate. Another issue could arise if after seeing the prototype, the
customer demands a quicker final release or becomes uninterested in the product.
END USER COMPUTING:
In computing, End User Computing (EUC) refer to systems in which non-programmers can
create working applications. EUC is a group of approaches to computing that aim at better
integrating end users into the computing environment. These approaches attempt to
realize the potential for high-end computing to perform in a trustworthy manner in
problem solving of the highest order
The term end-user computing has different meanings according to the context in which it is
used. The following statements could all refer to end-user computing:
◦ all tools by which non-data-processing staff handles their own problems without
professional programmers;
◦ Creative use of data processing by non-data-processing experts;
◦ Complex computing by non-data-processing professionals to answer organizational

information needs;
◦ Non-technical end-users using user-friendly, fourth-generation languages (4GLs) and PCs

to generate reports or build decision support systems;
◦ Use of computer hardware and software by people in organizations whose jobs are
usually classified as net users of information systems rather than net developers of
information systems.
Who are the End Users?
 Non programming
 Command level
 End-user programmers (including senior management professionals)
 Functional support personnel
 End user computing support personnel
 DP Programmers
End-user computing (EUC): All uses of computers by business people who are not
information systems professionals.
End-user development (EUD): Systems development and programming undertaken by

non-IS staff.
END USER IS – Services:
End-user IS services: All services required to support end-users in running their PCs and
developing and using applications
1. Provide a help-desk service.

2. Achieve standardization of software.
3. Ensure network efficiency.
4. Provide training.
5. Delivering services to end-users cost-effectively.
Advantages:
 Systems tailored to users

 Enables creative use of IS
 Generates competitive advantage
 Puts users nearer the information
 Allows for variety
 Increases user awareness of IS
 Relieves work load of IT professional
Disadvantages:
 Produces inappropriate systems

 Causes duplication
 Takes users away from their real job
 Ignores long range and technical issues
 Causes integration problems

•Service Desk – Global Service Desk handling 10mn trouble tickets and 7mn service
desk calls per annum in 20 languages. 17 Global delivery centers spread across the
world with 7 near shore centers
•Client Application Management services – Deliver Application Packaging, Imaging,

Software Distribution and Patch Management services in a centralized factory
construct. 5000+ Applications packaged and distributed annually.
•Messaging & Collaboration Services – Build, operate and provide professional

services on email and collaboration platforms like Microsoft Exchange, IBM Lotus
Notes. Monitor and support more than 800,000 mailboxes globally
•Asset Management – Provide a complete Asset Management Lifecycle service right

from ordering to ongoing management and tracking of client assets.
•Client Support Services – Provide onsite support for Desktops, Laptops, Printers,
Handheld devices at client locations spread globally. Global Network of Client support
specialists supporting approximately 3 million client devices distributed globally.
•Infrastructure Application – Build and Manage Infrastructure Applications in

customer environments. These services include Directory Services, File and Print
services, Remote Access Management, Application delivery using Citirix, Microsoft App-
V etc.
The three main types of end-user computing can be defined as:
◦ End-user-developed computer-based information systems for personal, departmental

or organization-wide use, where the end-user is a non-IT professional;
◦ End-user control of which hardware and package applications are purchased for use
in their department;
◦ End-user use of existing information systems.
End-user development of applications represents a major trend in the use of

information technology in organizations.
END USER – Applications:
Reports from a corporate database using standard enquiries defined by the IS/IT
function
 Simple ad hoc queries to databases defined by the user. For someone in an

airline, for example, these might include access to a frequent flier database, customer
reservation system or crew roistering system to monitor performance of each
 What-if? analysis using tools such as spreadsheet models or more specialized tools such
as risk or financial management packages or business intelligence software, used for
monitoring sales and marketing performance of information stored in a data warehouse
 Writing company information for a company intranet
 Development of applications such as a job costing tool or production scheduling system,

using easy-to-use, high-level tools such as application generators, PC database
management systems such as Microsoft Access or Borland or visual programming
environments such as Microsoft Visual Basic.
Reason for growth of EUD:
 Applications backlog: The demand for new applications by users exceeds the
capacity of the IS department or IS outsourcing company to develop them.
 Improved toolsets such as Visual Basic for Applications
 The desire by users to query and analyze data and generate reports from
information stored on databases available across the corporate network
 A trend to decentralization of computing to user departments for systems to
support departmental activities
 Reduced expense of application development when conducted by end-users (from
departmental rather than information systems budget)
 Better fit between end-user-developed software and their requirements (since no
requirements translation is needed between the users and third-party developers).
End-users are also less likely to ‘over-engineer’ a solution to a basic problem than an
IS professional who will want to treat every problem with rig our.
Fig: A model of IS success that can be applied to end-user developed applications

