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When concept of MIS was first introduced, many proponents envisioned a single, highly integrated system that would bring together processing for all organizational functions. The MIS concept is now a Federation of Subsystems, developed and implemented as needed, but confirming to the overall plan, standards and procedures for the MIS. Definition of MIS The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number of ways. It is also known as the Information System, the Information and Decision System, the Computer- based information System. The MIS has more than one definition, some of which are give below. 1. The MIS is defined as a system which provides information support for decision making in the organization. 2. The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision making function in the organization. 3. The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization. 4. The MIS is defined as a Computer-based Information System. Thought there are a number of definitions, all of them converge on one single point, i.e., the MIS is a system to support the decision making function in the organization. The difference lies in defining the elements of the MIS. However, in todays world MIS a computerized business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization. In any organization, small or big, a major portion of the time goes in data collection, processing, documenting it to the people. Hence, a major portion of the overheads goes into this kind of unproductive work in the organization. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. Hence, the information is people-oriented and it varies with the nature of the people in the organization. The difficulty in handling this multiple requirement of the people is due to a couple of reasons. The information is a processed product to fulfill an imprecise need of the people. It takes time to search the data and may require a difficult processing path. It has a time value and unless processed on time and communicated, it has no value. The scope and the quantum of information is individual-dependent and it is difficult to conceive the information as a well-defined product for the entire organization. Since the people are instrumental in any business transaction, a human error is possible in conducting the same. Since a human error is difficult to control, the difficulty arises in ensuring a hundred per cent quality assurance of information in terms of completeness, accuracy, validity, timeliness and meeting the decision making needs.

BBA-V/UNIT-I/MIS In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:

search and retrieval.

The management information system uses computers and communication technology to deal with these points of supreme importance.

BBA-V/UNIT-I/MIS Purpose of MIS The purpose of MIS is to help the organization in the following functional business areas: Accounting : In accounting functions, the MIS is used to record business transaction, produce periodic financial statements and create reports required by user. Finance : MIS helps in organizing budgets, manage the flow of cash, analyze investments and make decisions that could reduce interest payments and increase ventures. Marketing : MIS helps to analyze demand for various products in different regions and population groups. Human Resources : Help with record keeping and employee evaluation.

The MIS also helps in the following business sector : Manufacturing : Allocate resources such as personnel, raw material and time Control inventory, process customer orders, prepare production schedules, perform quality assurance, and prepare shipping documents. Service : Information systems are often the backbone of service organizations. Retail : Some retail stores (eg. : Wal-Mart) are now linked to communication networks by satellite. Management can determine which items move quickly and which do not. New Business : Information systems have made new products and services possible, such as credit report and shipment tracking. Government : Tax authorities, national insurance and welfare agencies, defence departments, economic organizations and immigration authorities.

Objectives of MIS MIS objectives are derived from the companys objectives. These are clearly stated in writing. If this is not the case, these objectives are available from the key executives in the business, which is the starting point. Each company objective should be reflected in at least one MIS objective. The MIS objective calls, for supporting contribution to meet companys goals. Supposes the company wants to increase its market segment A from 10% to 14% per year. This requires answers to the following questions1. How the market is currently allocated? 2. What products did each competitor offer to get and hold its share of the market? 3. What are pros and cons of these products? 4. How much advertising is spent on each product? 5. To what set of customer, does each of the product appeals? 6. What is an appropriate action to be taken and in which stage of the product life cycle? And so on 3

BBA-V/UNIT-I/MIS The marketing group may have the answers to some of the questions but not for all. The ones that are not answered are opportunities for the MIS department to make a contribution. The MIS department will also set itself a long range of objectives to create an MIS that answers as many of these types of questions as possible for use with the next market share problem. Importance of MIS : 1. MIS is always management oriented and keeps in view every level of management and gets the desired information. 2. Integrated - refers to how different components (sub systems) are actually tied up together. eg: different departments of organization linked together. 3. Useful for planning - as every organization makes log-term and short-term plans with the help of information like sales & production, capital investments, stocks etc management can easily plan. 4. Effective MIS helps the management to know deviations of actual performance from pre-set targets and control things. 5. Its important for increasing efficiency. 6. MIS provides updated results of various departments to management. 7. MIS is highly computerized so it provides accurate results. 8. MIS adds to the intelligence, alertness, awareness of managers by providing them information in the form of progress and review reports of an ongoing activity. 9. Helps managers in decision- making. Role of MIS The role of the MIS in an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control, and helps them further in decision making at the operations 4

