(YEAR-2024)

SUBJECT - MANAGEMENT INFORMATION

SYSTEMS

COURSE - M.B.A.

SEMESTER- 2nd

FACUTLY NAME - Mr. ANIL KUMAR YADAV

(UNIT-1)
 Management Information System:
MIS is a scientific way of collecting; processing, storing and communicating information relating to the
various activities of an organisation to the various levels of management so that management may be
facilitated in discharging its functions efficiently and run the organisation in an efficient manner for the
betterment of all.

MIS is an organized integration of hardware and software technologies, data, processes, and human
elements. It is a software system that focuses on the management of information technology to provide
efficient and effective strategic decision making.
1. Management: Management is the art of getting things done through and with the people in formally
organised groups.
2. Information: Information is data that is processed and is presented in a form which assists decision-
making. It may contain an element of surprise, reduce uncertainty or provoke a manager to initiate an
action.
3. System: A system is an orderly grouping of interdependent components linked together according to a
plan to achieve a specific goal. The term system is the most loosely held term in management literature
because of its use in different contexts.
MIS is a set of procedures which, when executed, provides information to support decision making.

A Management Information System is

 An integrated user-machine system
 For providing information
 To support the operations, management, analysis, and decision-making functions
 In an organization
The system utilizes
 Computer hardware & software
 Manual procedures
 Models for analysis, planning, control, and decision making, and
 A database
Definition of Management Information System:
“Management Information System (MIS) is an integrated man/machine system for providing information to
hold up the operations, management and decision making functions in an organization”. by G.B. Davis
 Objectives of MIS

What is MIS objective: MIS has five major objectives which include:
1. Data Capturing
2. Processing of Data
3. Storage
4. Retrieval
5. Dissemination

1. Data Capturing
MIS capture data from various internal and external sources of the organization. Data capturing may be
manual or through computer terminals.
2. Processing of Data
The captured data is processed to convert into the required information. Processing of data is done by such
activities as calculating, sorting, classifying, and summarizing.
3. Storage of Information
MIS stores the processed or unprocessed data for future use. If any information is not immediately required,
it is saved as an organization record, for later use.
4. Retrieval of Information
MIS retrieves information from its stores as and when required by various users.
5. Dissemination of Information
Information, which is a finished product of MIS, is disseminated to the users in the organization. It is
periodic or online through a computer terminal.
 Followings are the purpose for the adoption of the MIS:
1. To provide information for planning, organizing and controlling purposes.

2. To store and manage data efficiently from all the functional areas of the business.

3. To process the collected data and derive information out of them.

4. To provide information quickly as and when required.

5. To reduce the risk and uncertainties in the managerial decision-making.

6. To collect and store the data for the purpose of internal research.

7. To assist in identifying the managerial problems and their solution.

8. To provide information regarding work force planning.

9. To provide the information regarding the financial health of the business organization.

10. To provide information regarding production and inventory.

11. To provide information regarding sales and other marketing aspects i.e. product, price, promotion,
market, physical distribution, payment collection, market segmentation etc.

12. To speed up the execution of the results with the reliable data available.

13. To smooth up the flow of data through various levels of the organization.

14. To speed up the execution of the results with the reliable data available.

Need of MIS
A management information system (MIS) plays an important role in business organizations.
The need of MIS is as below..
1. Decision making
2. Coordination among the department
3. Finding out Problems
4. Comparison of Business Performance
5. Strategies for an Organization

1. Decision making
Management Information System (MIS) plays a significant role in the decision-making process of any
organization. In any organization, a decision is made on the basis of relevant information which can be
retrieved from the MIS.
2. Coordination among the department
Management Information System satisfy multiple need of an organization across the different functional
department.
3. Finding out Problems
As we know that MIS provides relevant information about every aspect of activities. Hence, if any mistake is
made by the management then MIS, information will help in finding out the solution to that problem.
4. Comparison of Business Performance
MIS store all past data and information in its Database. That why the management information system is
very useful to compare business organization performance.

5. Strategies for an Organization

Today each business is running in a competitive market. An MIS supports the organization to evolve
appropriate strategies for the business to assent in a competitive environment.

