MIS555: Management Information System MBA 2th Semester|Rajrshi Janak University

Unit-1
Foundation concept

Management:
Integration of different activities such as planning, organizing, directing etc. is known as
management.

The management involves the following activities:

1. Planning: Deciding what to be done?
2. Organizing: Making arrangements.
3. Staffing: Selecting the right people for the right jobs.
4. Directing: Giving instructions.
5. Monitoring: Checking on progress.

6. Controlling: Taking action to remedy hold ups.

7. Innovating: Coming up with new solutions.
8. Representing: Coordinating with uses.

DATA:-
Data is a collection of raw facts and figures which is isolated, un-interpreted, unrelated and
unorganized, but able to organized into useful information. Data can be manipulated to produce
output. Data are the raw facts from which we start to get information. Example: Priya, 1,
Janakpur, etc.

INFORMATION:-
When we supply data to a system then the system processes and generates meaningful result
which is called information. Hence, the result of data processing which gives complete sense or
meaning is called information. As it is processed data, it helps in decision making. For example:
simply saying 30 does not signify anything but when we say Rs. 30, it becomes information.

SYSTEM:-
The English word ‘system’ is derived from the Greek word ‘Systema’ which means an organized
relationship among components. A collection of components or elements that works together to

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perform a specific task is called a system. For example: human body, computer system, result
processing system, banking system, etc.

A system must have an input unit to feed data to the system, processing unit to process the
supplied data and an output unit to display the processed data. If expected output is not obtained
then the process is related with suitable feedback supplied as input which makes system stable.

INFORMATION SYSTEM(IS):-
An information system is a computer-based system which is an integrated set of different
components for collection, process, storage and transmission of data. Simply, it is a system
which processes supplied/collected data and generates information that can be used for decision
making at different levels for the betterment of an organization. So, the main goal of information
system is to generate information that helps in decision making.

COMPONENTS OF INFORMATION SYSTEM:-

An information system has five key components. They are discussed below:-

1. HARDWARE:-Hardware refers to the physical layer of the information system.

Hardware includes computers, networks, communication components, scanner, digital
capture devices, etc.
2. SOFTWARE:- Software refers to the logical layer of information system that makes
hardware function properly. It includes system software (OS, device driver, etc.) and
application software (MS-office Package, library management system, etc.).
3. DATA:- Data is a raw facts, figures and measurements, etc. which are used as input for
the system. It may be alphabets, digits, figures, and other symbols.
4. PROCESSES:- Processes or procedures, describes the tasks that users, managers, and IT
staff members perform.
5. PEOPLE:- People refers to the users who interact with information system. The user
within the organization include managers, technicians, sales representatives, corporates
officers, etc. are called internal users and the users outside the organization include
customers, suppliers, etc. are called external users.

Q. Why do we need a computer based information system?

Ans. We need computer based information system because:-

I. The size of organization is becoming large. Computer based information system helps
to run organization efficiently.
II. Some data can be processed in different ways, i.e. manner can look at the
performance of an organization in different angles.
III. Organizations are distributed with many branches. So, exchange of data or
information between branches and organization is essential.

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IV. Account package can be maintain, update and retrieval of data.

V. Processing of data is in high speed.

Role of information systems in business today:

