Book 1 chapter-2

Chap : 2 Examples of Information Systems Various Functions in Organizations: All organizations are divided into many departments or sections, with each department having an assigned functional responsibility. For e.g., an educational institute such as a large University. It will have divided into academic departments and a central administrative office. The administrative office will be divided into many sections, each with an assigned function. These all sections hierarchical chart shown in figure and their section shown in table.

Table: 1 Functions of Various departments of a University. Administrative Office Functions Student Section Students admission record Administering admission tests Students registration information Placement Accounts Section University budget Payroll General ledger of receipts / Payment Scholarships

Purchase section Order processing Vendor selection Stock register maintenance Issues Receipts Hostel Office Mess records Hostel purchases / stores Room assignment Residents data Medical Centre Medical records Medicine purchase / Stores

Works Department Building construction Building maintenance Maintenance of electrical installation and water supply Maintenance of roads, gardens Human Resource Personal records (leave, tenure) Assessment of employees Recruitment Miscellaneous Mailing Telephones Transport

Table: 2 Functions of Various departments of a Manufacturing Organization Sections Functions Production Production planning and control Maintenance management Bill of materials processing Marketing Advertising Customer records / Follow up Sales analysis Human Resource Recruitment Records Training Deployment of labour Assessment / promotions

Sections Functions Finance Billing, Payments Payroll Costing Share accounting Budget and finance planning Tax planning Resource mobilization (recruitment) Stores ( Material Management) Stock ledger keeping Issues / reorder Receipts Enquiry processing Maintenance Physical facilities Communication facilities Electricity and water supply

In this both table there are some common functions such as Human resource, purchase, stores and accounts and there are organization specific functions such as students section in a university and production section in a manufacturing organization. Sections Functions Research and Development Production improvement Product development Product testing Product design

Information Processing For a Store – An Overview: The important functions of a store are: To keep an up to date ledger containing stock positions Cater to requisitions for issue of items from the store Initiate reorder of items whose stock is below a specified limit Update stock register when items are received and Answer enquiries regarding availability of items in stores.

In a computer based system the stock ledger is organized in a suitable form for easy updating and retrieval and recorded on a magnetic disk. Magnetic disk storage is the primary storage medium for storing large data bases. Magnetic tapes or writable CDs are used primarily as a back-up storage unit for keeping copies of data on disk. Tapes are also useful for storing old files and for interchanging files between different computers. In order to create a stock ledger for a computer-based system it is necessary to first assign unique codes for each item in the store.

The unique code assigned to each item is known as the key of the item record and identifies the record. After that it is necessary to find out what data fields are needed for each item in the stock. The fields are determined by asking what outputs are needed and based on that determining the data needed. Once the record format for each item in the store is determined, one record is created for each item in the store.

These records are entered manually by a data entry operator who enters the records using a keyboard of a terminal connected to the computer. This is called on-line data entry. Data may also be entered on a separate computer such as personal computer and stored on a floppy disk. This is called off-line data entry. In off-line data entry the data entry machine is a low cost machine. If the volume of data entered is very large, then a number of machines can be used and data prepared, checked and corrected.

An on-line data entry method uses terminals connected to the computer. In this case the computer should be timeshared. On-line data entry is appropriate for inserting, deleting or correcting some records in the database. Off-line entry is used when the database is very large and the computer used is a server or a mainframe computer. If the database is small, the PC itself may be used for data entry and for data processing. Before data is stored in the disk file it must be ensured that any errors made during data entry is detected and corrected. This is done by a program called an edit program and a control total checking program. Such programs are essential to ensure the validity of data in a master file.

Figure shows master file creation / Update.

Table summarizes the operations performed in Stores Information Processing Create stock ledger Codify items Determine data fields needed for each item Create a record for each item Organize the records as a database Issues / Reorder Codify items Determine data fields required for each request Determine data fields required for each issue Create record format for requests and issues Create record format for reorder

3. Receipts Codify items Determine data fields required for each receipt Create record format for receipts 4. Enquiry Codify items Record format for enquiry Record format for response

The request record is entered through a keyboard by a requester. It is checked for validity by a program. A valid request is forwarded to a retrieval program which retrieves the data on the requested item from the Master file on disk. The item code in the request is used as the key for retrieval. If the requested number of items is available, then an issue slip is printed; otherwise a reorder request is printed. Figure summarizes this operation. A request for retrieving a record from a Master file is called a transaction.

The method of processing data in which transactions are processed by a computer as and when they arise is called On-Line Transaction Processing (OLTP). Examples of online transaction processing are airlines and railway ticket reservation systems.

There is another method of processing requests. A number of requests arriving during a day are collected and formed into a batch. The data in such a batch can be keyed-in off-line and a floppy disk created. This floppy disk can then be used to enter requests on the computer which has the Master file. The entire batch is processed and outputs are printed. This mode of processing is called batch processing . In payroll batch processing is more appropriate.

Enquiry system is an on-line transaction processing system. Figure shows enquiry system.

Varieties of Information Systems: Data abstracted from routine processing are further processed using well thought out rules to obtain tactical information. Such systems are called Management Information Systems (MIS). OR For taking perfect decision, timely and reliable information is essential and it is procured through the well structured method of information processing, collecting and disseminating to the decision maker. Such a method in the field of management is called Management Information System (MIS).

In stores processing example, some tactical decisions would be: at what stock level should reorder be initiated? How much should be reordered? These are determined based on data such as rate of issue of each item, time needed for delivery from data of order, transport cost, storage cost, shelf life, and loss incurred if an item is out-of-stock. These data have to be collected separately over a period of time.

Data used in operational data processing is normally stored in many organizations as back up or for legal reasons. These are called data archives. And the process of collecting it is called Data archiving . Analyzing archived data to observe patterns which assist in management decision making is called data mining. An example of tactical requirement : Consider the question of fixing credit limits for customers. Following inputs would be useful:

1. Customer details such as income, occupation, etc. 2. Customer payment history 3. Volume of purchase by customer 4. Outstanding dues if any from the customer. Using these one may formulate some rules to arrive at the credit limits and also predict their possible effect such as: Anticipated effect on sales caused by varying credit limits Anticipated loss / profit due to credit limits.

One has to formulate a model and sometimes simulate a system to obtain tactical information. The operational information form routine processing becomes an input to obtain tactical information. Information from multiple sources in an organization are normally presented in summarized forms such as graphs and charts to aid top management to take strategic decisions. Such systems are called Decision Support Systems (DSS).

In stores example a strategic decision would be to reduce variety in inventory by discontinuing some items in store, deciding what new items to introduce in the store, and when to open a new branch. Strategic information is often unstructured. Strategic decisions are made after trying to answer questions such as “ What will be the profit if I take a decision and what will be the long range loss if I don’t take it?”

If any person wants to open a new branch then following information is required: Projected demands in the new branch Impact on current branch Pricing in new branch Competition in new location Profitability of new branch These have to be provided using analytical and simulation model known as decision support models.

Decision support systems should also provide aids to the manager for conceptualization such as charts, graphs, etc. They should also provide facilities to ask a variety of queries on the database. The overall purpose of decision support systems is to aid in strategic, unstructured decision making.

Sources of Information: The main sources of information are: User of system Forms and documents used in the organization Procedure manuals and rule books which specify how various activities are carried out in the organization Various reports used in the organization Computer programs of existing systems. Information should be obtained from all the above sources. The consistency between them should be checked and then they should be summarized and consolidated.

Book 1 chapter-2

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Book 1 chapter-2