Contemporary Approaches to Information Systems

Multiple perspectives on information systems show that the study of information systems is a
multidisciplinary field. No single theory or perspective dominates. Figure 1-10 illustrates the major
disciplines that contribute problems, issues, and solutions in the study of information systems. In general, the
field can be divided into technical and behavioral approaches. Information systems are socio technical
systems. Though they are composed of machines, devices, and “hard” physical technology, they require
substantial social, organizational, and intellectual investments to make them work properly.
 Technical Approach
The technical approach to information systems emphasizes mathematically based models to study
information systems, as well as the physical technology and formal capabilities of these systems. The
disciplines that contribute to the technical approach are computer science, management science, and
operations research.
1. Computer science is concerned with establishing theories of computability, methods of computation, and
methods of efficient data storage and access.
2. Management science emphasizes the development of models for decision-making and management
practices.
3. Operations research focuses on mathematical techniques for optimizing selected parameters of
organizations, such as transportation, inventory control, and transaction costs.

Behavioral Approach
An important part of the information systems field is concerned with behavioral issues that arise in the
development and long-term maintenance of information systems. Issues such as strategic business
integration, design, implementation, utilization, and management cannot be explored usefully with the
models used in the technical approach. Other behavioral disciplines contribute important concepts and
methods.

The behavioral approach looks at the psychological, sociological and economic aspects of the system. This
approach is fields of an information system that deals with behaviour issues arising from the developed
system and longtime maintenance of the information system also deals with issues that cannot be explode
using formulas.

Behavioural Approach based on the impact of the behaviour and also on the response of the people in the
organization.
1. The sociological approach looks at these aspects from the point of view of how groups work together and
the nature of organisations.
2. The psychological approach looks at how people perceive and use information systems, especially with
respect to decision making.
3. The economic approach looks at how IT systems affect control structures and costs both within a
company and in markets.
 Information as a strategic resource
Business environment is prone to changes and this factor makes business planning very complex. Some
factors such as the market forces, technological changes, complex diversity of business and competition have
a significant impact on any business prospects. MIS is designed to assess and monitor these factors. The MIS
design is supposed to provide some insight into these factors enabling the management to evolve some
strategy to deal with them.
Since these factors are a part of the environment, MIS design is required to keep a watch on environment
factors and provide information to the management for a strategy formulation. Strategy formulation is a
complex task based on the strength and the weakness of the organization and the mission and goals it wishes
to achieve. Strategy formulation is the responsibility of the top management and the top management relies
on the MIS for information.
There are various business strategies such as overall company growth, product, market, financing and so on.
MIS should provide the relevant information that would help the management in deciding the type o f
strategies the business needs. Every business may not require all the strategies all the time.
The business does not survive on a single strategy but it requires a mix of strategy operating at different
levels of the management. For example, when a business is on the growth path, it would require a mix of
price, product and market strategies. If a business is showing a decline, it would need a mix of price-
discount, sales promotion and advertising strategies.

Information is Strategic Resources. Because Information helps in taking Strategic, Tactical and
operational Decisions. It is one of critical and importance resource.