1. Decision making:
In an organization or business the managers need to make decisions all the time. The
decision must be backed by quality judgment of the situation and its implications. Data
collected, compiled and presented in a simple way helps managers understand the
position of the organization and take appropriate decisions. For example the final report
of a company shows the companies sources of funds and it applications for return. If
there are more sources of funds available then the manger has to find good investment
opportunities.
2. Operations management:
Information system is used to manage every day operation in an organization such as
employee monthly salary, taxes, attendance, leave records, record income and expenses,
receivables, procuring goods etc. Daily tasks or operations management to keep records
or follow up on supplies, creditors, and inventory is made easier with the help of IS. For
example software used by IME money transfer helps people to send money from one
place to another, department stores such as Bhatbhateni, big mart use software to track
their stock and keep record of daily transactions.
3. Customer interactions:
IS also helps in customer interaction. Few forms of customer interactions based on IS that
IS use are ATM machines, recharge card in mobiles, monthly bill or registering
complains in the Nepal Telecom etc. Thus the implication of the use of IS for customer
interaction is gaining more popularity. With online shopping in hamro bazar, sasto deal,
flipcart etc. are some of the more successful organizations that have used IS for customer
interactions.
4. Collaboration on teams:
IS has made the world a smaller place. With connectivity available communication has
increased a lot. People can conduct meeting from different countries through skype.
Friends and family members can keep in contact through face book, celebrities and even
head of states can reach out to the general people through the use of Twitter. IS has made
this possible.
5. Strategic initiatives:
IS helps in taking strategic initiatives for competition in the market. For example here in
Nepal, NCELL a private company had to face NTC, owned by the government, as a
competitor. It was very difficult to get a sim from NTC. People waited in line whole day
to get a sim card. NCELL provided sim cards in every small cyber shops. In addition
various facilities like Rs. 20 loan, mms, call recording, 4G etc. were provided by NCELL.
This increased its hold in the telecommunication market.

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Types of information systems:

A business firm has systems to support different groups or levels of management. These systems
include transaction processing systems, management information systems, decision-support
systems, and executive support systems.

Fig: Types of information systems

1. Transaction Processing System (TPS):

A transaction processing system (TPS) is a type of information system that collects, stores,
modifies, and retrieves the data transactions of an enterprise. In another words, a transaction
processing system is a computerized system that performs and records the daily routine
transactions necessary to conduct business, such as sales order entry, hotel reservations,
payroll, employee record keeping, and shipping.

The principal purpose of systems at this level is to answer routine questions and to track the flow
of transactions through the organization. How many parts are in inventory? What happened to Mr.
Sarbu’s payment? To answer these kinds of questions, information generally must be easily
available, current, and accurate.

At the operational level, tasks, resources, and goals are predefined and highly structured. The
decision to grant credit to a customer, for instance, is made by a lower-level supervisor according to
predefined criteria. All that must be determined is whether the customer meets the criteria.

2. Management Information System (MIS)

Management information systems as the study of information systems in business and
management. The term management information systems (MIS) also designates a specific
category of information systems serving middle management. MIS provide middle managers with
reports on the organization’s current performance. This information is used to monitor and control
the business and predict future performance. MIS summarize and report on the company’s basic
operations using data supplied by transaction processing systems. The basic transaction data
from TPS are compressed and usually presented in reports that are produced on a regular
schedule. Today, many of these reports are delivered online. It ensures the smooth running of
organization i.e., summary report, action report etc. MIS is designed to take relatively row data

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available through a TPS and convert them into summarized and aggregated form for the manager,
usually in a report format.

Decision Support System (DSS):

A decision support system (DSS) is an information system that aids a business in decision-making
activities that require judgment, determination, and a sequence of actions. The information system assists
the high-level management of an organization by analyzing huge volumes of unstructured data and
accumulating information that can help to solve problems and help in decision-making. A DSS is either
human-powered, automated, or a combination of both.

In another words, a Decision Support System can be seen as a knowledge based system, used by senior
managers, facilitates the creation of knowledge and allow its integration into the organization. These
systems are often used to analyze existing structured information and allow managers to project the
potential effects of their decisions into the future. Such systems are usually interactive and are used to
solve all structured problems. They offer access to databases, analytical tools, allow "what if" simulations,
and may support the exchange of information within the organization.