BBA-V/UNIT-I/MIS level to correct an out of control situation. The MIS helps the middle management in short them planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vital role in the management, administration and operations of an organization. MIS Growth and Development With the advent of digital firms, the role of information systems in modern organizations has become vital. The way the managers decide, plan, and manage is directly influenced by the information systems. Moreover, the information systems help to determine what products to be produced, and when and how the products are to be produced. Thus, the responsibility of building and managing the information systems cannot be left only up to the technical decisionmakers; rather it also requires a major involvement of the organization. In todays systems, the interdependence between the firms information systems and its business capabilities has been growing continuously. Any change in business strategy, processes or rules requires a change in the information systems components, including hardware, software, database, and telecommunications. Similarly, a change in hardware, software, or telecommunication also affects the business rules, processes, etc. The Widening Scope of Information Systems With time, the role of computer-based information systems in the organizations has broadened. Figure describes the roles of information systems in business and management over the years. 1990-2000 Electronic Business and Commerce

1980-90 Strategic and End User Support

1970-80 Decision Support

1950-60 Data Processing

1960-70 Management Reporting

BBA-V/UNIT-I/MIS During the 1950s and the 1960s, the role of information systems in organizations was quite simple. They were used only for data processing operations, including recordkeeping, transaction processing, traditional accounting applications, and other electronic data processing applications. Then, during the 1960s and the 1970s, the need for studying management information systems (MIS) developed the focus on the use of information systems for developing business applications. These applications produced management reports to provide managers the information required for making decision. During the 1970s and the 1980s, the concept of decision support systems (DSS) was introduced because the predefined management reports of MIS were not able to meet some of the decisionmaking needs of the management in an adequate manner. The new role of information systems was to provide specific and interactive support to the managers in their decision making process. During the 1980s and the 1990s, a wide variety of information systems, including end-user computing systems, executive support systems (ESS), and expert systems (ES), were developed, and as a result several new roles for information systems appeared. The end-user computing systems provided direct computing support for end-user productivity and workgroup collaboration. The users were no longer required to wait for the support from the corporate information services departments. The executive support systems (ESS) were developed for the top management because most of the management executives were not directly using the reports of MIS or the analytical models of DSS. ESS was created to provide critical information required by the top management at the time of their need and also in their preferred formats. In the experts systems (ES), the techniques of artificial intelligence were applied to make the systems act intelligently on behalf of their owners, thereby eliminating the need of human invention. Today, expert systems can provided the end-users with knowledge-based expert advice in some specific fields. In the late 1980s, the concept of strategic role for information systems was introduced and it continued through the 1990s. The strategic information systems (SIS) use information technology in products, services, or business processes of an organization, and thus help them to gain a competitive advantage. From the mid to the late 1990s, the enterprise resource planning (ERP) systems emerged. An ERP system is an organization-specific form of strategic information systems that integrates almost all business functions, such as planning, sales and marketing, inventory control, manufacturing, human resources, etc. During the 1990s and the 2000s, the rapid development of the internet, intranets, and extranets altered the information systems capabilities in business in a dramatic manner. Today, internetbased e-business and e-commerce systems are becoming very popular and are being used in most of the business organizations. MIS Concepts & Design MIS comprises of three elements viz., management, information and system. The concept of MIS is better understood if each element of the term MIS is defined separately.