1. It helps us understand Cost, Quality, price, technology, productivity and product.

2. It helps to smooth following of business process and smooth managing of business operation.
3. It helps to maintain the business standards like ISO, QS, CMMI, Six Sigma etc.
4. It helps to be ahead in the competition
5. It helps company in analyzing their own SWOT
6. It helps in maintaining its own profitability.
7. It will help in taking new business decisions like new plant, new product, new business line etc.
8. It protects company from business cycles.
9. It provides future direction to the organization.
10. It provides the competitive edge.
 Use of information for Competitive Advantages
The study of information management entails an understanding of information and communication
technology also. However, information management is a distinct subject not related (other than the practical
considerations of providing the output information timely and accurately) to information and communication
technology. Let us now delve deeper into the subject to get a clear understanding of the basic concepts that
drive management information systems.
As is clear, the advantage that a modern corporate house enjoys can be traced to its management of
information. If the business house cannot manage its information, then it is likely that it will not have any
competitive advantage. Typically an organization can develop competitive advantage if it can, does or have
what others can’t, do or have. In modern times, the advantages on account of raw materials, technological
edge, etc., is being neutralized by the forces of modern business. The last frontier so to say is information
management. Companies that have managed to do it successfully like Dell, Google, etc., have generated an
unparalleled competitive advantage as their reaction time to changes in the market and/or competition is
much less and hence, they can shift business gears faster than their competitors and hence the advantage.
Competitive advantage through managing information can accrue to an organization if it:
• Manages information to reduce reaction time for change
• Managing information makes the organization efficient
• Information management leads to insights into the business that the competitors cannot have
• Information management is used for predictive analysis so that the organization is one step ahead of
competition.
Strategic Information System can offer competitive advantage to an organization:
1) Generating databases to improve marketing: An information system also provides companies an edge
over their competition by generating databases to improve their sales and marketing strategies. Such systems
treat existing information as a resource. For example, an organization may use its databases to monitor the
purchase made by its customers, to identify different segments of the market, etc.
2) Creating barriers to competitor’s entry: In this strategy, an organization uses information systems to
provide products or services that are difficult to duplicate or that are used to serve highly specialized markets.
This prevents the entry of competitors as they find the cost for adopting a similar strategy very high.
3) ‘Locking in’ customers and suppliers: Another way of gaining competitive advantage is by locking in
customers and suppliers. In this concept, information systems are used to provide such advantages to a
customer or a supplier, that it becomes difficult for them to switch over to a competitor. For example, an
organization may develop its information system and give many benefits to its customers, like reliable order
filling, reduced transaction costs, increased management support and faster delivery service.
4) Leveraging technology in the value chain: This approach pinpoints specific activities in the business
where competitive strategies can be best applied and where information systems are likely to have a greater
strategic impact. This model advocates that information technology can best be used to gain competitive
advantages by identifying specific, critical leverage points.
5) Lowering the costs of the products: strategic information systems may also help organizations lower
their internal costs, allowing them to deliver products and services at a lower price than their competitors can
provide. Thus, such information systems can contribute to the survival and growth of the organization. For
example, airlines use information systems strategically to lower costs so that they may counter competitor’s
discount fares.
MIS as an Instrument for the Organizational Change

Management Information Systems (MIS) can play a critical role in facilitating organizational change by
providing timely and accurate information that supports decision-making and enables organizational agility.
Here are some ways in which MIS can serve as an instrument for organizational change:

1. Facilitating Collaboration and Communication: MIS can help facilitate collaboration and
communication within an organization by providing a centralized platform for employees to share
information and work together on projects. This can improve team collaboration, knowledge sharing, and
innovation.

2. Enabling Data-Driven Decision Making: MIS can provide real-time information about business
operations, enabling decision-makers to make informed decisions based on data rather than intuition or
guesswork. This can help organizations to identify and respond quickly to changes in the business
environment.

3. Supporting Process Optimization: MIS can help organizations optimize business processes by
identifying bottlenecks and inefficiencies, tracking performance metrics, and providing insights into process
improvements. This can enable organizations to streamline their operations, reduce costs, and improve
overall efficiency.

4. Managing Change Processes: MIS can be used to manage change processes within an organization by
tracking progress, monitoring risks and issues, and providing a platform for communication and
collaboration. This can help to ensure that change initiatives are implemented effectively and with minimal
disruption to business operations.

5. Improving Customer Experience: MIS can enable organizations to better understand their customers and
provide personalized experiences that meet their needs. This can be achieved by leveraging customer data
and analytics to gain insights into customer behavior, preferences, and needs, and using this information to
develop targeted marketing campaigns and personalized offerings.
 Information Technology

1st century has come to be known as the era of Information Technology; it is the key driver of economic
growth of not only a nation, but rather the whole world.

The growth and progress of every sector of the country today depends on the level of Information
Technology.

Furthermore, technology is not important only at the work place, but also in our everyday life; whether it is
working with the microwave oven which is a cooking appliance or a super computer, an appliance is based
on information technology, technology helps everywhere.

From hi-tech industry to an education system, Information Technology footprints can be seen everywhere.

Likewise, Information Technology is one of the essential features for the overall development of a country.

Meaning of Information Technology

The technology, which is exclusively designed to store, process, and transmit information, is known as
Information Technology.

The following diagram illustrates the basic features and applications of Information Technology

Though the diagram given above is not inclusive, as it does not include every aspect and application of
information technology, but it comprehensively covers the major aspects.

Important Features of Information Technology

Following are the major features as well as advantages of Information Technology −

 The development of Information Technology has made education system simpler, easier, and
widespread. Now, people of remote areas can also use technology for their children’s education and
also avail the benefits of adult education.
  Diffusion of e-governance on a large scale.

 Participation of public in governance and policy making.

 Fast economic development.

 Development of remote areas.

 Technology helps the police in nabbing the criminals.

 The judiciary and other administrative services can also take the help of technology to make work
easier and faster.

 Highly beneficial for the common people, as they can access their rights and can take legal action
against the person who violates his/her rights.