Executive Support System (ESS)/ Executive Information System (EIS):

An executive information system (EIS), also known as an executive support system (ESS), is a type
of management support system that facilitates and supports senior executive information and decision-
making needs. It provides easy access to internal and external information relevant
to organizational goals. It is commonly considered a specialized form of decision support system (DSS).
EIS emphasizes graphical displays and easy-to-use user interfaces. They offer strong reporting and drill-
down capabilities. In general, EIS are enterprise-wide DSS that help top-level executives analyze,
compare, and highlight trends in important variables so that they can monitor performance and identify
opportunities and problems.
Trends in Information Systems:

Introduction

Information systems have evolved at a rapid pace ever since their introduction in the 1950s. Today
devices you can hold in one hand are more powerful than the computers used to land a man on the moon
in 1969. The Internet has made the entire world accessible to you, allowing you to communicate and
collaborate like never before.

Global:

The first trend to note is the continuing expansion of globalization. The use of the Internet is growing all
over the world, and with it the use of digital devices. Penetration rates, the percent of the population using
the Internet, remains high in the developed world, but other continents are gaining.

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In addition to worldwide growth in Internet penetration, the number of mobile phones in use continues to
increase. At the end of 2017 the world population of people over the age 10 years (those old enough to
possibly have their own mobile phone) was about 5.7 billion with an estimated 4.77 billion mobile phone
users. This equates to over 80% of people in the world having a mobile phone.

World wide mobile phone users (Source: Statista)

Social:

Social media growth is another trend that continues at a firm growth rate. As of April 2018 there were
about 2.18 billion Facebook users, a 14% increase from April 2017.

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Facebook users world wide in June 2017 (Source: Internet World Stats)

In 2018, of the 2.2 billion users who regularly use Facebook, only half them spoke English and only 10%
were from the US.

Besides Facebook, other social media sites are also seeing tremendous growth. Over 83% of YouTube’s
users are outside the US, with the UK, India, Germany, Canada, France, South Korea, and Russia leading
the way. Interest gets over 57% of its users from outside the US, with over 9% residing in India. Twitter
now has over 330 million active users. Social media sites not based in the US are also growing. China’s
WeChat multipurpose messaging and social media app is the fifth most-visited site in the world.

Personal:

Ever since the advent of Web 2.0 and e-commerce, users of information systems have expected to be able
to modify their experiences to meet their personal tastes. From custom backgrounds on computer
desktops to unique ringtones on mobile phones, makers of digital devices provide the ability to
personalize how we use them. More recently, companies such as Netflix have begun assisting their users
with personalization by viewing suggestions.

The Challenge of Information Systems:

Although information technology is advancing at a blinding pace, there is nothing easy or mechanical
about building and using information systems. There are five major challenges confronting managers:

1. The information systems investment challenge: How can organizations obtain business value
from their information systems? It is obvious that one of the greatest challenges facing managers
today is ensuring that their companies do indeed obtain meaningful returns on the money they
spend on information systems. It’s one thing to use information technology to design, produce,
deliver, and maintain new products. It’s another thing to make money doing it. How can
organizations obtain a sizable payoff from their investment in information systems? How can
management ensure that information systems contribute to corporate value?

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Senior management can be expected to ask these questions: How can we evaluate our
information systems investments as we do other investments? Are we receiving the return on
investment from our systems that we should? Far too many firms still cannot answer these
questions. Their executives are likely to have trouble determining how much they actually spend
on technology or how to measure the returns on their technology investments. Most companies
lack a clear-cut decision-making process for deciding which technology investments to pursue
and for managing those investments.

2. The strategic business challenge: What complementary assets are needed to use information
technology effectively? Despite heavy information technology investments, many organizations
are not realizing significant business value from their systems, because they lack—or fail to
appreciate—the complementary assets required to make their technology assets work. The
power of computer hardware and software has grown much more rapidly than the ability of
organizations to apply and use this technology. To benefit fully from information technology,
realize genuine productivity, and become competitive and effective, many organizations actually
need to be redesigned. They will have to make fundamental changes in employee and
management behavior, develop new business models, retire obsolete work rules, and eliminate
the inefficiencies of outmoded business processes and organizational structures. New
technology alone will not produce meaningful business benefits.

