CHAPTER 3

BASIC OF INFORMATION SYSTEM AND DECISION MAKING PROCESS

3.1 DEFINED INFORMATION SYSTEM

3.1.1 Basic concept Information
Information is concept of group of data. Raw data such as text, images, object, fact,
figures are data which is unorganized and not contain particular value to its existence
in raw form. Such primary or secondary kind of data collected together, organized in
group, form in such way to create value to perceive for specific reason, data which is
formulated and presented in organized design or shape called information.
Information is more valuable then data and data which is structured, processed in
particular format and transmit value to its use in decision. Information is
interpretation of group of various data. Information recorded in one place creates
more value for effective decision making. Information received the knowledge of
particular area to know the fact and details in evidence record. Information changes
the point of view for specific incident or for taking certain decision.
Data collected through Primary source such as survey, discussion methods can use for
data gathering questionnaire or through face to face or telephonic interview and
secondary source via old record, publication, magazine, online database and books.

3.1.2 Features of information

Information which produces kind of knowledge and effective to use for further
productivity is good information, such information has certain quality to its existence:
 It must be accurate
 It must be relevant
 It should have in complete form
 Its sources must be trustworthy
 It must timely available
 It must received to the authentic user of it
 It must perceive value
 It must be presented in good and precise format

1
3.1.3 Basic concept of information system & Hierarchy
System means having particular principle to follow or use certain things for reason.
System has certain form and rules to follow. Hence concept information system
(Figure 3.7) delivered to corporate world with theory of particular set of format which
creates value from its usability. Information system where input is collected data
which further organize, sorted, formatted, tabulated, presented and disseminate within
the automated or manual function, and out of which all processing will produce kind
of information as output to serve the corporate word or for society.

Figure 3.7 Information System

Information System has certain Hierarchy which is as follows:

 Data: The raw text, fact, image. piece of information
 Information: Organized and group of data with value to it.
 Knowledge: Information which accepted with experiment and test.
 Wisdom: Distilled and integrated knowledge
 Business Intelligence: Managed information pertain policy for decision.

3.1.4 Sources of IS
Information system is essential element of management information system of
organization. Collect information through research survey, conference, reports,
publications, magazine, and newsletters internal and external source of information.
Internal information provides knowledge about internal policy strategy and
management levels and functional plans of internal organization. External source of
information system contains of competitors, customer, and suppliers in the market.
Current treads of technology and preferences of customer likes and dislikes. This
internal and external information and its maintaining system are the essential tools for
organization to study and analyzed for further evaluation of strategy. Organization

2
will get sure success if they update with and analyzed the sources of right information
and process with right system to use the information.
Information is essential in all. Below are the groups who are essential element of
information studies for further demand of business process transition and sources:
 Customer: level of satisfaction, preferences, capacity to spend
 Supplier: quality of material, terms of transition, duration to dispatch
 Distributor: facility to store, delivery time, logistic facility
 Shareholder: return on their investment based on the terms value of share
 Competitor : market scope ,more innovation and value added service
 Trade union: needs and demands, income and job stability
 Financial institutions: kind of source of fund, reason to invest
 Government: rules and regulations of legal policy, political aspect
These are the personal or impersonal information retrieved which provide details
defined in specific field for further process of information. Management manages the
information from received and collected sources which are relevant for organization
information system:

3.1.5 Essential aspect of information system

Information system is the systematic database of organization where team of
management continuously capturing data and in the backend team is working on the
process of sorting, analyzing, presenting data in such a way that create mean to it and
further it will useful for the employee in the organization to business transition of
decision making. Such information system are more accurate and complete in its form
as it was significantly evaluate by management expert through the automated system.
It timely available to user and its relevant and complete to add value to the
information. Information system is key factor in entire business process. These data
collected through the feedback from customer, face to face conversation, and
telephonic calls, social communication. Work of information system are linked within
all functional department of organization and certain code defined to linked their
activity in accordance with business day to day transaction. Challenges and risk may
occur in the market and can affect on activity of organization at that point
management ready with particular strategy to cover the risk of functional activity.
Information retained in time and use it in particular process will give complete

3
knowledge of circumstances and one can take right method to acquire the profit even
in critical phase of transaction. Planning controlling and decision making functions
represent value in company. Employees are involved in continuous process to
innovate new ideas and technique to use it in automated method. Information has
attributes depends on nature of the data organized together. Information system must
monitor everyday and maintain the record of transaction happened in it. Such stored
information system will achieve meaning for each process which reduces uncertain
event and management more proactively take decision to solve the issue and
contributes the knowledge for decision making process. Data transform into
information after going through all proceeding part of the system.

3.1.6 Level of management:

Management is the system of organization which consists of functional manager to
perform their task towards the organization goal. Management follows certain process
of planning, organizing, controlling, monitoring and evaluation process in business
process of functional activity. Manger has to delegate the task to their subordinate and
gets things done through the appropriate time and easy of forming certain decision.
There may be many different issues and problem to solve it management has to
perform procedures to complete the step to solve them. Level of management based
on authority to take decision on particular task of the organization based on it there
are three levels of management defined as explained earlier i.e. operational
management, tactical management and strategic management where day today
operation transaction, middle level self directed work and independent new decision
taken respectively on each phase of management. Structured decision, semi-structured
decision and unstructured decision on respective phase of management with this
information form also change the format of presentation and it made more effective to
achieve growth of the organization.

4
 Figure 3.8 Level of Management

With level of management (Figure 3.8) form of information change and decision
formulated on each phase also change effectiveness of the entire need of business
transaction. Collaboration of right and accurate information handled by particular
level of manager work on delegated information form will give desirable output.
Level of management perform task with information system maintained to grow the
business process with decision in the form of report implementation in transactions.

3.1.7 Concept of Decision making

Concept of decision making is process of achieving desirable target in the business to
form certain type of level in transaction process. Organization is integrated with
various departments like production, marketing, finance, operations, information
system, and human resource all such department performing their role to evaluate
information system for the better decision in respective department for transaction to
process further to gain profit out of it. Sorting of all unwanted information will reduce
unneeded information on database and sorted and organized database help in the
process of accurate and complete information on network for the user needs. Decision
making is the activity of certain rules and policies of organization where entire
business system depends on their selected decision.
Drive such decision will further give result of implementation in the form of gain
or experience to improve further activity of organization. Uncertainty in business can

5
 be changed or varied depends on the political, environmental and economical
conditions. Updated information system generate alert about certain issues so
management can change their business plan accordingly to maintain the stability for
productivity or financial investment, marketing plan, due to information system It’s
easy to management to ready with specific plan of action to process. Right decision
will give right output, it means if management manages right way of information
system of production database, system will give right fact and figure about inventory
management and right details about time needed to generate finance for further
production plan, everything is interrelated in organization. And function affected in
one area will also reflect the valuation of it in some other part of organization.
Decision is matter of right choices and right kind of choice is the matter of right
kind of available information system and right information system is the matter of
data collected from the sources and team who process on its operational and initial
level to form such a strong and fundamental base of organization information system.
All steps are important and on every step form changes from data to information,
information to knowledge and wisdom, knowledge and wisdom to decision and
decision into practices as business intelligence. So each small decision has its impact
over the business and inter-related with other group of functional task and elements to
it.
Determined quality decision is the impact of right kind of database and quality
human resource of management. Strategy designed and defined the different process
of activity to reach at right kind of selection criteria. That emerged the decision
further in the business. Well prepared management can achieve any goal in the global
market and easy to take decision due to ethical and rational fundamental rules and
information system available with them in the form of MIS. Decision is essential but
what more essential is the source of decision. Practically the management who
understand and maintained the policy within set of rules, they need not worry about
uncertain situations in the market.