 It increases the happiness and prosperity of not only an individual, but rather the society as a whole.

Besides, there are many other advantages too that can be availed in our everyday life only with the further
development of information technology.

Emerging Trends in the Information Technology

Some of the emerging trends in the information technology are as follows:

To help meet the demands of a technology-enabled consumer base, solution providers must embrace digital
transformation to realize their full potential. But, where to begin? These are the top 15 emerging technologies
that businesses need to keep an eye on in 2021.

1. Artificial Intelligence (AI)

Artificial intelligence is poised as a tool of choice for businesses and solution providers. As is often seen with
social media, AI, combined with machine learning, deep learning and neural networks, can be a powerful
combination. Businesses can use AI to achieve cost-saving benefits, streamline workflows, improve the
customer experience, enable more efficient communications through chatbots, increase customer satisfaction,
and provide insight into purchasing behavior.
2. Block chain
The block chain is an information system that holds promise for supply chain management, enabling
transparency into the journey of materials from origin to product. Blockchain technology will also allow for
better record management, providing a snapshot of any record from its origination. This could be used to
verify orders, purchases, returns, receipt of product—you name it.
3. Computer Vision
This field allows computers to derive meaning from visual input, and then take action or make decisions
based on that data. Computer vision requires a huge amount of data to train algorithms to understand subtle
differences and recognize different visual inputs. There is significant business potential for computer vision,
which could inspect products and processes as part of quality control to analyze for nearly imperceptible
differences and imperfections. Business applications include using Google Translate to translate signage to a
native language and making sense of traffic signs in self-driving cars.
4. Customer Data Platforms
If data is the new gold, then customer data platforms are the new banks. Businesses benefit from knowing as
much about customers as possible so that they can hyper-personalize experiences and know how best to
reach and engage prospects and customers. But often, knowledge is disparate, located across several systems
or platforms with no single unifying source. Customer data platforms bring this information together into a
single source to provide a comprehensive picture of consumers and eliminate the potential for unclean data.
5. Digital Health
If COVID-19 left a legacy that will remain, it’s digital health. As patients became unable to visit doctor’s
offices and hospitals, digital health rose to fill the gap. But now that hurting or sick individuals have realized
there are opportunities for receiving appropriate healthcare without in-person visitation, they are taking
advantage of that opportunity.
6. Internet of Behaviors (IoB)
As the world becomes more digitized, informed business is the key to success and the internet of behaviors
or IoB provides greater clarity into consumer behavior. For those companies wanting to keep a competitive
advantage, the IoB is offering opportunities in the form of data collection and analysis regarding consumer
interactions, preferences and purchasing behavior.
7. Low-Code Technology
Low-code technology is bringing software development to those without a high level of technical knowledge.
Traditional software development is a long, arduous process, requiring a high level of programming
knowledge and a significant time investment. With low-code technology, software can be developed with a
drag-and-drop interface and no extensive backend coding. This allows business users to solve a variety of
specific challenges without needing to engage a highly technical resource.
8. Robotic Process Automation (RPA)
Robotic process automation is a term that is gaining ground recently. The name is something of a misnomer
however, as there are no physical robots involved in these tasks. RPA involves automating tasks using bots
that previously required human labor and follow a repetitive pattern to accomplish more of these computer-
based tasks with enhanced efficiency. Many businesses are embracing RPA to help achieve more efficient
workflows for rule-based tasks.
9. 5G in Everyday Life
The speeds accomplished with 5G greatly outpace those seen with previous networks. 5G networks offer the
supporting foundation that businesses can leverage to embrace many upcoming disruptive technologies. But
in recent times, 5G technology hasn’t gained the momentum that was anticipated. In 2021, it’s projected that
infrastructure will finally reach a viable point and devices will become affordable enough so we can actually
leverage the power of 5G.
Impact of IT on Organization
Information technology systems are used by organizations to perform various tasks. Some use IT to provide
for the basic processing of transactions, while others enable customers, distributors and suppliers to interact
with the organization through various communication technology systems such as the internet.

The term ‘’information technology systems in an organization ‘’ is composed of four distinct parts which
include: an organization, information in an organization, and information technology and information
technology systems in an organization.