3. The globalization challenge: How can firms understand the business and system requirements of
a global economic environment? The rapid growth in international trade and the emergence of a
global economy call for information systems that can support both producing and selling goods
in many different countries. In the past, each regional office of a multinational corporation
focused on solving its own unique information problems. Given language, cultural, and political
differences among countries, this focus frequently resulted in chaos and the failure of central
management controls. To develop integrated, multinational, information systems, businesses
must develop global hardware, software, and communications standards; create cross-cultural
accounting and reporting structures; and design transnational business processes.

4. The information technology infrastructure challenge: How can organizations develop an

information technology infrastructure that can support their goals when business conditions and
technologies are changing so rapidly? Many companies are saddled with expensive and
unwieldy information technology platforms that cannot adapt to innovation and change. Their
information systems are so complex and brittle that they act as constraints on business strategy
and execution. Meeting new business and technology challenges may require redesigning the
organization and building a new information technology (IT) infrastructure.

Creating the IT infrastructure for a digital firm is an especially formidable task. Most companies
are crippled by fragmented and incompatible computer hardware, software, telecommunications
networks, and information systems that prevent information from flowing freely between
different parts of the organization. Although Internet standards are solving some of these
connectivity problems, creating data and computing platforms that span the enterprise—and,
increasingly, link the enterprise to external business partners—is rarely as seamless as promised.

5. Ethics and security: The responsibility and control challenge: How can organizations ensure
that their information systems are used in an ethically and socially responsible manner? How
can we design information systems that people can control and understand? Although

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information systems have provided enormous benefits and efficiencies, they have also created
new ethical and social problems and challenges. Ethical and social issues raised by information
systems, such as threats to individual privacy and intellectual property rights, computer-related
health problems, computer crimes, and elimination of jobs. A major management challenge is to
make informed decisions that are sensitive to the negative consequences of information systems
as well to the positive ones.

Managers face an ongoing struggle to maintain security and control. Today, the threat of
unauthorized penetration or disruption of information systems has never been greater.
Information systems are so essential to business, government, and daily life that organizations
must take special steps to ensure their security, accuracy, and reliability. A firm invites disaster
if it uses systems that can be disrupted or accessed by outsiders, that do not work as intended, or
that do not deliver information in a form that people can correctly use. Information systems must
be designed so that they are secure, function as intended, and so that humans can control the
process. Managers will need to ask: Can we apply high-quality assurance standards to our
information systems, as well as to our products and services? Can we build systems with tight
security that are still easy to use? Can we design information systems that respect people’s rights
of privacy while still pursuing our organization’s goals? Should information systems monitor
employees? What do we do when an information system designed to increase efficiency and
productivity eliminates people’s jobs?

Definition of a System and Its Parts

system is an interrelated set of business procedures (or components) used within one business unit,
working together for some purpose. For example, a system in the payroll department keeps track of
checks, whereas an inventory system keeps track of supplies. The two systems are separate. A system
has nine characteristics. A detailed explanation of each characteristic follows, system exists within a
larger world, an environment. A boundary separates the system from its environment. The system takes
input from outside, processes it, and sends the resulting output back to its environment.

Elements of a System:

1. Components: An irreducible part or aggregation of parts that makes up a system; also called a
subsystem.

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2. Interrelated components: Dependence of one part of the system on one or more other system
parts.
3. Boundary: The line that marks the inside and outside of a system and that sets off the system
from its environment.
4. Purpose: The overall goal or function of a system.
5. Environment: Everything external to a system that interacts with the system.
6. Interfaces: Point of contact where a system meets its environment or where subsystems meet
each other.
7. Constraints: A limit to what a system can accomplish.
8. Input: Inputs are the information that enters into the system for processing.
9. Output: The main objective of a system is to get an output which is helpful for its user. Output is
the final outcome of processing.