Stages of development of EUD:
 Isolation: A few scattered pioneers of EUD develop small-scale business tools within
their area. Initially, little support from central IS.
 Standalone: Larger-scale applications that may be of importance to a department
are developed. At this stage, an information centre may be developed to support an
increase in demand for user computing services.
 Manual integration: Here, different end-user applications need to exchange data.
This happens through manual intervention, with files being transferred by floppy
disk or across the network or even with rekeying of information. Information centre
development has continued to support the needs of these larger-scale applications
by providing training and skills and specifying standards for hardware, software
and the development process.
 Automated integration: Users start to link into corporate applications to gain
seamless access to information.
 Distributed integration: At this stage of development, there is a good level of
integration between different end-user applications and corporate systems. Good
standards of metadata (or data describing data in a data dictionary) are required to
help achieve this.
Risk of EUD:
Using information that is out of date
 Information requires export from other information systems before it can be analyzed
by the end-user application
 Corruption of centrally held data by uploading erroneous data
 Development of insecure systems without password control those are vulnerable to
accidental and deliberate damage.
EDU control Approaches:
Training: Provision of relevant training courses both in how to program and in how to
approach systems development in a structured way (the second of these is often omitted).
This happened at the Open University, where many of the end-users wanted to omit the
analysis course.
Suitability review: Authorization of major end-user new developments by business and IS

managers to check that they are necessary (this should not be necessary for smaller-scale
developments since otherwise creativity may be stifled).
Standards for development: Such standards will recommend that documentation and
structured testing of all user-developed software occurs. Detailed standards might include

clear data definitions, validation rules, backup and recovery routines and security
measures.
Guidance from end-user support personnel: IC or help-desk staff can provide training in
techniques used to develop software.
Software and data audits: Regular audits of software produced by end-users should occur
for data and application quality. There is an apocryphal story of a company that had an
end-user-developed spreadsheet for making investment decisions which had an error in a
formula that lost the company millions of pounds each year!
Ensuring corporate data security: Ensure that users are not permitted to enter data
directly into central databases except via applications especially written for the purpose by
the IS department which has the necessary validation rules to ensure data quality. For
analysis of corporate data, data should regularly be downloaded from the central database
to the PC for analysis, where they can be analyzed without causing performance problems
to the corporate system.
Application Package:
There are two main types of computer software; system software and application software.
System software includes the operating system and utility programs. Application software
caries out user-related tasks and can be classified as general-purpose, specialist or tailor-
made.
General-purpose packages A general-purpose application package is a type of software that

can perform many different related tasks.
Word processors, spreadsheets, databases, graphics and presentation software are all
examples of application packages.
This type of software is sometimes called generic software. This means, for example, that
any one of the many different word processing packages that you could buy will all do the
same general sorts of tasks as each other.
Most computer users buy application packages ‘off-the-shelf’. There are several good
reasons for using this type of ready-made software.
 It is relatively cheap;
 It is readily available and can be installed quickly and easily;
 It will have been thoroughly tested so there will be very little chance of it having any
serious faults or ‘bugs’;

 It will be well supported with a lot of books about how to use it available as well as
on-line help and discussions on the Internet.
Common types of general purpose software:
Database packages (e.g. MS Access, Lotus Approach, Paradox) are used to store and
retrieve information;
Spreadsheet packages (e.g. MS Excel, Lotus 123) are used for tasks that involve a lot of
calculations or for the production of graphs and charts;
Word processing packages (e.g. MS Word, WordPerfect) are used to produce text based
documents such as letters, reports and memos;
Desktop publishing (DTP) packages (e.g. MS Publisher, PageMaker, PagePlus) are used
to produce professional quality publications such as posters, books, newsletters,
newspapers and magazines;
Graphics packages (e.g. Paint, PaintBrush, Serif Draw, Corel Draw) are used to produce
and manipulate artwork;
Computer-aided design (CAD) packages (e.g. 2D-Design, AutoCAD, TurboCAD) are

used to produce engineering designs and architectural plans;
Communications software (e.g. Internet Explorer, Netscape Communicator) is used to

access the Internet and send and receive e-mail;
Presentation graphics packages (e.g. PowerPoint, Lotus Freelance) are used to create
slide shows and presentations like this one which can be viewed on-screen or with a data
or overhead projector;
Web page editors (e.g. MS FrontPage, Macromedia Dreamweaver) are used to create
Web pages.
Integrated packages:
An integrated package combines many different types of application together in one

single package.
This type of software normally offers facilities for word processing, spreadsheets,
databases, graphics, presentation and communications.
Integrated packages are much cheaper than buying many different application packages
but their different applications have a limited number of features compared with individual
application packages.

