BUSINESS APPLICATION OF MIS

Management information systems (MIS) provide data to inform company decision making,
reduce waste and increase profits. MIS in company management provides a broad picture
of company performance, acts as a planning tool, emphasizes strengths and weaknesses,
helps improve performance and illuminates levels of organizational efficiency. All levels of
management, departments and even customers can use the information generated
through various MIS data to inform decisions like buying, hiring, reorganizing, pricing,
marketing and budgeting.
MIS APPLICATION IN BUSINESS
MIS application in business falls into several different categories that provide information
on all forms of functioning within an organization. Executives and departments within an
organization could obtain any of the following forms of data:
 Business Intelligence System: In BI, all levels of management and executives can print data
and graphs showing information or trends relating to growth, costs, strategic control,
efficiency, risk and performance.
 Executive Information System: An EI system provides the same information as a BI
system, but with greater attention to detail and more confidential information, designed to
help top-level executives make choices that impact the entire organization.
 Marketing Information System: MI systems provide data about past marketing campaigns
so that marketing executives can determine what works, what does not work and what
they need to change in order to achieve the desired results.
 Transaction Processing System: TPS handles sales transactions and makes it possible for
customers to sort search results by size, color or price. This system can also track trends
related to sales and search results.
 Customer Relationship Management System: Keeping up with customers is key to overall
success, and CRMS helps companies know when and how to follow up with customers in
order to encourage an ongoing sales relationship with them.
 Sales Force Automation System: Gone are the days when sales teams must do everything
manually. SFA systems automate much of what must be done for orders and to obtain
customer information.
 Human Resource Management System: HRM systems track how much employees are paid,
when and how they are performing. Companies can use this information to help improve
performance or the bottom line.
 Knowledge Management System: Customers with questions want answers right away and
knowledge management systems allow them to access frequently asked questions or
troubleshoot on their own timetable.
 Financial Accounting System: Financial accounting systems help to track accounts
receivable and accounts payable, in order to best manage the cash flow of a company.
 Supply Chain Management System: SCM systems record and manage the supply of
finances, goods and data from the point of origin domestically or abroad, all the way to its
destination in the hands of a customer.
 Electronic Commerce
E-Commerce or Electronic Commerce means buying and selling of goods, products, or
services over the internet. E-commerce is also known as electronic commerce or internet
commerce. These services provided online over the internet network. Transaction of money,
funds, and data are also considered as E-commerce. These business transactions can be done
in four ways: Business to Business (B2B), Business to Customer (B2C), Customer to
Customer (C2C), Customer to Business (C2B). The standard definition of E-commerce is
a commercial transaction which is happened over the internet. Online stores like Amazon,
Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are examples of E-commerce websites.

E-commerce is a popular term for electronic commerce or even internet commerce. The
name is self-explanatory, it is the meeting of buyers and sellers on the internet. This involves
the transaction of goods and services, the transfer of funds and the exchange of data.

Types of E-Commerce Models

Electronic commerce can be classified into four main categories. The basis for this simple
classification is the parties that are involved in the transactions. So the four basic electronic
commerce models are as follows,

1. Business to Business

This is Business to Business transactions. Here the companies are doing business with each
other. The final consumer is not involved. So the online transactions only involve
the manufacturers, wholesalers, retailers etc.

2. Business to Consumer

Business to Consumer. Here the company will sell their goods and/or services directly to the
consumer. The consumer can browse their websites and look at products, pictures, read
reviews. Then they place their order and the company ships the goods directly to them.
Popular examples are Amazon, Flipkart, Jabong etc.

3. Consumer to Consumer

Consumer to consumer, where the consumers are in direct contact with each other. No
company is involved. It helps people sell their personal goods and assets directly to an
interested party. Usually, goods traded are cars, bikes, electronics etc. OLX, Quikr etc follow
this model.
4. Consumer to Business

This is the reverse of B2C, it is a consumer to business. So the consumer provides a good or
some service to the company. Say for example an IT freelancer who demos and sells his
software to a company. This would be a C2B transaction.