Characteristics of a system:
1. Organization:
It implies structure and order. It is the arrangement of components that helps to achieve
objectives.
2. Interaction:
It refers to the manner in which each component functions with other components of the system.
3. Interdependence:
It means that parts of the organization or computer system depend on one another. They are
coordinated and linked together according to a plan. One subsystem depends on the output of
another subsystem for proper functioning.
4. Integration: It refers to the holism of systems. It is concerned with how a system is tied together.
5. Central Objective:
A system should have a central objective. Objectives may be real or stated. Although a stated
objective may be the real objective, it is not uncommon for an organization to state one objective
and operates to achieve another. The important point is that users must know the central objective
of a computer application early in the analysis for a successful design and conversion.
Resources of Information System:
There are 5 resources of information system which are given below:
1. Hardware:
The system components which can physically touch – the system unit (tower, desktop, laptop), internal
devices and peripheral devices (keyboards and monitors) – are called hardware and it is important to
remember that basic definition: The hardware are the parts of the computer that are tangible and can be
touched.
Peripheral devices are provided in many other ways, but think of them as hardware that surrounds the
system unit. These peripherals devices may be connected by wired or wireless technology to the
system unit. Generally peripherals devices communicate with the interior components of the system
unit via installed software. The software itself is intangible and can’t be touched physically.
2. Software:
We know that, the hardware needs to know what to do, and that is the role of software. The software

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may be divided into two types: first system software and second application software. Primary piece of
system software is the operating system, such as Windows OS, which manages the hardware’s
operation. Application software is perform for specific tasks, such as handling a spreadsheet, creating
a document, or designing a Web page.
3. People:
The human element is the most important component of information system and the people that are
needed to run the system and the procedures they follow so that the knowledge in the huge databases
and data warehouses can be turned into learning that can interpret what has happened in the past and
guide future action.
4. Data:
Data is one of the most important component which is generally store in form of information in a
database system and a database is a place where data is collected and from which it can be retrieved by
querying it using one or more specific criteria. All types of data store in warehouse without knowing
whatever form that an organization needs. The databases and data warehouses have assumed even
greater importance in information systems with the emergence of “big data, ” a term for the truly
massive amounts of data that can be collected and analyzed.
5. Network:
The network is defined as a system in which more than the system is connected through a transmission
media. It provides an interface to receive a piece of information or send an information. It is also one
of the best resources in the information system.

Information System Activities

The major activities of an information system are;

1. Input of Data Resource:

Data about business transactions and other events must be captured and prepared for processing by the
input activity. Input typically takes the form of data entry activities such as recording and editing. End
uses typically record data about transactions on some type of physical medium such as paper form, or
enter it directly into a computer system. This usually includes a variety of editing activities to ensure that
they have recorded data correctly. Once entered, data may be transferred onto a machine-readable
medium such as a magnetic disk until needed for processing.

For example, data about sales transactions can be recorded on source documents such as paper sales order
forms. (A source document is the original formal record of a transaction). Alternately, salespersons can
capture sales data using computer keyboards or optical scanning devices; they are visually prompted to
enter data correctly by video displays. This provides them with a more convenient and efficient user
interface, that is, methods of end user input and output with a computer system. Methods such as optical
scanning and displays of menus, prompts, and fill-in-the-blanks formats make it easier for end users to
enter data correctly into an information system.

2. Processing of Data into Information:

Data is typically subjected to processing activities such as calculating, comparing, sorting, classifying,
and summarizing. These activities organize, analyze and manipulate data, thus converting them into
information for end users. The quality of any data stored in an information system must also be
maintained by a continual process of correcting and updating activities.

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For example, data received about a purchase can be (1) added to a running total of sales results, (2)
classified into product categories (such as food and nonfood items), (2) summarized to provide a sales
manager with information about various product categories, (3) used to update sales records etc.

3. Output of Information Products:

Information in various forms is transmitted to end-users and made available to them in the output activity.
The goal of information systems is the production of appropriate information products for end users.
Common information products messages, reports, forms, and graphic images, which may be provided by
video displays, audio responses, paper products, and multimedia. For example, a sales manager may view
a video display to check on the performance of a salesperson, accept a computer-produced voice message
by telephone, and receive a printout of monthly sales results.