Microsoft WORKS is an example of an integrated package.
Specialist application software:
Specialist application software performs a single very specific type of task.
Programs to work out driving routes are one common example of specialist application
software.
Other examples include programs to work out payroll, calculate accounts, deal with stock
control and handle appointments.
Tailor-made software:
Sometimes an organization finds that ‘off-the-shelf’ software will not do exactly what
they want.
In this case they might decide to have special tailor-made, or bespoke software specially
developed for the purpose.
The main drawbacks of this approach are the high cost and long time that some
programs take to develop.
Outsourcing:
Outsourcing - – “the strategic use of outside resources to perform activities traditionally

handled by internal staff and resources”.
Why Outsource?
– Provide services that are scalable, secure, and efficient, while improving overall service
and reducing costs
Why do Companies Outsource?

Traditional role - reaction to problem
– Reduction and control of costs
– Avoid large capital investment costs
– Insufficient resources available
Modern role – business strategy
– Allows company to focus on their core competencies
– Keeping up with cutting-edge technology
– Creating value for the organization and its customers
– Building partnerships
What can be outsourced?
 system integration
 data network
 mainframe data center
 voice network, internet/intranet
 maintenance/repair
 applications development
 e-commerce
 end-user support system

When to Outsource:
PricewaterhouseCoopers Model:
How to Implement Outsourcing:
 Program initiation
– Opinions and ideas shared to form draft contract
 Program implementation
– Transferring staff
– Service Level Agreement (SLA)
– Establish communications between partners
– Actual transfer of the service
– Establish management procedures
 Contract agreement
 Contract fulfillment
Problems with Outsourcing

 Loss of Control
 Increased cash outflow
 Confidentiality and security
 Selection of supplier
 Too dependent on service provider
 Loss of staff or moral problems
 Time consuming
 Provider may not understand business environment
 Provider slow to react to changes in strategy

Management Information System: Unit - 1

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Management Information System UNIT - 1

Introduction to IS Models and Types of Information systems

What is MIS? Introduction & Definition

MIS is the acronym for Management Information Systems. In a nutshell, MIS is a

The need for MIS

 Decision makers need information to make effective decisions. Management

The major components of a typical management information system are;

 People – people who use the information system

1 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Types of Information Systems

Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Decision Support Systems (DSS)

Manual Information Systems VS Computerized Information Systems (MIS)

Data is the bloodstream of any business entity. Everyone in an organization needs

Manual Information System

The following are the major components of a manual information system

 People –people are the recipients of information system

3 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Advantages and Dis-advantages of a manual information system

The following are the advantages of manual information systems

 Cost effective – it is cheaper compared to a computerized system because there is

The following are some of the disadvantages of a manual information system.

Computerized information system

Computerized systems were developed to address the challenges of manual information

Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information system.

4 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

The following are the advantages of computerized information systems

 It is expensive to set up and configure – the organization has to buy hardware

Nolan Stage Hypothesis:

5 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Figure 1: Diagram showing the SGM continuum for growth/maturity

 Stage 1: Evolution of IT in organisations begins in an initiation stage.

Structure of the Model

In this stage, Information Technology is first introduced into the organisation.

6 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

This introductory technology is simple to use and cheap to implement, which

Stage 1 key points:

 user awareness "Hands Off".

Stage 2 presents some difficulties:

 Project and budgetary controls are not developed, leading to unavoidable a

Stage 2 key points:

7 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Stage 3 is a reaction against excessive and uncontrolled expenditures of time and

 is an outcome of the analysis of how to increase management planning, control and

The major characteristic of Stage 3 is the reconstruction of data processing operations.

Stage 3 key points:

 No reduction in computer use.

Stage 4 key points:

 Rise of control by the users.

Stage 5 – Data Administration

Stage 5 key points:

 Data administration is introduced.

 10% of the work relates to batch and remote job entry.

 Manufacturing control requires forecasting future needs.

Stage 6 key points:

 Systems that reflect the real information needs of the organization.

10 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

11 SHADAN WOMEN’S COLLEGE OF ENGINEERING AND TECHNOLOGY

Figure 1: Ward and Peppard Framework

b. External Business Environment: mapping the economic conditions, industry

d. The external IS/IT Environment: technology trends and opportunities