3.2 Types of Information system

Information systems are generally based on need to maintain the database, hence
general three type of information system developed. General involvement between all
three information system are inter-related and all are important at its own level of

6
scope, type of this Information System is Financial system, Operational system,
Strategic system.
 Financial System: Due to automated system all accounting record, financial policy
changes are system generated. Budgeting, costing, funding, investing, accounting,
formulating all the mechanism monitor and control by the computerization and
automated method. Verified and monitor data fact information added in the
database and evaluate for further use of business transaction. This is one of the
main systems which need to be maintaining in right way of confidentiality and
integrity. System has to maintain the integrity of entire database as it’s all about
funding to all other department depending on the needs of their functional activity.
Financial systems maintained and analyzed by the finance expert to develop at
maximum extend for the organization growth. Approval and delegation to this
system will only to few members of management who are the member to support
and manage concern project, process or trusted work of organization. Ration of
funds allotted for production, operations of day to day task all these has to be
accurately record in the area of organization. This emerge the need of operation
vision. Financial database has sub-system support the decision making process.
Following is the list of sub system:
 Debit note/ credit note
 Audit book
 Balance sheet
 Trail balance
 Profit and loss statement
 Cost accounting details
 Debtor creditors list
 Budget system
 Investment and fund analysis system
 Shares and debenture system database
 Miscellaneous accounting details
 Operation system: Operation system record each type of activity related to
material, inventory and production related cost and expenses, details about all the
manufacturing concern record in respective field. with the help of this system
organization can maintain the records of inventory control system, all the records

7
 of purchase and sales activity maintained and computerized due to the software.
All the system basically has the term to continue with certain process. All
planning and monitoring related to the production activity can be done on
computer system based datacenter for the profitability of the business. Operation
systems are effectively control the process of entire business transaction which are
integrated with inventory production sales and invoice database. Any change in
one aspect will ultimate reflects in related system of organization this emerge the
system of strategic vision.
 Strategic system: In this system important to key factor to understand that what
kind of action plan will work to process further in organization that’s what
strategy of transaction in the business. Operational management team always
update the planner and reports of expenses and invoices in database which will
keep track all in one automated system where information changes its form
depending on the level of management and decision require for the moment of the
organization. This all process gain the competitive advantage over the market
trend due to updated system database for further plan of action in to the business.
Different types of system introduce with functional task of information system in
computerized database. Above three information system are the core areas of business
setup. Financial information system, operational information system and strategic
information system all linked with each other and its integration connected with
further sub division of sub units of the organization. Information system is the base of
complete process of business so management much careful about its maintenance and
usage. Information system adds value to entire system due to the information flow.

3.3 Elements and functions of Management information system

3.3.1 Elements of Management information system
Information system is the source of the decision and different process. This system
forms and consists of various components all together. Elements make the perfect IS
in the organization which create powerful fundamental of business sources and
communication throughout the organization. Following (Figure 3.9) defined the
concept of essential elements of information system:

8
 Figure 3.9 Elements of Information System

 Hardware: It is the primary need of the information system. All concepts will
constructive and can configure on this hardware devices. All system is based on
the technical infrastructure of computer system and it’s peripheral, server, routers,
monitors, storage devices and printers, mouse, keyboard. Now a day’s all
organization are using computers including mainframe, minicomputers and data
center. Computer process which has set of program which process through the set
of instructions has created the information system’s fundamentals for further
procedures. Adding data and processing it on various applications based on the
methods and techniques, all such process to complete, organization need hardware
system and its supportive devices to cover the entire process.
 Software: Without software there is no use of any hardware. Software means
program which provide set of rules and instructions. Anything can be added and
modified on computer that with the help of software program. There are end
number of software available in the market and end number of enterprise
programs which provide solution the business organization. There are two types of
software available in the market, system software and application software.
System software program manages the computer, it exist for the interface between
hardware and user, it also known as operating system. Application software utilize
for document, spreadsheet, presentations and many other applications which

9
 simplify the program. There are new customizing online applications which can
use for organization function department.
 Database: Data center where all the information stored and use for retrieving in
organization for specific reason. organization appoint research team who process
on gathering dataset that will store on storage devices further to it data processed
and it become information of various functional department, information stored
such production details, inventory data ,vendor master database, account database
,marketing database all such departmental database maintained and monitor by
management. These inter-related data used on the level of all the transaction of
business process in internal and external level of communication. It’s all
organized database which driven for organization goal with entire team of
management within organization. Team who manage such database will have
strong understanding of purpose to initiate the information system. Database uses
many techniques and methods of structuring layers of communication with the
right user for the access and authenticate. Such discipline followed by the
management to create impact of unity and uniformity.
 Telecommunication: Telecommunication is main medium of transmissions of
information over the network. Transmission of data happens with the digital and
analog source of medium. And to use such protocol internet is the wide platform
to expand the speed of communication with customer and with stakeholders
online. Telecommunication made life more easy and flexible. There are no time
constraint or location barriers for communication in the business process. Network
topology made it clear and aligned the line of communication between the
management team or even with external world of organization. LAN, MAN,
WAN is integrated for communication between database and client for business
transaction. Communication between different hardware, software, people are
happening due to advancement of interference tools which control and understand
the machine language. Video conferencing, voice over IP and internet, mailing,
messaging facility mainly use for communication. Such communication will be
more healthy and productive for organization as well as for the national growth.
Technological advancement has improve the speed and wide scope of information
database to clear the view and understand the new philosophy of learning new

10
 technology and necessity of the society for the better world with environmental
stability.
 Human resource: everything is invented through people and ultimately used by
human to improve the standard of living. Human resources is the very important
constraint which involve in everything to understand analyze evaluate and
improve for better and better services for the customer satisfaction and form
employee growth. All hardware, software, database used by management people
and it’s their effort that such database are created. Monitor and effectively
improving the performance of the employee. These are the people who work on
information system and generate the decision to run particular process
 Procedure: It is nothing but instruction set decided by particular organization to
maintain the respectability of entity. Policies, rules and certain type of process
need to be follow in the business such set of instructions are called procedure.
Every department is heading with particular area of function which is the key role
to them and to access specific kind of details of some other department or any
communication between different staff within organization or external part of the
organization to do this there are certain procedures. All information’s are
computer based and computer hardware has procedure of using software in inbuilt
set of instructions in same way organization has all system to interact for
production and for taking certain decision in way it decided to communicate or
based on the access permission. These all are nothing but the procedure rules of
organization. Few are standard one as guidelines to employee and few of them are
created to make the maximum use of technology for organization growth.
Management basically existed for getting things done through the skill of
monitoring and organizing, planning structure and strategy for organization all
these are the procedure which defined the purpose of organization existence in
society. Procedure is important in its role. These are the elements of information
system. Based on above elements IS form.

3.3.2 Functions of Information system

Study emphasis more on the importance of Management information system in
decision making. The effective management information system has effective and
impactful information system. Strong and analytical information system basically

11
creation of intelligence resource of human being who use the system, evaluate
database retrieve the details and dominate to the right staff member at the right time
and get things done within decided period of output. All these process of information
system mainly based on specific function. Research found that below four main
function which defined this functional information system within organization. Many
companies of thane district have effective information system and based on that these
private and public limited companies reach at global market and expand the business
in various product and services, function of information system are the procedure of
certain task to cover the entire process of organization, Information system can be
opened or closed system based on the requirement of database access permission to
user, communication and transmission way delegate depending on the authority,
Information system has series of function and based on it classification defined:
 Collection of data: data collected from the various sources. Primary and secondary
sources are the main sources. Data collected from research team and added in
database as input or online feedback collected from customer or from client. Data
collected in system will check its features relevancy with organization
requirement, accuracy, completeness and redundancy check will follow to avoid
further duplication and incorrect half data addition in system. Its filter option will
save time of user to work on unwanted data.
 Storage system: Information system is automated now a day. Its computerized
storage and maintain database in data center. All hardware and software combined
the database of information system. All storage area need particular atmosphere to
maintain it data center feasibility to its hardware and other interference and
peripherals. Depending on the size of database data center or computer storage
room decide and management will maintain the suitable expert staffs to monitor
its accessibility to information through approve permission and delegated task to
individual in organization. Antivirus updates, operating system updates or
monitoring log monitoring and backup system all managed by engineers and
administrator of the datacenter. Storage facility may provide to geographically
different location branch of the organization.
 Information process: Process is the systematic way of communication or
transformation of certain activity. In information process data transform in to
information and made it available to organization user for further decision

12
 making. Information process has activity of gathering data, sorting data, formulate
in specific form to create value to it and distribute to the right user. All these are
the process which are apply on information achieve features of completeness to it.
Such proceed data has concise value to use for business process and IS has that
capacity to transform data into right form of information. It can be in tabular form
or in document form, it may also content graphs or images with explanation or it
may have some attachment of summary report with it.
 Dissemination of information: Information system of organization has importance
on its content information. It meant for customer or for employee or related to
vendor, or it important to shareholder all these distribution of require information
to right candidate will based on the permission allotted to the concern one and
with respect to the authority to access the information one can get visibility, read,
write, edit or complete access to the information field for its further process work.
 Evaluation and monitoring: Based on the input added in the information system,
management has to periodically evaluate and monitor the information system.
Management has to overview the distributed information access to users to know
the right process followed by the employee with organization rule. To maintain
security and safety over the network and to avoid the risk of virus threads
management has to evaluate the logs and monitor the performance of the
employee through the available information system. This function will add the
value of discipline and principle of business intelligence.
 Feedback system: decision retrieve from entire process and implemented in the
organization will study further on its feedback of output result. Output of
implementation may received in positive form of profitability to organization will
appreciate to the employee for their contribution on the projected task. And if
output fails to achieve target to open the area of improvement on the lacking part
of the system. Whatever may be result feedback system always need to
summarized report to give clear idea about entire process to keep in record in
image forma or in tabular form of evidence with organization.