BBA-V/UNIT-I/MIS Management: A manager may be required to perform following activities in an organisation: (i) Determination of organisational objectives and developing plans to achieve them. (ii) Securing and organising human beings and physical resources so as to achieve the laid down objectives. (iii) Exercising adequate controls over the functions performed at the lower level. (iv) Monitoring the results to ensure that accomplishments are proceeding according to plans. Thus, management comprises of the processes or activities that describe what managers do while working in their organisation. They in fact plan, organise, initiate, and control operations. In other words, management refers to a set of functions and processes designed to initiate and coordinate group efforts in an organised setting directed towards promotion of certain interests, preserving certain values and pursuing certain goals. It involves mobilisation, combination, allocation and utilisation of physical, human and other needed resources in a judicious manner by employing appropriate skills, approaches and techniques. Information: Information is data that have been organised into a meaningful and useful context. It has been defined by Davis and Olson - Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or progressive decision. For example, data regarding sales by various salesmen can be merged to provide information regarding total sales through sales personnel. This information is of vital importance to a marketing manager who is trying to plan for future sales. Information is the substance on which business decision are based. Therefore, the quality of information determines the quality of action or decision. The management plays the part of converting the information into action through the familiar process of decision-making. Information has come to occupy a very important position in the survival of a business. System: System may be defined as a composite entity consisting of a number of elements which are interdependent and interacting, operating together for the accomplishment of an objective. One can find many examples of a system. Human body is a system, consisting of various parts such as head, heart, hands, legs and so on. The various body parts are related by means of connecting networks of blood vessels and nerves. This system has a main goal which we may call living. Thus, a system can be described by specifying its parts, the way in which they are related, and the goals which they are expected to achieve. A business is also a system where economic resources such as people, money, material, machines, etc. are transformed by various organization processes (such as production, marketing, finance, etc.) into goods and services. Thus, MIS can be defined as a network of information that supports management decision making. The role of MIS is to recognise information as a resource and then use it for effective and timely achievement of organisational objectives.

BBA-V/UNIT-I/MIS Characteristics of MIS Systems Approach : The information system follows a systems approach. Systems approach means taking a comprehensive view or a complete look at the interlocking sub-systems that operate within an organization. Management Oriented : Management oriented characteristic of MIS implies that the management actively directs the system development efforts. For planning of MIS, top-down approach should be followed. Top down approach suggests that the system development starts from the determination of managements needs and overall business objective. To ensure that the implementation of systems polices meet the specification of the system, continued review and participation of the manager is necessary. Need Based : MIS design should be as per the information needs of managers at different levels. Exception Based : MIS should be developed on the exception based also, which means that in an abnormal situation, there should be immediate reporting about the exceptional situation to the decision makers at the required level. Future Oriented : MIS should not merely provide past of historical information; rather it should provide information, on the basis of future projections on the actions to be initiated. Integrated : Integration is significant because of its ability to produce more meaningful information. Integration means taking a comprehensive view or looking at the complete picture of the interlocking subsystems that operate within the company. Common Data Flow : Common data flow includes avoiding duplication, combining similar functions and simplifying operations wherever possible. The development of common data flow is an economically sound and logical concept, but it must be viewed from a practical angle. Long Term Planning : MIS is developed over relatively long periods. A heavy element of planning should be involved. Sub System Concept : The MIS should be viewed as a single entity, but it must be broken down into digestible sub-systems which are more meaningful. Central database : In the MIS there should be common data base for whole system. KEY SYSTEM APPLICATIONS IN THE ORGANISATION As organization consists of different levels operational, knowledge, management and strategic with each level having its own interests and specialties. The managers at each level need different type of information that a single system cannot provide. Therefore, different kinds of information system are used in an organization to serve the different levels. In addition to levels, an organization is divided into various functional areas the in-house services that support an organization includes sales and marketing, manufacturing and production, finance and accounting, and human resources. The information systems at each organizational level are also designed to support the functional areas of the business. Different kinds of information systems Depending on the organizational level at which the information system serve, they are classified into four categories, namely operational-level, knowledge-level, management-level, and strategic-level systems. Fig shows the different kinds of information systems used in an organization as well as the people who use them. 8


Fig : Different kinds of information systems Operational-level systems Operational-level systems are designed to serve the managers at the operational level. These systems keep track of day-to-day activities taking place in the organization and are responsible for answering routine questions like the amount that has been paid to a certain supplier, the number of units a customer has ordered for a particular item and the number of units of particular items that is available for sale, etc. The main function of the operational-level systems is to track and record the transactions such as sales, purchases, cash deposits, payments, etc. Knowledge-level systems Knowledge-level systems support application of knowledge in organizations. These systems integrate new knowledge acquired through research into the existing system, and support dissemination of this business knowledge to managers other employees. Some example of knowledge level systems are computer aided design (CAD), computer-aided engineering (CAE), computer-aided software engineering (CASE), and computer-aided manufacturing (CAM) software. These systems provide feedback quickly to the knowledge workers resulting in better performance of the organization. Management-level systems Management-level systems help middle managers to monitor, control, and administer the organization. These systems provide periodic reports like monthly, quarterly and yearly report of sale, purchase, stock, etc. some of the management-level systems can also be used for what-if analysis in order to answer some less structured questions like the quantity of an item that should