1. Flow of Information: Information is a key resource for all organizations. What information describes
might be internal, external, objective or subjective.
External information describes the environment surrounding the organization.
Objective information describes something that is known.
Subjective information describes something that is currently unknown. With information technology the
flow of all these three types of information is made simple buy use of centralized data centers where all this
data can be retrieved. Information in an organization can flow in four direction and these include upward
flow of information, downward flow of information, outward flow of information and horizontal flow of
information.

2. Transaction Processing: Information technology simplifies the transaction process of an organization. A

transaction process system (TPS) is a system that processes transactions that occur within an organization.
At the heart of every organization are IT systems whose main role is to capture transaction information,
create new information based on the transaction information. TPS will update any transaction process and
store that information in a database, so any concerned party in the organization can access that information
via a centralized information storage network of internet.
3. Decision Support: A decision support system (DSS) is a highly flexible and interactive IT system that is
designed to support decision making when the problem is not structured. A DSS works together with an
artificial intelligence system to help the worker create information through (OLAP) online analytical process
to facilitate decision making tasks that require significant effort and analysis.
4. Workgroup Support: Since information technology facilitates in the creating an information sharing
environment, workers can easily consult each other across different department without any interruption.
They can use emails, text chatting services to inquire some thing related to a given task at work. With work
group support systems, group decision making becomes easier.
5. Executive Support: An executive information system (EIS) is an interactive management information
system (MIS) combined with decision support systems and artificial intelligence for helping managers
identify and address problems and opportunities. An EIS allows managers to view information from different
angles. Yet it also provides managers with the flexibility to easily create more views to better understand the
problem or opportunity at hand.
6. Data Management: With the help of database software, an organization stores all its relevant data on a
database. This infrastructure can be designed when it is internal or external. An internal centralized system
can only be accessed with in the organization while an external centralized system allows data to be accessed
out side the organization using a remote (IP) internet protocol Address or a domain name. In this case,
employees or managers can use a company website to access relevant company data by use of passwords.
This data is not exposed to the public and search engines.
7. Communication: Information technology accounts in the development of communication technology.
Services like electronic mail make communication within and outside the organization easy and first. Now
days email communication is a default communication technology used by every organization.
Communication is a great tool in business develops, with advanced communication tools, employees and
managers can easily make beneficial decisions in the organization.
IT enabled Services

The full form of ITES is Information Technology Enabled Services. ITES is a term that refers to the use of
information technology (IT) to deliver a range of services to businesses and organizations. It includes a wide
range of activities, such as data processing, customer support, technical support, and consulting. ITES has
become an important part of the global economy, as it allows businesses to outsource certain services to
specialized companies and individuals, which can often provide these services more efficiently and at a lower
cost.

What is Information Technology Enabled Services

Information Technology Enabled Services (ITES) is a term used to describe a wide range of services that are
enabled by information technology (IT). ITES includes a variety of business processes that are delivered
electronically or through the use of IT tools and platforms. Some common examples of ITES include:

1. Business process outsourcing (BPO): This involves outsourcing certain business processes, such as
customer service, finance and accounting, or HR, to a third-party provider.
2. Knowledge process outsourcing (KPO): This involves outsourcing more specialized or complex
processes, such as research and development, legal research, or market analysis, to a third-party
provider.
 3. Electronic data interchange (EDI): This involves the electronic exchange of business documents,
such as invoices, purchase orders, and shipping notices, between organizations.
4. Computer-aided design (CAD): This involves using computer software to create and modify
technical drawings and designs.
5. Digital marketing: This involves using digital channels and platforms, such as social media, email,
and websites, to promote products and services and reach customers.

ITES is a rapidly growing sector in many countries and is seen as a key driver of economic development and
innovation.

Indian Information Technology Enabled Services (ITES) Companies

Indian Information Technology Enabled Services (ITES) companies are companies that provide services
such as customer support, back-office support, and business process outsourcing (BPO) using information
technology (IT). Some examples of ITES companies in India include:

1. Tata Consultancy Services (TCS)

2. Infosys
3. Wipro
4. HCL Technologies
5. Tech Mahindra
6. Genpact

These companies offer a wide range of ITES services to clients around the world, including customer
support, technical support, data entry, and more. Many of these companies have established a strong presence
in the global ITES market and are known for their high-quality services.