Examples of E-Commerce
 Amazon

 Flipkart
 eBay
 Fiverr
 Upwork
 Olx
 Quikr
Advantages of E-Commerce

 E-commerce provides the sellers with a global reach. They remove the barrier of place
(geography). Now sellers and buyers can meet in the virtual world, without the
hindrance of location.
 Electronic commerce will substantially lower the transaction cost. It eliminates many
fixed costs of maintaining brick and mortar shops. This allows the companies to enjoy a
much higher margin of profit.
 It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves time, energy
and effort for both the consumers and the company.
 One other great advantage is the convenience it offers. A customer can shop 24×7. The
website is functional at all times, it does not have working hours like a shop.
 Electronic commerce also allows the customer and the business to be in touch directly,
without any intermediaries. This allows for quick communication and transactions. It
also gives a valuable personal touch.
Disadvantages of E-Commerce

 The start-up costs of the e-commerce portal are very high. The setup of the hardware
and the software, the training cost of employees, the constant maintenance and upkeep
are all quite expensive.
 Although it may seem like a sure thing, the e-commerce industry has a high risk of
failure. Many companies riding the dot-com wave of the 2000s have failed miserably.
The high risk of failure remains even today.
 At times, e-commerce can feel impersonal. So it lacks the warmth of an interpersonal
relationship which is important for many brands and products. This lack of a personal
touch can be a disadvantage for many types of services and products like interior
designing or the jewelry business.
 Security is another area of concern. Only recently, we have witnessed many security
breaches where the information of the customers was stolen. Credit card theft, identity
theft etc. remain big concerns with the customers.
 Then there are also fulfillment problems. Even after the order is placed there can be
problems with shipping, delivery, mix-ups etc. This leaves the customers unhappy and
dissatisfied.
 E-Payment System
E-Payment System It’s a payment mechanism which enables individuals, businesses,
government and nonprofit organisations to make cashless payments for goods and
services through cards, mobile phones over the internet. Examples : payment through
debit card, credit card, smart card, net banking etc

Advantages of E-Payment
• Increased speed and convenience
• Eliminates the security risks
• Competitive advantage
• Time saving
• Environment friendly

Disadvantages of E-Payment
• Security concerns
• Disputed transactions
• Increased business costs
• Lack of anonymity
• Necessity of internet

E-Payment Modes

Credit cards Debit cards Smart card Digital Cash E-Wallet

Credit Cards Credit is small plastic card with a unique number linked with an account. It
has magnetic strip or chip embedded init which is used to read by credit card reader.

Parties involved in credit card payment :

•A cardholder obtains a credit or debit card from an issuing bank, uses the account to pay
for goods or services.
•A merchant is any type of business that accepts card payments in exchange for goods or
services.
•A merchant bank establishes and maintains merchant accounts. Merchant banks allow
merchants to accept deposits from credit and debit card payments.
•Payment processors are companies that process credit and debit card transactions.
Payment processors connect merchants, merchant banks, card networks and others to
make card payments possible.
•Issuing banks are the banks, credit unions and other financial institutions that issue debit
and credit cards to cardholders through the card associations.
•Card associations include Visa, Mastercard, Discover and American Express. The card
associations set interchange rates and qualification guidelines, and act as the arbiter
between issuing banks and acquiring banks among other vital function
Debit Card

Debit card is also like credit card. It is required to have a bank account before having debit
card. How to Use a Debit Card Online? If you're paying for something online, you can use
your Debit Card. Here is a step-by-step guide to help you complete your payments online
using Debit Cards-

•Once you are at the payment checkout, you need to choose “Pay Using Debit/ Credit Card.
Once you select on the option, you need to specify the type of card, i.e., Debit Card and
whether it is a Visa or Mastercard.
•Then, type the 16-digit Debit Card number which is on the front side of your Debit Card.
You will also have to enter the expiration date of the card.
•Once you’ve entered the Debit Card details, you may be asked for a CCD, CVV, or similar
security code. In most cases, it is a three or four- digit code that helps prove that you are
authorised to use the card. This code is mostly found on the back of the cards.
•Once you are through the payment portal, you will be asked to enter a unique transaction
code or an OTP (one-time password) that is sent to the mobile number linked to your
Debit Cards. Once you enter the number, your transaction is verified, and you receive a
notification.
•To use a Debit Card online, you will need to know the correct billing address which is
linked to the card being used.

Smart Card

Secure and reliable Smart Card has played a key role in improving multifaceted digital
security. A smartcard is capable of storing and processing the data securely in a network
of computers. The scope of smart cards is increasing day by day in diverse applications
like banking, telephone services, and medical records systems etc. Smart-Card is a secure
portable storage device which is used in various applications requiring controlled access
to sensitive information. It is in the size of a credit/ debit card, incorporated with one or
more integrated circuit chips. It functions as a microprocessor, memory and provides an
input-output interface. The International Organization for Standardization (ISO) specifies
certain voluntary international standards in many scientific and technological fields.
However, till to date, ISO has not defined any standards for the device streamed as “Smart
Cards.
• How does the Smart Card Works?
• A smart card is connected to the host computer or controller via a card reader which
gets information from the smart card and accordingly passes the information to the host
computer or controller.
• Advantages of Smart Card:
• Might be promptly reconfigured
• Reusable
• Secure transactions
• Gives more security
• More tough and dependable
• Permit numerous provisions to be saved in one card

Digital Cash

What is Digital Cash?