13
3.4 Introduction, Evolution of MIS and Types of Information System
3.4.1 Introduction and features of MIS:
Management Information system is integrated system of organization where all the
department of organization connected through the digital database structure and
management can easily access the database whenever require.MIS is system where
data transform in to constructive and valuable information to sale the ideas, product
and service through it in society. It’s needless to say now that without information is
element of MIS and data transformation process in to useful form is skill of
management and hi tech application or customize software to process on the activity
any functional department of organization. Management information system which
process data in such a manner that organization strategy implemented to support user
to solve the problem. Every organization has scope to develop and grow if their
information system has fundamental base of right sources of data collection. Data is
important element of information system as its foundation to build the further
structure of organization. It is an important task of managers to study and identify the
purpose to drive the resource in one direction or identify the problems of organization
which can solve with the support of MIS. Problems are many in functional
organization as every organization has functional activity of finance, marketing,
operations, manufacturing all these are departmental activity which is part of every
organization and to keep all these in its process of continue working management
need information and to support for information.
Management is the structure to plan, organize, act, control and feedback to
complete particular activity and serve society through the specific product or services
to the customer and keep supporting them after sale service to gain the customer
loyalty and to maintain the trust of customer. MIS needed in every organization now a
day it can be any industry of production and manufacturing firm, hospitality industry,
education industry, travel and tourism industry, marketing firm, financial firm and
many more which try to serve society and give scope to improve the standard of
living through the using quality product and by using quality services. All these kind
of industry has various departments to manage its many small task but important to
drive its movement in the organization. Manager can work fast if they get ready
reports of all details about many activities in such organization. These activities are as
below to keep the track and record for future view and study it in details to take
decision to solve in case any issue identify in the functional department. Hence below

14
is the list of activities proprietor or top management need to study and evaluate
company,
 pre-establishment phase
 establishment phase
 post-establishment phase
And support for data process to provide information for further reference. Pre-
establishment phase of company is entire planning about capital investment for the
business and kinds of industry establish whether it is of production industry or service
industry. Once pre-establishment phase crossed, company established then in this
phase, management need to define particular process to flow for further activity of
production or services activity. Once companies established and settle with the day to
day transactional activity management need to take care about customer feedback
system to improvise the product or service as per the customer preferences in future.
All these phase of company establishment are included with many small activity but
which are important to complete
 Select type of business to start
 Decide the purpose to start it
 Estimate the Capital investment
 Select the factory plant
 Select the warehousing facility
 Calculate the cost of transportation
 Need of human resource
 Skill and qualification of human resources
 Select the administrative plant
 Recruitment process
 Staffing
 Technological infrastructure
 Communication management
 Training to staff
 Plant layout
 Scheduling the time for shifts
 Productivity plan
 Machinery maintenance

15
  Reporting in meeting
 Research and analysis process
 Evaluation to reduce the cost
 Plan to improve the employee performance
 Monitoring production and administrative activity
 Quality control process
 Control over procurement process
 Control the payment system
 Control over the receivable department
 Manage communicating system
 Manage the technological platform
 Control over the inappropriate practices
 Maintain the law and legal approach
 Observation of market change
 Study through research
 Periodic meeting between managers and subordinates
 Provide after sale service to customer
 Evaluate the consumer likes and dislikes
 Customer feedback
 Study the consequences which was occurred in past
 Learn new and advance application and technology
 For future innovation established Research department
These are the activities of organization to perform throughout the life cycle of
organization. and management need to think about such element while going through
the phase of company establishment, right kind of selection is the half wining of
further journey through information available at initial stage of business
commencement and while performing these task management need to grow with
quality of database with them as a strong support system is organization Management
information system which function are as follows:
 Input
 Processing
 Sorting of data

16
  Tabulate the data
 Graphical presentation
 Texting form of data
 Presentation of data
 Output
 Feedback
Every MIS going through above step of data processing which give scope to select
various pattern and form of database to visualize different kind of form to use in
further system of management to solve issue of organization or to fulfill the daily
activity of the organization. MIS plays an important role in supply chain management
system of organization. It gives detail information about supplier, and define the kind
of result will get after dealing with particular suppler for raw material. Through the
automated reporting system managers can identify the vendor is best to choose for
particular procurement. MIS gives the right kind of solution based on the database
available in system and through the manager’s feedback evaluation.
MIS follow certain policy and guideline to work on the information system as per
organizations needs and requirement. There are various models of Management
Information System such as ERP System where Enterprise resource planning
managed through the application software. Entire database, processing task and
predicted outcome managed through MIS. It is very useful tools of the organization to
reply on system where information system maintained by professional and analysis
are organize with plan of action on time with accurate information system.
Management information system in e-business, e-communication world is important
to access relevant information. Information system is the backbone of entire
organization. Following are the important element and medium of e-business and e-
communication system:
 LAN connectivity
 Telephonic system
 Video conferencing system
 Voice over IP Communication
 Email and voice mail messaging system
 Web publishing
 Internet connectivity

17
  Intranet and extranet communication
 E-business model
 Web master
 Content provider and designer
 Web designer
 Web programmer
These are the elements of e-business and e-communication system over
information system. Enterprise portal is web based interface to use application and
services. Information system is central repository system which always available to
support for information. Remaining 48 companies list added in the appendix B which
belongs to Thane district. All such companies are the organized processing entity to
supply specific product to the customer and satisfy the need of require product. And
for this process to complete need information system, below are the Features of
Management Information System: Management Information System has combined
process of information system of many departments. It’s inter-related with each other.
Accuracy of database and authenticity of access keep MIS on top and essential to the
organization. Below are specific features of the Management Information System:
 MIS is integrated software application
 MIS is reporting based solution
 MIS is transformation system of data into information
 MIS give authentic access in its Database
 MIS is also known as inventory control system
 MIS is more management oriented software
 MIS has all information of functional system department.
 MIS gives rapid information
 MIS also monitor performance report for job evaluation
 MIS uses internal database and publish summarized report based on system
 MIS is automated and computerized system
 MIS produces demand report and schedule report
Information system is the important concept and has power to create valuable product
and system out of its right use. All the information is about the organization functions
and departmental work to manage and develop the new management information

18
system as integrated system of the organization. In communication phase completed
the various role of the organization and derived the profitable output.
These system need to create on the foundation of “data”. The word data is the
significant word and mean it to build overall system of information system. Data can
be anything which gives the part of information i.e. text, images, figures all these
collectively form meaning if they tabulate in right meaning and presented in graph or
chart, create patterns to it with the processing of sorting after collection, sort as per
the category of functional activity or add in respective functional table while sorting.
Collected data can be from primary source or secondary source of data collection and
any kindly of method used to complete it such as survey method, interview method,
observation method through questionnaire, group discussion, and telephonic
communication whichever is feasible or economically affordable to organization will
decided by the management. Once data collected next step of it is to add it in right
place to know its real value to use for what kind of functional database this sorting
done by experts of particular and respective functional employee of specific task.
Further sorted database form in well presentation format to know its real value and
one can develop value to reach the function of the organization. Then such
information system will disseminate to right people to perform the task to complete
for the organization. it means transformation of data into information has particular
steps to complete and these are the initial phase and function of the information
system i.e.
 Data collection as input
 Processing Sorting as per functional characteristics
 Processing Analysis to identify hidden pattern
 Process for graphical Presentation for best alternative selection
 Output in summarized form of report
This flow of work will give information system to work further for organizational
activity and get the things complete which assigned to employee. Here data converted
into information and information is now ready to use to solve the organization
problem. This is very important to managers to understand the real time use of
information and by right people to handle it. It is the skill to hire people for particular
job description and give them guidance and training to make familiar with
information system which he or she need to access to compete their assigned work. It

19
is the collection of the different sources which developed at level of staff of research
analyst to add it in the system for further use. User must understand the quality of
information need to add in to the database. There are categories of the information as:
 Formal information
 Informal information
 Decisive information
 Empirical information
 Tabular information
 Graphical information
 Statistical information
 Historical information
 Value added information
 Functional information
 Technical information
 Logical information
 Scientific information
 Subjective information
 Conceptual information
 Digital information
 Programmed information
 Non programmed information
All such kind of information has specific reason to be developed and add in the
sources of system database. This is the backend work of data segregation and analysis
to select of right kind of section as per functional system database where organization
can define the task to the employee to process further to accomplish the small steps of
the management decision. It is not important that how much money involved in the
entire setup to develop it and if it’s not use in proper way then return on investment
will not be much good. To retrieve maximum amount of return on investment only
possible when there is ethical practices and value added service present in the process
of production to distribution phase of information system. The entire business activity
is mainly depends on the strategy of business process transaction. Any information
system should have quality process. And system has to understand the needs of
organization structure. Management has three levels of communication:

20
  Operational level of management
 Tactical level of management
 Executive level of management
These are the level of management which decided on the strategic level with which
information change the form on each level of management. Information system
always supports to solve the problem of organization. There can be many situation
which are unavoidable and need to face with right kind of choices of element involved
in it. In business environment has various kind of situation which are the challenges
of business process i.e.:
 Internal problems
 Operational issue
 Transactional issue
 Inventory control and management issues
 Manufacturing issue
 Labor issue
 Time period issue
 Procedural issue
 Monetary issue
 Employee internal conflict
 Unmanaged system
 Lack of control over the system and process
 Computer illiteracy
 Incomplete knowledge about application software
 Communication gap
 Unbalanced management
 Rigid management policy
 Time consuming approval process
 Delay in revert from the top level management
 Unwanted interference between different department
 Hiding important information from managers
 Reporting to too many line managers system
 Frequent Change in reporting manager

21
 Big gap between internal meeting with employees
 Undefined role
 Unclear concept of tasks
 Different opinion of each decision
 Manager losing focus from organization vision and mission
 Inappropriate way of staff selection
 Under qualified staff recruitment
 Underpaid to employee will demote the quality staff
 Over paid the employee increase the monetary burden in organization
 Certified employee but less practical knowledge
 Employee who are not loyal with organization process
 Outdated system
 No contribution for employee welfare
 Less amount of funds for refreshment program
 No transport facility to long distance employee
 Shift duty concern in employee
 Rude manager with their subordinates
 Skipping important data from the source or in presentation
 Downtime in the organization
 Frequent technical issues and fluctuations in system or on server
 Low quality maintenance
 Most system and serve in category of under annual service maintenance
 Over depreciated machine
 Expired licensing software use in organization
 Fraud practices by employee
 Sharing organization data to someone who is not authorized to access it
 Low quality monitoring service
 Less evaluation of logging reports
 Low services from technical team
 Low control of information security team
 Less session for technical education
 Skip the scanning periodically

22
  Other internal issue
These are the internal issues and challenges of organization which can control through
quality time spend on its monitoring. By using reporting database and information
system database of human resource, technical reports, financial report all such
functional database and human behavior study analysis through database can support
and help to understand the problem and give solution to solve these kind of concern in
strategic way of communication and try to solve such issue by understanding the root
cause of incident. These are only the internal issues of organization if it’s not solve or
not monitor and control in right time with right way of commutation it’s very difficult
to stay such organization in market for long time as it has no use of having good
information system if it’s not use for human growth as well as for organization growth
with right kind of practices and ethics within organization. It is easy to correct all
issue with the help of management information system only the concern here to
change and divert the managers approach to get things done in right way by handling
staff with care and understanding as well as let staff understand the goal of
organization’s mission such mutual understanding will possible and can make the use
of information system management can lead market globally with right value with
services and product indirectly serve to the customer and satisfy all the organization
staff with their job satisfaction.
 External problems
 Market issue
 Competitor
 Political interference
 Natural calamities
 Low quality raw material
 Delay in delivery of raw material
 Disputes with suppliers
 Low quality of warehousing facility
 Change in customer change and preferences
 Other external issue
These are the external issues which need to understand and which can solve with
support of proper kind of information system about market changes, competitors
threads, suppliers details and their competitors or alternative options list of suppliers.

23
Using database in right mindset and approach to solve organization issue also need
the analytical view and power to understand the concern through available
information system. Management has developed the good relationship between
vendors. Professional understanding and mutual benefit need to fulfill through the
right ethical approach between procurement of raw material purchase. Developing
good repo is the skills but avoid unwanted involvement in unethical practices and
management has to understand the line of control to placed value and principle of the
organization. This kind of values will keep organization on right direction and long
term gain into the business world. To build strong information system management
has to develop the strategic approach in their process of business communication
within organization as well as in external stakeholders of the organization. Following
are the scales decided to information system which will be profitable to organization:
 Information system should have real data maintained
 Data need to be sort in right category
 Data need to be analyzed to create value
 Information system must be flexible
 Easy retrieval option
 Right access provided to right user
 Information system must be integrated
 It must available in time
 It has to maintain its integrity
 It has to maintain it confidentiality
 It must have good quality of backup process
 It is depended source but interdependent system with its decision
 Report should scheduled and auto alter to be set
 Data and information need to be updated
 Management has to monitor it for log report
 Information system which adds value to the structure
 Principle values to be added in system
 Security has to be maintained by information security department
 Software licenses need to be renewed
 System and server mainframe computer managed and maintained
 Antivirus on server need to updated

24
  All the unified communication system managed with connectivity
 Information system must sync with relevant database of functional department
 Proper level of communication between management and subordinates
 Timely feedback system
 Timely approval system
 Information accuracy of information system
 Globally connected with client limited access with security
 Shared what relevant to user
 Access provided by approval manager and that too with specific procedure
 Information system avoid the redundancy
 Information system which follow the hierarchical structure
 Information system which linked up with advance technology
 Information system which provide various techniques for support
 Information system which defined the direction
 Information system which combined with management level
 System which carry the professional information
 Information system which give complete database of market research
 Information system which managed human resource database
 Information system guide on manufacturing process
 Information system which give alternative solutions to the problem
 Information system which is more transferring in its process
 Information system which is not critical to use
 Information system which is the complex but problem solver system
 Information system which guide forecasting plan for growth
 Information system is value oriented ethical system
 Information system which has structural levels
 Information system is centralized database of organization
These and many more quality of information system gives right direction to
organization to accomplished the daily activity and long term goals. Management
information system derived data from secondary source such as internet, web surfing
or through primary source from observation or through interview method.
Management has various departments where all functions database developed as

25
management information system and present various reports to managers for further
study of evaluation.

Figure 3.10 Integrated systems- Management Information System

Source: e-Marketer, Inc, worldwide Online Access (2006)

This is above figure has Management Information System structure and presented
various reports through the processing of all data processing activity. Management
information system is design the logical concept (Figure 3.10) with physical
implementation process for data transformation into the information and support in
various task of organization. The processes require a lot of data. And demand
increases in each phase of management. Many decision based on MIS prove the right
choice of action. Information system provides information through reports to take
decision about various departments:
 Finance department
 Operation department
 Marketing department
 Human resource department
 Information Technology and communication department
 Facility management
 Commercial department
 Research and development department
 Manufacturing department

26
  Transfer department
 Transport department
 Travel and tourism department
 Warehouse department
 Training department
 Medical department
 Procurement department
 Inward outward department
 Economic department
 Cost and auditing department
 Information security department
These are the various department of the organization which has its separate database
in information system where managed by respective managers and control through
strategic process. Every department follow particular process to complete the tasks
delegated to them. And analyze the result through reports and decision taken to
implement on particular problem. Information system in central repository database
with the support of it organization drive the goal to reach maximum level of profit and
improve the performance of employee. Three strong dimensions of information
systems are:
 Organization
 Organizational politics
 Organizational culture
 Organizational environments
 Organizational structure
 Technology
 Computer network
 Server management
 Information security
 Technical support
 Management
 Financial management
 Marketing management
 Operations management

27
  Function - Plan Act Control Monitor
 Human resources management
All these function and sub function carry the business process transition. Information
system is collaborative combination of above function and run the business process
transactions, and it has impact on different aspects of organization i.e. behavioral
impact, Economic impact and organizational impact, impact on competitive
advantage. As organization growing with information system use customer, supplier,
and stakeholders all are involve with use of integrated use of information system, it
also has impact on cultural aspect of business. Information system builds to provide
support to user in the terms to guide for require solution for particular problem. There
are many ways to analyze impact of information system in organization. It ultimately
achieves competitive advantage due to all automotive system. Information system
helps to understand many elements which will affect in the decision making and these
elements are nothing but the right selection and decision to take the advantage of
available information system.
 Low cost leadership
 Product differentiation
 Efficient customer response system
 Mass customization
 Focus on market niche
 Supplier’s trustworthy relationship
 Market positioning
 Extending value chain
 Virtual company strategy
 Enhancing core competencies
 Business eco-system
Such elements affected due to right selection of decision through information system.
The extending value chain Information systems improve the performance of various
businesses and solve the problem of core competency. Information always gives
scope for innovation, expansion or way to compete the challenges. It gives scope the
idea of synergy.

28
3.4.2 Evolution of MIS
Information is the important element of business management. Previously 1960’s
period of business transaction based on Transaction processing system for routine task
in manual filing process and few calculations on available machine based systems.
Further it replace with computer based system for information record management
with faster and more accurate system which were similar of manual process of record
keeping method of invoices and payroll system .at the end of 1970’s MIS Emerged
and started keeping records of all levels of organization activities. Information require
in all phase and level of management for predicted or non-predicted situations.
Further in the year 1980’s (Figure 3.11) it designed and invented Decision support
system where customized and automated methods processing to achieve decision on
particular issue based on the information evaluated from MIS system and Executive
information system formed next for the top management who deals with new and
uncertain events and for further with non structural solution to organization with
superior and experience based decision retrieve by top manager who are final decision
maker. This evolution has many stepwise layer where information went through many
forms of structured semi structured and unstructured decision for business process.
All these automated computerized telecommunication system proceed and fulfill the
needs of information to all levels of management. And improve the performance of all
levels of management member’s work together to achieve growth for organization.