Advantages of Information Technology Enabled Services (ITES)

There are several advantages to using Information Technology Enabled Services (ITES) in business,
including:

1. Cost savings: ITES can help reduce costs by eliminating the need to hire and train in-house staff to
handle certain tasks, such as customer service or data entry. It can also help reduce the cost of
hardware and software, as many ITES providers offer access to their own IT infrastructure.
2. Improved efficiency: ITES can help streamline business processes and increase productivity by
automating tasks and enabling real-time data exchange and collaboration.
 3. Access to expertise: ITES providers often have specialized knowledge and expertise in areas such as
data analytics, digital marketing, and software development. Outsourcing these tasks to ITES
providers can help organizations access this expertise without the need to hire and train in-house
staff.
4. Flexibility: ITES allows organizations to scale up or down their use of services as needed, giving
them greater flexibility to respond to changing business needs.
5. Global reach: ITES providers often have a global presence, which can help organizations expand
their reach and access new markets.

Overall, ITES can help organizations reduce costs, increase efficiency, and access specialized expertise,
which can lead to increased competitiveness and profitability.

Challenges of Information Technology Enabled Services (ITES)

There are several challenges that companies in the Information Technology Enabled Services (ITES)
industry may face, including:

1. Competition: The ITES industry is highly competitive, with many companies offering similar
services. This can make it difficult for companies to stand out and attract new business.
2. Cost: Providing ITES can be expensive, particularly if a company needs to invest in new technology
or hire specialized personnel.
3. Quality control: Ensuring the quality of ITES can be a challenge, as it can be difficult to monitor the
work of employees who are located remotely or working on complex projects.
4. Security: Protecting sensitive data and maintaining the security of IT systems can be a major concern
for ITES companies, as data breaches or other security incidents can have serious consequences.
5. Talent retention: Attracting and retaining highly skilled employees can be a challenge for ITES
companies, as there may be strong competition for top talent.
6. Cultural differences: Working with clients and employees from different cultural backgrounds can
present challenges, such as differences in communication styles and business practices.
 Transaction Processing System

A transaction processing system (TPS) is a computerized system that manages all of a company’s business
transactions. These transactions involve recording, retrieving, and modifying data. For example, when you
make a purchase online, the TPS processes your order, updates the inventory, and credits the seller’s account.

Examples of the transaction processing system

Transaction processing systems are essential for businesses, handling daily financial transactions. Here are

some real-world examples of TPS you might encounter:

* Retail

Point-of-Sale systems: When you swipe your card at Walmart, the Square Point-of-Sale system (or a similar

system from other providers) is a TPS in action. The system captures your purchase information, updates

inventory levels, and finalizes the transaction using your bank card.

* Banking

ATMs: Withdrawing cash or checking your balance at an ATM involves a TPS. It verifies your identity,

retrieves your account information, updates your balance, and dispenses the cash.

* E-commerce

Online shopping platforms: Adding items to your cart and checking out on an e-commerce website like

Amazon relies on a TPS. It processes your order details, verifies your payment information, and updates the

inventory for those items.

Characteristics of Transaction Processing System
1. Performance

Fast performance with a rapid response time is critical. Transaction processing systems are usually measured
by the number of transactions they can process in a given period of time.
2. Continuous availability

The system must be available during the time period when the users are entering transactions. Many
organizations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business.

3. Data integrity

The system must be able to handle hardware or software problems without corrupting data. Multiple users
must be protected from attempting to change the same piece of data at the same time, for example two
operators cannot sell the same seat on an airplane.
4. Ease of use

Often users of transaction processing systems are casual users. The system should be simple for them to
understand, protect them from data-entry errors as much as possible, and allow them to easily correct their
errors.

5. Modular growth

The system should be capable of growth at incremental costs, rather than requiring a complete replacement.
It should be possible to add, replace, or update hardware and software components without shutting down the
system.
Importance of Transaction processing systems

Transaction processing systems offer numerous benefits for businesses by streamlining processes and
automating tasks. These advantages include:

1. Increased efficiency and productivity- The system automates manual tasks, allowing employees to focus
on critical areas and improve overall efficiency.

2. Improved accuracy and reduced errors- By automating data capture and validation, the payment system
minimizes human errors, resulting in more reliable financial records.

3. Improved scalability and growth- It can easily handle increasing transaction volumes, making it scalable
to accommodate business growth.

4. Global reach- With TPS in place, businesses can facilitate online transactions, expanding their reach to a
wider customer base and operating in a global marketplace.

5. Cost savings- Automating tasks and streamlining processes with transaction processing systems can lead
to significant cost savings in the long run.

While TPS directly benefits businesses, it indirectly improves the customer experience through faster

transactions, better accuracy, and potentially a wider range of products and services.