BBA-V/UNIT-I/MIS be manufactured if a particular amount of sale in future is expected. Answers to these types of questions often require information from inside as well as outside the organization. Strategic-level systems Strategic-level systems support senior managers in taking decision on strategic issues that affect the organization over a long period of time. Some example of strategic decisions include launching new products, forecasting the market trends for a specific line of products in the next five years, collaborating with other companies, knowing the human resource requirement in the long term, etc. The strategic level systems harmonize any changes in the external environment with the available organizational abilities. These systems are used by the highest ranking official of an organization, such as vice president, CEO, board of directors, etc.

Six major types of systems A typical organization has six types of information systems with each supporting a specific organizational level. These systems include transaction processing systems (TPS) at the operational level, office automation systems (OAS) and knowledge work systems (KWS) at the knowledge level, management information systems (MIS) and decision support systems (DSS) at the management level, and the executive support systems (ESS) at the strategic level. Transaction Processing Systems Every firm needs to process transaction refers to any event or activity that affects the organizations. A transaction refers to any event or activity that affects the organization. Depending on the organizations business, transactions may differ from one organization to another. In a manufacturing unit, for example, transactions include other entry, receipts of goods, shipping, etc., while in a bank, transactions include deposits and withdrawals, cashing of cheques, etc. However, some transactions, including placing orders, billing Customers, hiring employees, employee record keeping, etc., are common to all organisations. To support the processing of business transactions, the transaction processing systems (TPS) are used in the organizations. A transactional processing system (TPS) is the most fundamental computer based information system designed to capture and executive the transactions that occur in an organisation on a routine basis and are needed to run the organisations business. Some example of transaction processing systems are order processing, payroll, employee record keeping, accounts receivable, accounts payable and material movement control systems. A TPS executes the following the following set of procedures to help in the operations of an organization as well as to improve the executive of routine activities in the business organization. Calculation: To perform calculations on data Classification: To categorize the data and represent only data of interest to different managers. Storage and retrieval: To store the data generated through different transactional and the retrieval of stored data. 10

BBA-V/UNIT-I/MIS Summarization: To summarize the data in the form of form of reports and listing/printing them for use by employees and/or managers. Sorting: To arrange the transaction records in the desired order.

Transaction processing systems are generally used in highly structured and repetitive kind of situations where the tasks to be executed and the standards to be considered are predefined. This enables the operational managers to take decisions quickly and precisely. The decisions, for example, to give credit to a customer can be taken if he fulfils some predefined set of criteria. Office Automation Systems An office automation system (OAS) is a collection of communication technology, computers and persons to perform official tasks. It executives office transactions and supports official activities at every organizational level. These activities can be divided into clerical and managerial activities. Clerical activities performed with the help of OAS include preparing written communication, typesetting, printing, mailing, schedule meetings, calendar keeping, etc. under managerial activities, OAS helps in conferencing, creating reports and messages, and controlling performance of organization. Many applications like word processing, electronic filing, and email are integrated in OAS. Word Processing Word processing is used for the preparation of documents like letters, reports, memos, or any type of printable material by electronic means. The text is entered by keyboard and displayed on the computers display unit. This text can be edited, stored, and reproduced with the help of commands present in the word processor. Word processors have facilities for spell checking, gramming checking, counting (character, lines, pages, etc), automotive page numbering, index creation, header and footer, etc. E-mail E mail or electronic mail facilities the transfer of message or documents with help of computer and communication lines. This helps in speedy delivery of mails and also reduces time and cost of sending a paper mail. E mail supports not only the transfer of text messages but it also has options for sending images, audio, video, and many other types of data. Voice mail Voice mail, an important call service, allows recording and storing of telephone messages into the computers memory. The intended person can retrieve these messages any time. Knowledge Work Systems A knowledge work system (KWS) is a specialized system built to promote the creation of knowledge and to make sure that knowledge and technical skills are properly integrated into the business. It helps the knowledge works in creating and propagating new information and 11