Digital Cash acts much like real cash, except that it’s not on paper. Money in your bank
account is converted to a digital code. This digital code may then be stored on a microchip,
a pocket card (like a smart card), or on the hard drive of your computer. The concept of
privacy is the driving force behind digital cash. The user of digital cash is assured an
anonymous transaction by any vendor who accepts it. Your special bank account code can
be used over the internet or at any participating merchant to purchase an item. Everybody
involved in the transaction, from the bank to the user to the vendor, agree to recognize the
worth of the transaction, and thus create this new form or exchange.

How does Digital Cash work?

• This example shows how digital cash might work through a banking institution. The
bank creates a digital bank note by signing a message which specifies the serial number
(with a primary or public key) and value of the note, and sends it to Person A. Person A, as
he withdraws it, uses Chaum's technique (A Cryptography technique) to alter the serial
number so that the bank will not recognize the note as being from this withdrawal. This
note is now returned to the bank with the new serial number. The bank now has a note
with a new serial number. Person A then pays Person B electronically by sending the bank
note to him. Person B checks the note's validity by decrypting using the bank's public key
to check its signature (new serial number validity). Person B then sends the note to the
bank, which checks the serial number to confirm that this banknote hasn't been spent
before. The serial number is now different from that in Person A’s withdrawal, there by
pre- venting the bank from linking the two transactions. The enabling bank merely checks
the new serialized key account for the amount of the transaction and transfers the money
by sending out a depository notice. Person B using the same encrypting technique returns
the depository notice with the new serialize account. The enabling bank does not know
who the merchant is only that money is available for payment. In some respects, this is a
debit card transaction with no information other than the amount of the transaction. All
initial depositor information is in the primary key account not the password account.
Special software to enable these dual track procedures was developed by Digi cash.
However this venture was not successful, nor was it successful for its successor
corporation, Cyber Cash, Inc.

Online Banking
Online banking allows a user to conduct financial transactions via the Internet. Online
banking is also known as Internet banking or web banking. Online banking offers
customers almost every service traditionally available through a local branch including
deposits, transfers, and online bill payments.

With online banking, consumers aren't required to visit a bank branch to complete most of
their basic banking transactions. They can do all of this at their own convenience,
wherever they want—at home, at work, or on the go. Online banking requires a computer
or other device, an Internet connection, and a bank or debit card. In order to access the
service, clients need to register for their bank's online banking service. In order to
register, they need to create a password. Once that's done, they can use the service to do
all their banking. Banking transactions offered online vary by the institution. Most banks
generally offer basic services such as transfers and bill payments. Some banks also allow
customers to open up new accounts and apply for credit cards through online banking
portals. Other functions may include ordering checks, putting stop payments on checks, or
reporting a change of address. Checks can now be deposited online through a mobile app.
The customer simply enters the amount before taking a photo of the front and back of the
check to complete the deposit.

EFT

• What is EFT?

• An electronic funds transfer (EFT) is any transfer by two corresponding banks or

financial institutions that is strictly handled by computerized systems. In other words, this
is a broad term for modern transaction methods. As long as it doesn’t involve direct
human contact and is facilitated through a computer, then it’s considered an EFT. You can
think of it as an umbrella term of sorts, so EFTs can be wire transfers, direct debits, ACH
payments, and more. EFTs has exploded in popularity following the invention of the
internet, e Commerce, and digital cash. Virtually all components of a traditional
transaction are being digitized — invoices, receipts, payments, and EFT systems are an
essential component of this. So why accept electronic checks, digital debit transactions,
etc. if credit cards are so popular these days?

• Cost and convenience.

• EFTs are significantly cheaper than credit cards — averaging at around 1% in fees as
opposed to 3% or so for cards. For businesses of alltypes and sizes, this offers a significant
incentive to support and encourage customers to use EFT methods.

• While features and specifics change payment type to payment type, there are some
common characteristics across all EFT payment types.
 Funds are typically transferred with 24-48 hours. Fees typically hover around 1%  EFTs
are popular for recurring debits and credits.  Customers enjoy having the payment
flexibility EFTs offer.

ACH

• ACH, or automated clearing house, is like a check without the paper.

• It’s a computer-based clearing and settlement facility that exchanges funds between two
depository institutions. ACH is most commonly used in recurring invoicing (monthly auto-
drafts) and direct deposit programs. ACH is cheap to send money with and relatively easy
to set up, making it an attractive option for businesses that conduct large, recurring bills
(think B2B or consulting fees).

Risks in E-Payment

• Disputed Transaction
• Lack of security or trust
• Lack of Account trail
• Lack of anonymity
• Impulse buying
• Payment conflicts
• Frauds - phishing , skimming , impersonating
• Costing
• Technological failure