Figure 3.11 Evolution of IS system

Source: “The Revolution in Information Technology”- Conference on new
economy (2000) by Greenspan Alan.

29
MIS Concept based on computer based system which work more accurately and with
the integration of many appropriate equipment connected with different operating
system which collaborate it with many different access information system of
functional activity of organization.
MIS widely spread in many organizations due to its easy and accurate availability
of information. It is well constructed and organized method of data transformation
into information and transmission to require department. Due to innovation in
technology all computerized system and unified communication connected and
transactions are happening virtually from buying and selling to payment process. Due
to system management credit process and refund system also maintain and process
online. It’s all because of proper and updated information system. Small business
also now a day’s connected with global client for many business process due to strong
availability and processing of database system of various information need to
progress. And even in near future due to strong base on management information
system organization will grow lot in the global market then today’s situation like as it
reduce the time gap of communication and need of real presence of meeting as hi-tech
development of video conferencing and voice over IP communication facility
generate all logs in digital form for further monitoring even in the small range
business process can expand their business expansion. Information system support
managers with database of all the elements of organization. Hence manger can get
things done through the available resources.

3.4.3 Types of information system based on functional activity

Information based on various department of the organization is which established on
the base of functional activity of business. And each functional area has application to
manage their entire process activity and defined function to achieve certain output.
Information classified on the basis of functional area and requirement of business
process. Performance and productivity will improve based on the system adopted by
the organization.
Managing management information system and support manager at all level of
decision making phase in all functional department of organization. Organization
system has process re-engineering to improve and more effectively perform the
integrated system for further performance of the employee. All over the world
enterprises installing and adopting enterprise application based on unified technology.

30
Below is few listed enterprise applications which are perform effectively in their form
to provide effective output as decision. These information systems manage each area
of organization department with its integration of togetherness for business growth. It
has improve the accurate performance of management in specific are to obtained
targeted goal to particular functional department such as marketing human resource
technical production or even of customer care department where application based
system improve the accuracy at maximum level and also provide efficient service to
customer, client and other stakeholder of organization:
 Management Information System (MIS)
 Enterprise resources Planning (ERP)
 Supply Chain Management (SCM)
 Customer relationship management (CRM)
 Transaction Processing System (TPS)
 Executive Information system (EIS)
 Decision support system (DSS)
 Knowledge Management System (KMS)
 Content Management System (CMS)
 Office Automation System (OAS)
 Business Intelligent System (BIS)
Management need information in all part of this transaction and that has to be updated
and accurate also it must available in time with low cost. Information system
maintains is management will perform right kind of decision for further process. All
above enterprise application software of particular functional department plays a key
role to the office work and decision making process. Employee of organization
actively involved in the processing system to add information sort for further
delegation of task, proceed further with client communication and transmission flow
of required document, invoices for processing transaction of productive performance,
to evaluate financial analysis and human resource management and supply chain
management process where it is easy to take decision of operational task based on
integrated system. Marketing information system provides various sub-types which
engaged in marketing activity such as product management, marketing research
database, product pricing and branding and promotion. Marketing has function of
buying and selling, market segmentation, target marketing; Information system also

31
plays an important role in manufacturing information system which provides decision
for timely production and proper function of manufacturing database system.
Manufacturing information system designed for planning, development and
production of goods with management inventory control, manufacturing planning,
process control, production scheduling, and quality control and testing, further in
organization support information system in personnel recruitment, planning,
attendance system, salary database, training and development, job placement, staffing
database and performance appraisal system. Geographical information system is
framework which store, analysis and database of location details. Information system
manages the operational scope and maintains the functional system for competitive
influence and overall database system. Information system is crucial system of future
for organization survives in global market. Modern organization automated and
expanded with the support of information system of various functional systems.
Decision support system is important segmented of firm. IS helps management to be
ready to face even unpredicted event of business process and solve critical situation.

3.5 Approach of MIS to use information in competitive advantage

Information system mainly supports to supply quality of information to its user and
management information system. Has subset in digital firm to serve the user so its
service management system which has initiation process, transition process, pre-
service process, service process, post service process this is the continuous cycle of
process to solve user query.
 Initiation for service is the front end process
 Transition process to service is front end service
 Pre-service is back end process
 Service is backend process
 Post service is front end process
Such approach to solve customer query online will support through the service
information system i.e. SMS. There is application software in service industry and
there are many different types of industry:
 Manufacturing industry
 Agriculture product
 Wooden product

32
  Lather product
 Chemical product
 Pharmaceutical product
 Water supply product
 Metal product
 Service industry
 Aviation
 Hotel
 Education
 Banking
 Insurance
 Travel and tourism
 utilities
 Commercial industry
 Auditing firm
 CA firm
 Distributor firm
These are the type of industry and subtype of industry found in Thane district with
different kind of production of different goods and providing services in to the nearby
market as well as export the goods in abroad. All such big organization also maintains
the information system to manage the database. Many organizations need the specific
functional database management to run their business which is known as core
application i.e.
 Manpower Planning
 Inventory Management
 Finance And Accounting Management
 Payroll System
 Resource Optimization
 Service Management
 Inventory Management
 Planning and control management
 Recovery management

33
  Analysis management
 Vendor master management
 Technical support management
 Communication and mass media management
 Web based feedback management
 Content management
 Material management
 Transport and Warehouse management
These are the some functional database managed in organization through web based
application, ERP-SAP, CRM, and SCM. This has its benefits to use and implement
such information system database in the organization to effective result here are few
benefits of MIS system to use in companies that are below:
 It reduce the cost of operation
 Increase the productivity
 Shorter delivery time
 Instant reporting system
 Business process transparency
 It’s more flexible to use as per access rights assigned to user
 It is client server design
 It is proactive and effective IS to use
 It work more faster due to advance application software and technology
 It support to many other application system tools over the network
 It has strong interface capacity
 It uses data warehouse system
 It is centralized repository system of core database of entire organization
 It is knowledge bank to employee
 It provide quality of decision
 It support to set an alert for further need of inventory for production
 It help to keep update the employee details of organization
 It improve the working capital management
 Reduce the over kept raw material or inventory in stock
 It improve the ROI

34
  Secured information access to authorized user
 Provide strategic information to management
 Its multi dimensional data and information pattern
 Readily available support model
 Resource utilization of organization resources
 Employee empowerment system
 It provide business transition benefit through profit
 Usage of the best commercial process
These are the maximum usage and benefits of using MIS in the organization. And this
will give all the details about the resource planning and forecasting growth for
organization in global market. MIS helps to provide decision support with the
connection of knowledge management. Knowledge develops systematically by
thinker and it shows that person get ability to understand the particular problem.
Knowledge management system is one step ahead to MIS. In competitive world
organization develop KMS which has logical extension to sophisticated MIS. It
improves the process capacity and decision making power of user. it has various
process to maintain its database
 Define
 Capture
 Manipulate
 Store
 Develop
 Develop information system
 Knowledge creation
 Designing application
 Create intellectual process system
 Upgrade it on periodic duration
 Distribute and share the content
KM is effective way to make decision but again MIS important will always be their
because of its fundamental processing power and entire structural way to maintain the
information system intact. KMS is based on MIS hence MIS will always be a priority
to maintain in organization. There are various tools available for knowledge
management.