BBA-V/UNIT-I/MIS knowledge by providing them the graphics, analytical, communications, and document management tools. The knowledge workers also need to search for knowledge outside the organization. Thus, KWS must give easy access to external database. In addition, knowledge work systems should have user-friendly interface to help users to get the required information quickly and easily. Some example of knowledge work systems are computer aided design (CAD) systems, virtual reality systems, and financial workstations. Computer-aided design (CAD) systems: These systems are used for automating the creation and revision of designs using computers and graphics software. The CAD software has the capability to provide design specifications for tooling and manufacturing process. This saves much time and money while making a manufacturing process. Virtual reality systems: These systems have more capabilities than CAD systems for visualization, rendering and simulation. They make use of interactive graphics software to build computer-generated simulations which almost look like real. They can be used in educational, scientific and business work. Financial workstations: They are used to combine a wide range of data from internal as well as external sources. This data includes contact management data, market data and research reports. Financial workstations help in analysing trading situations and large amount of financial data within no time. It is used for portfolio management. Management Information Systems Management information systems are especially developed to support planning, controlling, and decision-making functions of middle managers. A management information system (MIS) extracts transaction dada from underlying TPSs, compiles them, and produces information products in the form of report, displays or response. These information products provide information that conforms to decision-making needs of managers and supervisors. MISs use simple routines like summaries and comparisons which enable manager to take decision for which the procedure of reaching at a solution has been specified in advance. Generally, the format of reports produces by MIS is prespecified. A typical MIS report is a summary reportt, such as a report on the quarterly sales made by each sales representative of the organization. Another type of MIS report is an; for example, exception report that specified the exception condition the sales made by some representative is far below than expected. Usually, MISs are used to produce report on monthly, quarterly, or yearly basis. However, if manager wants to view the saily or hourly dada, MIS enables them to do so. In addition, they provide manager online access to the current performance as well as past records of the organization. Decision Support Systems A decision support system DSS is an interactive computer-based information system that, like MIS, also serves at the management level of an organization. however, in contract to MIS (that process dada), it processes information to support the decion-making process of manager. It 12

BBA-V/UNIT-I/MIS provide middle manager with the information that enables them to make intelligent decision. A DSS in bank, for example, can enables a manager to analyse the changing trends in deposits and loans in order to ascertain the yearly targets. DSSs are designed for every manager to execute a specific managerial task or problem. Generally, they help managers to make semi-structured decision, the solution to which can be arrived at logically. However, sometimes, they can also help in taking complex decisions. To support such decision, they use information generated by a OASs and TPSs. DSSs have more analytical power as compared to other information systems. They employ a wide variety of decision models to analyse data or summarise vast amount of data a form (usually form of tables or chart) that makes the comparison and analysis of data easier for managers. They provide an interactive environment so that the users could work with them directly, add or charge data as per their requirement, and new questions. Executive Support Systems An executive support system (ESS) an extension of MIS is a computer- based information system that help in decision making at the top of an organization. The decision taken with the help of ESS and non routine decision that affect the entire organization and, thus, require judgment and insight. As compared to DSSs, ESSs offer more general computing capabilities, better telecommunication and efficient display options. They use the advanced graphics software to display the critical information in the form of charts or graphs that help senior executives to solve a wide range of problems. To make effective decision, they use summarized internal data from MIS and DSS as well as data from external sources about events like new tax laws, new companies, etc. They filter, compress, and track dada of high importance and make it available to the strategic-level managers. ESSs help to monitor performance, track activities of competitors, identify opportunities, and forecast trend. They also assist senior manager in answering the following question: What business should we do? How are our competitors doing the business? Which unit can be sold and which new unit are to be bought?

Relationships Of Systems To One Another As various system serve different level in the organization, they are interrelated to each other. TPS is the underlying system which produces information for MIS and DSS, which in turn supplies information to ESS. So ESS is the topmost recipient of data from the lower system (TPS, MIS, DSS) may exchange data between themselves. KWS and OAS take their input from TPS, and also provide dada to MIS.