4. Storage of Data Resource:

Storage is a basic system component of information systems. Storage is the information system activity in
which data and information are retained in an organized manner for later use. For example, just as written
text material is organized into words, sentences, paragraphs, and documents, stored data is commonly
organized into fields, records, files, and database. This facilitates its later use in processing or its retrieval
as output when needed by users of a system.

5. Control of System Performance

An important information system activity is the control of its performance. An information system should
produce feedback about its input, processing, output, and the system is meeting established performance
standards. Then appropriate system activities must be adjusted so that proper information products are
produced for end users.

For example, a manager may discover that subtotals of sales amounts in a sales report do not add up to
total sales. This might mean that data entry or processing procedures need to be corrected. Then changes
would have to be made to ensure that all sales transactions would be properly captured and processed by a
sales information system.

Strategic-IT:
Strategic-IT is a highly specialized Software technology firm, focused on helping complex global
organizations simplify and optimize the way their organizations work by adopting a new approach to IT
strategy – "One that combines Speed, Openness, Flexibility, and Focused Forward Thought".
We focus on Strategic, Creative and Multi-Disciplinary soultions to meet specific needs and Objectives -
On time Every Time..
 Our IT Strategy makes sure that what you get planned, gets done.
 We make you to Focus your resources on what you do best, and partner with us for rest.

Competitive Strategy Concept:

Competitive Strategy is defined as the long term plan of a particular company in order to gain competitive
advantage over its competitors in the industry. It is aimed at creating defensive position in an industry and

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generating a superior ROI (Return on Investment). Such type of strategies plays a very important role
when industry is very competitive and consumers are provided with almost similar products. One can take
example of mobile phone market.
Before devising a competitive strategy, one needs to evaluate all strengths, weaknesses, opportunities,
threats in the industry and then go ahead which would give one a competitive advantage. Understanding
competition, studying customer needs, evaluating their strengths & weakness etc. are all an important
aspect of marketing strategy. Companies can study & evaluate on the basis of their market share, SWOT
analysis etc., which would eventually help them drive business & sales revenue.

Types of competitive strategies:

According to Michael Porter, competitive strategy is devised into 4 types:
1. Cost Leadership:
Here, the objective of the firm is to become the lowest cost producer in the industry and is achieved by
producing in large scale which enables the firm to attain economies of scale. Producing and selling in
large scale, good bargaining power, high technology implementation are some of factors necessary to
achieve cost leadership. e.g Micromax phones

2. Differentiation leadership:
Under this strategy, firm maintains unique features of its products in the market thus creating a
differentiating factor. With this differentiation leadership, firms target to achieve market leadership. And
firms charge a premium price for the products (due to high value added features). Superior brand and
quality, major distribution channels, consistent promotional support etc. are the attributes of such
products. E.g. BMW, Apple
3. Cost focus:
Under this strategy, firm concentrates on specific market segments and keeps its products low priced in
those segments. Such strategy helps firm to satisfy sufficient consumers and gain popularity. E.g. Sonata
watches

4. Differentiation focus
Under this strategy, firm aims to differentiate itself from one or two competitors, again in specific
segments only. This type of differentiation is made to meet demands of border customers who refrain
from purchasing competitors’ products only due to missing of small features. It is a clear niche marketing
strategy. E.g. Titan watches
Without following anyone of above mentioned competitive strategies, it becomes very difficult for firms
to sustain in competitive industry.

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Business Process Reengineering (BPR)

Business Process Reengineering (BPR) involves the radical redesign of core business processes to
achieve dramatic improvements in productivity, cycle times, and quality. In Business Process Re-
engineering, companies start with a blank sheet of paper and rethink existing processes to deliver more
value to the customer. They typically adopt a new value system that places increased emphasis on
customer needs. Companies reduce organizational layers and eliminate unproductive activities in two key
areas. First, they redesign functional organizations into cross-functional teams. Second, they use
technology to improve data dissemination and decision-making.