35
  Data warehousing
 Data mining
 Data mart
 Process modeling
 Management tools
 Search engine tool
 Work flow tool
 SQL query tool
 Database management tools
 Web based tool
 Document management tool
These are the supporting tools to knowledge management system. These provide rapid
information access to the user. Knowledge management database going through three
phase depended on knowledge, interface technique and user control technique. It has
considerable tools such as semantic network, Frames, Rules these are the conditional
statement to take place. Management information system plays a vital role in decision
making where decision taken through various type of evaluation and analysis with
functional database. Decision must be objective oriented as per MIS relevant design it
provide conceptual format. It is very important to know the concept of decision
making. And effective information management strategy i.e. IMS which has its
benefits as follows and it developed on element of unified technology:
 Customer can track the status of proposal
 Its status of paperless processing
 These controls the performance
 Data warehouse management
 Develop data mining application
 Provide access information system
 It processing fast
 Control the cost
 Gain the customer satisfaction and loyalty
 Quick decision due to automated system and 30% manpower to its support
 Its real time system managed and developed
 It gives scope to many other systems

36
  Useful to functional manager to take decision
 Customer interactive
 Resource management
 Strategic management
 E- training and learning system
 It develop relationship management
 Provide technological platform
 It improve the people to people business
 Trust of customer ,integrity at higher level
 Relationship model uses the client- server model
 Uses LAN ,Internet, Ethernet, web enable application
 NT 4.0 Unix OS
 VB, IIS 4.0
 Oracle application 11
 Database server
 Application server
 Firewall server
 Proxy server
 Microsoft transition server
 Web server
 It is a continuous innovative product management
 Recover measure and cost control
 World class service provider
 Business function model
 Technology solution architecture
All these above are application develop which is first choice of customer and
basically these all advance information management strategy needs MIS at the
fundamental study and analysis of customer choices and preferences with the model
of application integrated all together. MIS provide various report and that are easy to
clear doubt about any situation or to solve the problem. There are important quality of
MIS is to support user with information at all the level of management. It provides
report of for organization activity of manufacturing and service firm, based on

37
application system software and database which link with function system which
retrieve such MIS reporting to support for respective decision making system:
 Schedule Time report
 System Log report
 Financial status report
 Marketing information report
 Inventory report
 Application licensing report
 Web access log report
 Employee details reports
 Suppliers report
 Customer details report
 Employee performance report
 Production scheduled report
 Periodic report
 Product life cycle report
 Price strategy report
 Operational activity report
These are the different kind of report and presentation system provides to analyze for
forecasting the decision. Manager need to understand the concern about information
system which has elaborated through reports so that they can easily take decision and
implement to achieve the benefits to solve problem of organization. This information
system elect the decision making process to resolve the business issue. And MIS
remove the barriers to evaluate the information system very easily available. And
because of it all decision are not frequent decision, few decisions are periodic
decision. Decision support system linked managers with non structured decision
which has no structural process to apply but its output will give direct result and
action within organization. It considers the use of MIS with hi-tech and its effect on
provided decision impacted on public and private limited organization of thane
district. Below are the important factors of MIS:
 It survive the company
 It is the source of information
 It is the framework design

38
  It accept the new operation methods
 It enrich to researcher
 It improves and provides quality of decision
Decision support system directs the strategy toward organization tasks. After the
decision has taken executive information system need to overview with board of
director and professional expert and need to approve on the decision or if require can
change in needed form to implement in the organization. However the management
analyzes the database through computerized system. Now as time change there is
changing nature of competition as technological environment has captured
organization function and work flow. In competitive period increasing information
technology give additional support to manager and helps to solve the problem.
Different function industry maintains different kind of database of information
system, company today altered into the commercial business structure developed with
information system. Company should accept and adopt structural changes as change
in industries. Strategic planning is for long term decision. Strategy planning generally
follows four way paths and it subways:
 Market orientation
 Target market region
 Market research
 Market segmentation
 Change in market due to technological advancement
 Competitor entry
 Understanding of market demand
 Product orientation
 Product reshaping
 Product size
 Product pricing strategy
 Product substitute
 Growth orientation
 Business expansion plan
 New product launching
 Open new branch in foreign country
 Overall company strategy

39
  Improvement in employee performance
 Integrated system database
 Staff welfare contribution
 Job enlargement and enrichment to employee
 Forecast annual profit margin for next 10 year plan
Hence all above strategic plan are the further tasks to monitor and control by
management to continuously follow the strategic plan in value oriented principle. This
is real strategic control through information system which needs to develop the
organization growth and improvement for new product and market innovation as
target to work with the system. Strategic plan is the systematic way to move forward
to accomplish the particular goal and analyzed each step in way while moving
forward. It is the business function where all top level manager will overview the
reports and lower and middle level manger’s work justify from the reported work.
And top management can take unstructured decision to implement based on the
reported decision. As its all studies report presented in front of top management so
that it clear pathway found to top managers to just check how to withdraw the profit
from available resources with it maximum level of resource utilization. Following
aspect of strategic business objectives of MIS
 Operational excellence
 New product, service and business model
 Customer and supplier intimacy
 Improve decision making
 Competitive advantage and survival
 Provide best control system
 Powerful monitoring on process flow
 Obtained maximum profit
 Capture maximum region of market
 Customer satisfaction
 Gain consumer trust and integrity through quality of product and services
 Systematic way of employee workflow
 Improve the right practices of approval from line manger
 Enhance the processing flow smoothly but rapidly
 Linkage of process flow from one step ahead to other

40
  Control over wide distribution network
 It support to develop and establish leadership in market
 Guided in product advertisement
 Improvement in supply chain system
 It is the real time database
 It is driven by industry level changes or government regulations
These are the certain new adoption and benefits of strategic management system and
it also help in development process of decision making. Strategic management is
procedural management system where manager monitor performance on subordinate
on each phase of process flow and update in meeting for any further relevant change
in the process flow. There are many ways to complete the decision making process
through the following process:
 Identify the decision to be made
 Collect the information
 Identify the alternative
 Evaluate evidence
 Select one from different alternatives
 Implement chosen one
 Review decision
 Study the consequences
Decision making in strategic level has above steps to be followed and evaluate the
result and implemented decision. Study of its consequences will give pathway for new
innovation and chances to improve the factors which were not strong enough to
complete the strategic phase in successive way.

3.5.1 Different types of MIS approach

Data processing system has certain steps to complete within decided plan duration and
estimated cost for its implementation that’s called Strategy. People from organization
perform as per strategic activity planned. Competitive environment enhanced use of
information system and strategic approach will decide desirable success of
organization. Developing management information system is kind of approach
(Figure 3.12) to build the entire system with the particular principle to accomplished

41
goal of organization. There are various other approaches of information system which
keep updated and accurate information system in organization:
 Contemporary approach
 Enterprise application
 Right selection from the sources
 Technical approach
 Computer science
 Unified communication system
 Behavioral approach
 Consumer preferences
 Psychology
 Sociology
 Strategic approach
 Management approach
 Operation approach
 Economical estimation approach

Figure 3.12 Different types of MIS Approach

42
 Contemporary Approach: Modern approach to information system is
integration and connectivity to all require fields of organization, No unique
rule can set here on integrated system. Theory of multidiscipline factors of
existing issues in the organization is based on Management science, selection
of right decision from wide source and enterprise application of organization.
They composed of many advanced technical devices and applications with
management practices customized on the basis of management strategy.
 Technical approach: Technical approach of Management information system
mainly based on what kind of systems, unified communication application and
devices and technical support system to monitor and evaluate the research and
innovation for the development of new appliances. Methodology use for
particular process to complete management has to verify that applicability of
certain type of compatibility with entire organization. Operational day to day
task are easy due to technical approach and it will more effective due to
calculative and mathematical approach in its evaluation process. Management
has to be more precise while decide certain infrastructure to use for the
organization because its usage and skill need to update accordingly in the staff
of organization. Format, design blueprint of fundamental base of technical
concern need to be estimate on unified communication technology to optimum
use of information system for organization.
 Behavioral approach:
Anything which has advanced and new is the reflection of change in
preference and adoption skill of employee and preferences of customer needs.
Behaviors; approach is need to consider before decide certain strategy in
department. Nature of business and nature of application, process, method and
style everything happen in organization based on behavioral pattern of the
employee and likes and dislike of consumer buying capacity which affect on
rules set by management to complete particular task of the organization.
Sometime it’s difficult to accept the technological aspect due to flexible to use
certain technology from long period of time. Behavioral pattern can change by
diverting employee’s interest area toward organization goal will ultimately
turn their point of view to involve in learning new technology.

43
  Strategic approach: Information systems provide timely information to
management to perform specific task. For value activities certain plan has to
create and implement in process. That must evaluate in economic form,
technical form or in modern form of change accepted for organization growth.
Operation research, economical estimation and management science are the
basic element to decide about strategy of business process re-engineering
featured with function of technological application and management level of
communication. With the help of strategic view Management can achieve the
targeted goal for organization. Strategic approach mainly consider the time,
cost, resources and nature of expansion with region details as internal details
well as external details of customer needs and political and economical
conditions of outer world, these all criteria will decide particular strategy for
the business to grow in its life cycle.