Fig : Relationships Of Systems To One Another

Recent Development in the field of MIS Customer Relationship Management Customers have always been valuable for businesses, but today their importance is very much appreciated for the profitability of the enterprise. This is largely because of rapid globalization and growing competition. Customers now have a variety of options available with them for purchasing a particular product. They can easily make comparisons, shop or even switch companies in case they are not satisfied with the service. As a result, today, the top most strategy of a business is to become a customer-focused business in order to provide maximum satisfaction to the customers thereby establishing a long term relationship with them. That is why many companies are turning to customer relationship management (CRM) that focuses on the ways of identifying and retaining the profitable customers. Customer relationship management (CRM) defined as a business and technology discipline that manages the ways an organization deals with its customers, in order to enhance the revenue, profitability, customer satisfaction and retention. It analyze the different aspects of customer relationships, including customer services, sales and marketing, to improve their customer focus. It uses information technology to create a cross-functional information system called CRM information system that integrates and automates a firms many customer related business processes in sales, marketing, and customer services to provide quick, convenient and consistent service to its customers, Earlier, the business process of different business function was isolated from one another and, thus, various customer information was fragmented in different systems. There was no provision for consolidating all the customer-related information in order to provide a unified view of customer to the organization and its employees who need to interact with the customers. However, this problem was resolved with the help of CRM systems. The CRM systems comprises a set of tools that capture customer information from all customer touch points (methods of interacting with customers) like e-mail, telephone, fax, retail stores, companys website, etc. this consolidated information is stored in a common customer database and made available across the organization via the internet, intranet, or other network links. 14

BBA-V/UNIT-I/MIS Types of CRM system Nowadays, three major types of CRM systems, namely operational CRM, analytical CRM, and collaborative CRM are being used in many organizations. Operational CRM: It provides support to front-office business processes that involve direct interaction with customers through any communication channel, such as phone, fax, e-mail, etc. the details of every interactions with customers, including their requirements, preferences, topics of discussions, etc., are stored in the customers contact history and can be retrieved by the organizations staff whenever required. Examples- sales force automation (SFA), customer service and support (SFA), enterprise marketing automation (EMA), etc. Analytical CRM: It enables to analyse customer data generated by operational CRM applications, understand the customers behaviour and derive their true value to the organization. This helps to approach the customers with pertinent information and proposals that satisfy their needs. The analytical CRM applications use analytical marketing tools like data mining to extract meaningful information like the buying patterns of the customers, target market, profitable and unprofitable customers, etc., that helps to improve performance of the business. Collaborative CRM: it allows easier collaboration with customers, suppliers, and business partners and, thus, enhances sales and customer services across all marketing channels. The major goal of collaborative CRM application is to improve the quality of services provided to the customers, thereby increasing the customers loyalty. Examples- partner relationship management (PRM), customer self service and feedback. Benefits of CRM

1. Help organizations to determine their most profitable customers and establish a long-

term relationship with them. This can increase the firms revenue. 2. Result in reduced in churn rate (the number of customers who stop buying or using products of a company) by enabling the firms to customize and personalize the products according to user needs, preferences, buying habits, etc. 3. Enables provision of better customer service and support across all the touch points, whichever the customer uses. Supply ChainMmanagement The concept of supply chain management is not new but it has become increasingly important for the last few years. With the shifting of business focus from manufacturing to customer value, companies are not much concerned about manufacturing cost or producing high quality products; at the time the consumer need, in the appropriate quantity, and at the lowest possible cost. Supply chain management (SCM) is a business and technology discipline that refers to the ways of coordinating the activities involved in purchasing, designing, building, and selling a product. It uses information technology to create a cross functional inter-enterprise (involving more than one organization) system called SCM information system. These systems integrate the business