Business Process Reengineering is a dramatic change initiative that contains following major steps.
Managers should:

1. Refocus company values on customer needs

2. Redesign core processes, often using information technology to enable improvements
3. Rethink basic organizational and people issues
4. Improve business processes across the organization
Companies use Business Process re-engineering to improve performance substantially on key processes
that impact customers. Business Process Reengineering can:

 Reduce costs and cycle time: Business Process Reengineering reduces costs and cycle times by
eliminating unproductive activities and the employees who perform them. Reorganization by
teams decreases the need for management layers, accelerates information flows, and eliminates
the errors.
 Improve quality: Business Process re-engineering improves quality by reducing the
fragmentation of work and establishing clear ownership of processes. Workers gain responsibility
for their output and can measure their performance based on prompt feedback.

Agile Company:
An agile company is a business that has the ability to quickly adapt to market changes. There are some of
the key identifying characteristics of an agile company. The must be fast-moving and flexible, have rapid
response to unexpected obstacles, lead change, be in touch with customers, and have continuous
competitive advantage, and flat organizational structure for quick communication.

Becoming Agile:
The first step in transforming into an agile company is to hire or train employees who can lead
that change for the organization. The culture of the company has to be reflected in the leaders of the
organization in order to reduce the resistance to a new way of thinking. The entire company should be
educated on the agile framework to eliminate misconceptions.
The second major change requires collaboration. Teams cannot operate in silos. There must be
cross-communication that builds trust. This allows decisions to be made quickly without creating
bottlenecks in the process. Recognition should be based on teamwork, rather than individual performance
wherever possible.
The third key step is to make the process very quick and easy to learn. If the new process is time-
consuming or has too many regulations and rules, it will fall apart before it even gets started. Employees
need to believe this new process will remove roadblocks and increase interactions. A solid transformation
will lessen the opportunity for failure.

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virtual company:
An organization that uses computer and telecommunications technologies to extend its capabilities by
working routinely with employees or contractors located throughout the country or the world. Using
email, faxes, instant messaging, data and videoconferencing, it implies a high degree of telecommuting as
well as using remote facilities. The most extreme type of virtual company is one with only "virtual
employees" and no central office. Everyone works from home, including top management.

knowledge Management:
Knowledge management is the process of identifying, gathering, storing, evaluating and sharing all of the
valuable information organizations create in their day-to-day operations. It involves capturing answers to
frequently asked questions and documenting them in an easy to understand format, like step by step
written articles, videos or images.
Knowledge management is like the catalogue system at the library which helps you find exactly the right
shelf and the right book to answer your question (and even keeps a record of when it was last checked
out!).
Managing knowledge effectively means that accurate answers to common questions are easily accessible
to both customer support agents and customers. Your team can act consistently with confidence, armed
with answers from colleagues who have been there before. There’s no need to reinvent the wheel with
every customer question.
Why use a knowledge management system?
A knowledge management system helps you stay well-organized and up-to-date when it comes to your
organization’s documentation. Whether you’re a SaaS company supporting business customers, a
consumer product shipping out retail items or a helpdesk manager dealing with internal customers, a
knowledge management portal will help you effectively deliver information to the people who need it.
Help customers find their own answers:
Your customers don’t always want to talk to a human to get their questions resolved. If they can search
online and find the answers they need, they don’t have to wait in a phone queue.
Self-service, or customers helping themselves through documentation, is the most cost effective way of
supporting your customers. A knowledge management software provides 24/7 support to customers, so
they can find what they need and get back to their day, quickly.
Offer answers to frequently asked questions:
Providing answers to the most burning questions your potential customers have can help convert website
visitors into buyers. A KMS identifies the most searched terms and visited articles so you don’t have to
guess what your customers want to know - they will tell you!
Keep information up to date and easy to find:
A knowledge management system helps you identify out-of-date articles and update them with new
information. This provides a big advantage over a file folder of documents. Where folders can become
unwieldy and messy, a KMS will keep your valuable information organized. With clear organization and
effective search capabilities, anyone (internal or external) can locate exactly what they need, when they
need it.

By: S. K. Yadav Page 15