3.6 Define decision and different models of decision making process

3.6.1 Define decision and Decision Type
Efficient administrator is those whose decision taking power is accurate and based on
judicial way. Strong forecasting vision always helps to organization decision making.
MIS plays a role in decision making in short period of time. A decision is choice of
best alternative in critical situation or in normal situation. Decisions are very
important to complete transactional process, operational process or strategic
processes. Decision is single element which drives the entire system to identify it by
using many resources together. Following are few quality and characteristics of
decision which give profit to the organization:
 Decision should be practical
 Decision should be relevant
 Decision should be relative important
 Decision should be object oriented
 Decision should be accurate and effective
 It’s a result of integrated solution
 Decision should be value added in the organization
 Decision should be proactive
 Decision should be economically affordable

44
  Decision drive with less resources but will be fruitful in future
 Decision is always subjective to something
 Decision is the concept of execute
These are the quality of decision. Decision is defined as processing to retrieve the
concept of decision to implement and use further to process in particular decision. It
result reflect the impact of decision. It utilizes the resources and optimizes the profit
out of implementation of the decision making.
Decision making is the process where decided steps are obtained by the
management for information extracted by managers. Gathering data, sorting data,
monitoring data, disseminating to the employee for further process to take decision on
working for certain pattern of report for final output, all these activity involved in
decision making process. Decision making is process of selection of time in planning,
organizing, staffing, directing, controlling and communicating within the team or with
the client for business transaction process. Decision making is the art of judicious
choices between many other substitutes of choice. Some decisions are long term some
are short term decision. Decision basically grouped in three steps:
 Strategic decision
 Tactical decision
 Operation decision
Decision making basically form on level of intelligence for identifying suitable
option, developing particular format for plan, select the best alternative, overview of
previous choice to take and improve right decision further for the upcoming event of
organization. It’s repetitive task of organization in the process of organization.
Decision type basically evaluated based on its scope to explore more objective toward
goal to achieve. Degree of knowledge reflect through outcome of the organization and
situation based decision always uncertain to with its output but such experimental
process create the system of communication with specific corporate rules for further
procedure to continue for decision making process. Half knowledge will always
dangerous to apply at any level of particular task because it will always uncertain
about the impact of the result.
 Programmed verse Non-programmed Decision: Programmed decisions are
available in sequence to implement with pre-defined rules in its processing on
specific scenario such as system of payment transaction based on vendor

45
 master database to the supplier on regular purchase for materials or service,
these are the process to follow programmed decision to make the payment as
per the invoice generated through the system on particular purchasing goods,
it’s kind of repetitive task of schedule takes of reporting ,payment or data
entry on particular fields of the database process of organization. Non-
programmed decision of system where rules are not set but it will modify or
update based on the requirement of situations of change in the other aspect of
the business process, such decision of acquisition, merge or new branch
opening or new product launching, these all are the example of non-
programmed decision. Particularly such decision rights are reserved with top
management only. Lower management and middle management will have less
interference in such decisions. Non- programmed decision declared at top
management by to executive of organization and followed by lower level
middle level manger of the organization.
 Opened verses closed decision system: Open decision system where set of
program open to modify or change the information at the data entry level or in
the mid of data processing. Closed decision system where program already set
certain rules and can’t change anything in it. No modification will possible in
closed decision system. MIS always try to convert the open decision system
database to closed system database so user of it will get ready form of decision
on certain situation of their organization which is already tested previously for
specific situation. Manger can select methods, desired outcome, and technique
from such decision systems to implement.

3.6.2 Features of decision making process

 Decision making is the process of choice: Decision mainly based on the
alternatives of various sources related to the situation. Right choice made right
kind of result. Depending on various performance and task in the organization
manager has to perform with particular decision. And decision completely
based on the performance of the manager to certain production or accounting,
recruitment activity or any kind of selection process in method to
implementation. Choice has its own impact on particular decision and

46
 ultimately its affect to the final output. Hence choice plays a very important
role in its dimension of different elements.
 Decision making is active step based system: Decision making process is live
process of organization strategy. Its carry responsibility of its implementation
on particular situation. MIS itself computerized system of automated process
to run business activity. Decision making is active step of business process life
cycle as its affect on environment of organization and even affected on
performance of employee.
 Decision making process is result oriented system: Decision making process is
resulted into final product to the system which used as decision on particular
situation. And its orientation is capacity to give end result from the entire
process of transformation and communication. Result give further pattern to
implement in particular situation or some times its give kind of experience to
the corporate people to understand the real potential of the decision to use in
many other area of organization system.
 Decision making process if repetitive task: if decision give fruitful result
manager will use same decision in repetitive mode in process various times to
achieve target sale of product and services in the market. Repetition of
successive decision will also increase the sale ratio to gain consumer trust in
the market. Such decisions create their value to organization and give stability
in the global market to gain maximum customer to their product and service.
Sometimes decision making process need to improve few things in its
methodology or mechanism to achieve desirable success so it can repeat but
will modify further to improve criteria which gives most positive output to the
organization.
 Decision making is balanced process: without decision no organization exists
on the earth. Every organization certain level of decision and it maintains the
flow and procedure to follow for particular reason to add value to existence.
To avoid wastage in inventory management, management must know the clear
status of available resources of production material through asset management
system which keep balance in firm to decide about need of material and
resource for the next production. above is the example how decision making
process keep business in balance financial in same way decision always

47
 maintain the balance in various other department of organization such as
operation management to take decision in day to day task, human resource
management for skilled worker slot allotted with the work they can capable to
complete through their knowledge, supply chain management system which
keep vendor data master in proper data to maintain the balanced coordination
between stakeholder with the external client. So in all form of organization
decision making process plays an important role.
 Decision making is the multi-dimensional process: as explained above
decision making process entirely inter-related with all other department of
organization. And decision process not extracted only from one sided
database. Decision reports taken through MIS system are multi-dimensional
element which relates with other factors of functional department. Complete
overview and connectivity with entire business process has different layer of
information transmission over the network.
 Decision making is the fundamental reason of process drive: Complete process
is driven only for desirable purpose and objective. Fundamental reason of
process to drive to achieve particular reason of its existence. Anything which
collected, planned, maintained, monitored and evaluated is all about to
extracted output from certain process of decision.
 Success of decision making process is dependent on the following elements of
organization and its proper use will give right kind of output to the
organization, depending on the following components:
 Information system
 Managers approach
 Process management
 Strategic level
 Operational level
 Tactical level
 Approval procedure
 Medium of communication
 Updates about timely reporting system
 Reports evaluation
 Presentation of reports

48
  Group discussion
 Managed intellectual property
 Accurate input from information system
 Analytical process overview
 Inter department relationship
 Use pattern of information
 Organized resources
 Technical support
 Data Security
 Valid and update data
 Authorized and assigned database access
 Information in tabulate order, graphical view
 Positive approach while selecting source of information
These and many other supportive tools and techniques helps to gain valid decision
making process. All element use timely and achieve the goal of information system
through the output of right decision for problem to solve. Organization need to
maintain structural process in management information system. Information is
everywhere manger has to understand which one is most useful to select and which
one to avoid. This is the way a manager has to perform in each task to achieve
maximum growth from the entire process of information system. Decision making is
the process of right selection and timely implementation. Experienced and skilled
managers are highly intellectual to understand the accurate selection of entire process.

3.6.3 Models of decision making process:

Decision making model are the difficult task which has many aspect to obtain its
positive result. With concerns elements and factors inclination of advance technology
of communication made easy customization in the application software. Model of
decision making process not only give result oriented system but also maintain the
stability in organization process to achieve it s success through the implementation.
Models contain certain specification in its nature and logic behind its name to
implement for particular reason. Following are the name of decision making model:
 Balanced Model: This model also know as classical model or rational model,
which has specific steps to complete the process of balanced decision making

49
 model. It’s practical and adopted to use in certain situations because objectives
are clear and problem are known to the management. Its rational decision on
issues of the certain situation where decision of set of procedure followed to
resolve the consequences of the organization problem. People are aware about
the problem or challenge of this system. And alternatives are available in
regards to plan of action. This system also can forecast the issues related to
other business activity. It’s not bounded to certain situations and its works like
open system of the decision making process to keep balanced the business
process transaction. Herbert A. Simon defines that balanced or rational
decision consist the term intelligence. It’s pure defined about end and means.
 Directorial Model: its administrative based decision making model where
decision model depends on certain limit of one or many constrain such as time
constraint or limitation of skilled human resources, time, processing
capabilities. Something out of it restrict as limitation to certain level to its
decision. This concept of bounded rationality decision model developed by
Herbert Simon model who explained that decision are deal with certain limited
rationality in their decision making process.
 Demonstrative Model: this model based on the retrospective decision making
model. Manager aware about the decision and goal out if entire process at the
being stage of decision implication. This decision making model has the
capacity to evaluate and analyze to reach best possible alternative to reach at
particular goal and all these can demonstrate and evaluate for best alternative
decision for the organization growth.
 Six step model: Six step model of decision making defined process of rational
decision making where six steps explained the entire task to reach at
conclusion. Steps are identify the problem, find decision factors, number all
factors based on priority, study the substitute for decision, review of all
decision and final selection of best decision. This model contains the process
of research and strong information system to reach at different solution for
problem. Decision may base on Heuristic approach of assumption or it may
reach at the level of satisfaction.
 Herbert Simon model: it is the process to arrive at decision which is mainly
based on three phase, Intelligence, Design, Choice. Intelligence phase which

50
 draw the line between the real situation and expected situation of business
process transaction to get it solve. In design phase model develop to solve the
problem of particular situation. In Choice phase manager has to evaluate the
criteria which going to affect to solve the purpose of decision making. So
criteria like time duration to take decision, maximum profit, avoid wastage.
Select most benefited alternative to solve the problem. If it fails to solve then
manager start all over again from the step one to identify the problem and
what should be result from the entire process. Effective MIS has to provide
accurate decision on problem. Various mathematical and statistical calculation
methodology and report based evaluation of automatically meet need of firm.