BBA-V/UNIT-I/MIS processes of suppliers, purchasing firms, distributors and custom logistics in order to improve the efficiency and effectiveness of manufacturing and distribution. The Supply Chain Management In simplest terms, SCM is all about managing the supply chaina network of organizations and the business processes for acquiring the raw materials, transforming them in to finished goods, and distributing the products to the customers. The supply chain links many business entities, such as supplier, manufacturer, transporter, distributor, retailer and the customers themselves. The supply chain is driven by three main inputs, namely- information, materials, and funds which flow among the supply chain members. The ultimate goal o f SCM systems is to efficiently manage the flow of information, materials, and funds across the entire supply chain, thereby, reducing the cost of supply chain while bringing a firms products from concept to market. Types of SCM systems Supply chain planning systems: These systems provide information that help businesses planning of their supply chain. Some of the important supply chain planning functions are as follows: Forecasting demand for specific products and preparing sourcing and manufacturing plan for those products. Estimating the quantity of the product to be manufactured in a given time period. Deciding the location where the finished goods are be stored. Identifying the transportation mode to be used for delivering the products. Setting the inventory levels for raw materials, intermediate products and finished goods. Supply chain execution systems: these systems provide information that help businesses in the execution of their supply chain steps. Some of the major supply chain execution systems functions are as follows: Managing the flow of products from the manufacturers to distributors to retailers and finally to customers in order to ensure accurate delivery of products. Providing information about the status of orders being processed so that the vendors could provide the exact delivery dates to customers. Tracking the shipment and accounting for the products that have been returned or are to be prepared and serviced. Benefits of SCM Improve the customer service by delivering them the right product at the right time and at the right location, which in turn increases the organizations revenue. Enables the company to bring the products to the market at a quicker rate. Thus, the companies get their payment sooner than those who lack an efficient supply chain. Lower the total supply chain cost, including procuring materials cost, transportation cost, inventory carrying cost, etc. the reduction in supply chain cost helps to increase the firms profitability.


BBA-V/UNIT-I/MIS Enterprises Resource Planning Earlier, in large organizations, different information systems were used to serve different business function like sales, marketing, manufacturing, etc., separately. The business processes in each business function were disparate and not capable of sharing information with each other. It was difficult for the managers to assemble the data fragmented into separate systems in order to present an overall picture of the organizations operation and take firm -wide decisions. At the time a customer places an order, for example, the sales personnel might not be able to tell him whether the desired items are in inventory or are to be produced. To overcome some difficulties, in recent years, many organizations have opted to replace the several distinct information systems with a single integrated system that can support the business activities for different business functions. Such systems are called enterprise systems. An enterprise system, also known as enterprise resource planning (ERP) system, is a crossfunctional information system that provides organization-wide coordination and integration of the key business process and helps in planning the resources of an organization. With the help of ERP systems, information can flow seamlessly across the firm. Also, different business process from sales, production, manufacturing, logistics and human resources, can be integrated into organization- wide business process. An ERP system is driven by ERP software suite---a set of integrated software modulesand a common centralized database. The software modules support the basic business process under different functional areas, and the database stores data from and feeds the data to various applications supporting the internal business activities. Some Examples of business processes supported by ERP software include accounts payable, general ledger, cash management and forecasting, personnel administration, payroll, time management, inventory management, product pricing, billing, etc. Initially, ERP software was designed for automating a firms internal back-office business process, but now, it can also communicate with customers, suppliers and other business partners, Given figure shows a typical example of an ERP system.

For implementing ERP systems, Organizations need to identify the business processes to be automated and then map those processes to the processes provided by ERP system. All this requires a great amount of effort. Moreover, organizations may find that the business processes of these systems are not able to support the way that organizations business work. In such cases, the software may need to be customized to satisfy the requirements of the organizations. This may not only deteriorate the systems performance but also need compromising the information and process integration. Thus, to obtain the maximum benefit from ERP software, the organizations should change their way of working according to the business process of software instead of customizing the software. Nowadays, a variety of ERP software offered by different software vendors are available in the market. Given lists some major ERP software along with their vendors. ERP Software SAP R/3 Oracle manufacturing PeopleSoft ERP Software Vendor SAP Oracle PeopleSoft 17

BBA-V/UNIT-I/MIS iRenaissance MFG/Pro Triton Benefits of ERP systems ERP systems offer the following benefits to organizations in which they have been implemented. Communicate the critical firm-wide information on the business performance to managers all across the organization quickly, so as to enable them to make better decision and at the right time. Reduce the cost involved in transaction processing, hardware, software and IT support staff in a significant manner. Improve the quality and efficiency of customer service, production and distribution by integrating the companys internal business processes in sales, finance, production, custom logistics, etc. Help to create a more uniform organizational culture where everyone uses similar type of processes and information to do business. Ross Systems QAD Bann

Types of Decision