3.7 Decision analysis tools and technique:

Decision is the important output of entire process. Result after its implementation is
different output which may be part of evaluation for further certain or uncertain event
of organization. Decision making process mechanism completely based on technique
and tools used in the process of decision making models, following are element of
decision making process:
Decision tree: this is graphical representation of possible solution, it based on certain
conditions on each level of its structure. Its start with single box, further it branches
into many different solutions to same problem. It’s brainstorming activity and best
part of it is, its alternative already defined in its system. This tree used to solve the
complex problems too and its outcome is the matter of analysis at each phase of
decision tree on each branch.
Choice node: decision always form alternative solution to defined problem and
choice node is nothing but the alternate option available for the selection on each
branch. This node giving chance to have branches further to solve issue with best
possible choices.
Change node: decision tree fragmented in separate mode and may have more than
two branches. Choice node has limitation of branched of two or three, change node
may increase based on the alternative reach to its final selection of decision tree.
Decision table: this tool based on testing and management requirement. it has
complex rules and based on logical concept of its structure. Decision table based on
rule of have a condition and alternatives to condition, actions and action entries these
four quadrants are structure of decision table.(Table 3.4)

51
 Condition Condition alternatives

Actions Action entries

Table 3.4 Decision Table Structure

Source: “MIS –Digital firm Perspective” 4th Edition By W. Jawadekar.

Decision matrix: it based on evaluation process, matrix table create where all option
in first column and factors which are affecting in first raw. User mark the score and
final score is tallied and reveal which option is the best.
T chart: When its need to evaluate positive or negative and consider one option to
take decision t-chart used. Its uses for +, - options.
Multi-voting: multiple people present to vote on particular decision called multi-
voting technique of decision making model. It also shapes from large to down scale
depending on it final decision.
Conjoin analysis: it’s used by executives to determine the customer preferences and
choice while decision making process.
Cost benefit: it’s more based on economic view which alternatives evaluate on the
basis of possible alternatives which is based on economic view.
Pareto analysis: this used for large amount of decision need to be sorted and it based
on priority of impact after implication.
Queuing theory: it is form of waiting because of certain situations. It is mainly
concern of economical concern, where balance maintains in two elements service and
customer. It’s nothing but waiting for certain service for specific reason to compete to
reach at final decision. Decision analysis by analytical modeling:
Decision analyzed by different model will process to solve problem in analytical way
following are the subtype of decision analysis.
 Goal seek analysis
 Sensitivity analysis
 What if analysis
Other tools analysis techniques of IS use for decision making:
 Case tool
 Requirement analysis

52
  Analysis and design tool
 Programming tool
 Interface design tool
 Business analysis tool
These are the different type of analysis tools and techniques or decision making
model use to extract the output. And achieve advantage of these tools essentially
delivered the service of decision making process. Few tools give more transparency in
their analytical view and get proper attention in the development of information
system in a structured manner to enlarge the scope. Decisions making concepts is
complex process and influence the selection criteria. Decision making process is the
rational decision but it has certain barriers in decision making and following are the
barriers which influence the decision:
 Lack of knowledge
 Less time used to analysis
 Unsupportive environment
 Understand the right problem of organization
 Resources unavailability
 Lack of communication
 Inappropriate values of the people
 Unethical practices
 Poor quality information
 Dispute between managers and subordinates
 Long process of approval
 Factors of improper information system
 Inter-relationship among expert for own interest
 Poor quality communication medium
These are the aspect of decision making process which mainly influenced the
selection process. Where management need to be alert and correct the element for
right decision making process. The decision maker has rights and authority over the
resources to distribute in different sources of management process to derived
particular decision. Decision change its concept on the changing level of
management structure to be used but its ultimate goal is to fulfill the need of
organization and complete the task which assigned and followed with decision

53
implementation. Decision is the output of selection of choices, use of intelligence and
design. In many organization top management overview the report of employee and
observe it for job performance evaluation to take particular measure related to
employees of organization and its right way to give justice and right performance
reward to the employees. Decision support system plays an important role, it gives the
reports of daily attendance, monthly attendance and sick leave reports and evaluates
the employee job involvement and decide the further measure to follow to them in
respect the decision taken in respect of the employee. Reports needs to overview by
the top management. As it has advantage to use such report through MIS system:
 Employee attendance data
 Employee individual data of joining details
 Increased security concern
 Searching for specific reports
 Centralized control system
 Developed system is online
 Economically relevant
 Security level
 Monitoring on process flow
These and many other and important process to observe and monitor the log
system will give the employee login time and time evaluate through the work he or
she completed on particular period of time, manager will cross check this activity and
time report for evaluation purpose to take decision. Decision support system run on
inter depended element and try to find the desirable decision to implement within
organization. Decision support system components are model, interface, and database.
Data integrity maintained in information system and even in decision making process.
Model system defined in abstract presentation. It explain the inter relationship with
many phenomenon. Various kind of model as below:
 Behavioral model
 Management science model
 Operation research model
 Physical model
 Mathematical model
 Verbal model

54
  Object oriented model
 Experimental model
Model focused on various sources of element. Management science model is
based on scientific study from various sources combination use principle value in to
the process and explain the functional department activity through the model.
Operation research model mainly process on mathematical and statistical formula.
Linear programming, ABC analysis, algebraic equations, model which use for
material requirement planning. Model includes financial system, cost accounting
system, and budgetary system. Model of decision support system are the specific
decision. It has user interface source of technology and communication system all
over the world for business process. Network connectivity is the real time and
important connection which is the interface to user over the internet to communicate
with application software support system. And database which is the storage place of
information system. It is known as central repository system. Database has functional
information system and evaluate the processing as per the model and pattern decided
to use for decision making process. Following are the features of database
 It is centralized storage location
 It has protected with high security practices
 It is entity relational database
 It is based on client server commutation and web based communication
 Fundamental storage of all departments in one place but logically separated.
 Application system developed independent of the database
 Data validation and updating will be same for all
 It maintain data in schema and subschema system
 Data share by all user
 Data security managed
 Database is storage of structured information
 Created on the basis of logical use of database
 Language used DDL Data description language & DML data manipulation
language
 Database is consist of entities, attributes and relationship

55
Barriers of database as follows:
 The data redundancy and inconsistency
 Difficulty in access to the data
 Concurrent access
 Security problem
 It is difficult to maintain integrity of data
Above point of database barrier are the obstacles of database system. Data redundant
and inconsistent, due to changes not incorporated simultaneously in all files. In
conventional format structure is consistent to specific information needs. This is
difficult and time consuming to change in files or revised with necessary application.
It has limitation of controlling the access to records causing insecurity with respect to
the information. These are the disadvantage of data processing system which has
many concerns like security concern, redundancy concern, updating concern.
Information obtained by developing system and integrating them. Creating its
subsystem and developing information system independently. It affects the quality of
file system as it need different time to update and change in existing files of database.
Database model based on entity relationships are simple tabular form. No
procedural language used in the structure. High degree of independence maintained. It
is based on normalization theory design. Following are the few more features of
database system.
 Simplicity
 Non procedural request,
 Data independence
 Theoretical foundation
Decision making process is important element and output from overall processing and
database system. Database is centralized information system of organization and
whatever file save here will review in future for decision making process. All the
information systems are maintained through the various database systems in data mart
where Management Information System development process model which is the
combination of hardware and software and advance technology. MIS give certain
advantage and features to be successful information system as its supports to decision
making system:
 MIS is object oriented study

56
  MIS is oriented, defined and designed in respect for user
 MIS is easy to Operate
 MIS is user friendly
 MIS is focus on result and goal
 The MIS is integrated into managerial functions
 MIS Supports to manage CSF critical success factor
 MIS provides adequate resourceful information to proceed
 MIS is continuous ongoing system of communication
 MIS ensures operational viability
 MIS Focus on major issues of the business
 MIS remove the obstacles of human and organizational barriers to success
 MIS never allowed to end up with disturbance in information system
 MIS is reporting system of readily available data use to solve the issue
 MIS potential capacity to quickly meet new needs of information
 MIS Concentrate on developing the information support
MIS features gives success to the organization through right decision making process.
There are three main types of electronic commerce which all are mainly existed for
commercial transaction. It means buying and selling activity online. It has three types
of e-commerce business:
 B2B Business to Business Electronic Commerce
 B2C Business to Consumer Electronic Commerce
 C2C Consumer to Consumer Electronic Commerce

57