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MBM- 303

MANAGEMENT INFORMATION

SYSTEM

PREPARED BY:

JYOTI VERMA

P.MRUDULA

NISHIMA GUPTA

PARNITA JAIN

SONAL MIDHA

TANYA CHAUDHARY

VARUN GREWAL

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QUESTION 1. How important a role did information system play at DataTec??

SOLUTION. Information systems are very important in all Organizations but Data Tec was

focused on customers and not the technology.

There were various problems which company faced when they are not using the information

system.

PROBLEMS

1. Data Tec was not giving real attention to information systems for its own internal

processes.

2. The focus of Data Tec was on its customers, Christopher Carey, the owner of the

company was busy in spending most of his time on the road, the use of informationsystems were ignored completely until any need was felt.

3. The staff ran customer, invoice, job assignment and inventory system, among others,on

computers which were installed in the company, that means information systems played a

role but Data Tec was not completely making use of it until problems arised.

4. There was no corporate computer planning done for the company. As a result DataTec

found itself with a real hodgepodge of computers and software with little or no

coordination and all of them unable to talk to one other. Much of the work that could

have been auto mated was still being done by pencil and paper which leaded to wastage

of time.

5. The work crew assignment errors often resulted in fully one sixth of the companys 200

crew being sent to the wrong place, which is a big blunder and may lead to customer loss

and eventually a loss for the company. Their was no up to date warehouse data, because

of lack of information systems.

6. Job costing took up to two months which meant that in many cases the company did not

know what its cost projections were until the work completed. In other words, data Tec

did not know whether or not a job was profitable until weeks too late. Invoicing took

from ten days to two weeks, compared with the norm of same day invoicing. Fifteen

percent of its invoices were sent out with errors as compared to the norms of less than 1

present. This was all because of lack of information systems.

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ROLE OF INFORMATION SYSTEM

1. They used a spreadsheet that had been sitting unused on a computer to cross- referencetheir customer and inventoryinformation.

2. The time needed to produce invoices, financial statements, and other documents fellsharply. For example, job costing fell to less than two weeks.

3. To generate reports-for example, financial statements, inventory status reports, orperformance reports needed for routine or non-routine purposes.

4. It Facilitates planning: information system improves the quality of plants by providingrelevant information for sound decision making. Due to increase in the size and

complexity of organizations, managers have lost personal contact with the scene of

operations.

5. In Minimizes information overload: information system change the larger amount ofdata in to summarized form and there by avoids the confusion which may arise when

managers are flooded with detailed facts.

6. Information system Encourages Decentralization: Decentralization of authority ispossibly when there is a system for monitoring operations at lower levels. Information

system is successfully used for measuring performance and making necessary change in

the organizational plans and procedures.

7. It brings Co ordination: information system facilities integration of specialized activitiesby keeping each department aware of the problem and requirements of other departments.

It connects all decision centers in the organization.

8. It makes control easier: information system serves as a link between managerial planningand control. It improves the ability of management to evaluate and improve performance.

The used computers has increased the data processing and storage capabilities and

reduced the cost

9. Information system stores, Retrieves, evaluates and disseminates the information.

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QUESTION 2. DataTec Information systems are used by many people at different locations

who need different kinds of information. What kind of organizational decisions and functions do

the systems support? You may find it helpful to organize your answer in tabular form.

Organizational Level

Function

Decision

SOLUTION:

ORGANIZATIONAL

LEVEL

FUNCTIONS DECISIONS

TOP LEVEL

MANAGEMENT

Planning, Organizing, Directing, Staffing,

Monitoring

Planning: Deciding what

needs to happen in the

future.

Organizing: Making

optimum use of the resources

required to enable the

successful carrying out of

plans.

Staffing: Staffing peoplewho have proper knowledge

of networks and computers

Leading/Directing:

Determining what needs to

be done in a situation and

getting people to do it.

Controlling/Monitoring:

Checking progress against

plans.

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MIDDLE LEVEL

MANGEMENT

1. Maintaining customer database

2. Job assignments and managing

inventory systems

3. Checking the profitability of a job

in advance and its cost

projections.

4. Sending customer invoices

without error.

5. Information systems will save the

time of employees and the time

can be utilized in productive

activities and growing up

business more speedily

6. Customer satisfaction level.

Financial Decisions:

yFinancial statements

yBilling

yCost projections

yBudget

yProfitability

yCash flow statements

Office Decisions:

Concerned about planning,

control, and co-ordination of the

office activities in the enterprise.

Its activities are very important

for an enterprise, as it guides the

personnel in the use of material,

methods, machines, etc., to

achieve the objectives.

LOWER LEVELMANAGEMENT

1.

Billing system.2. Collecting accounts receivable.

3. Work order processing.

4. Proper network connection

between each office and

headquarters.

y How to connect between

different offices in order

share information?

y What kind of billing

system should be

introduced?

y How to work out the

order processing

activities in theorganization?

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QUESTION 3-Why do you think the company did not pay more attention to its computer

system? How harmful was this lack of attention? Categorize their problem as management,

organization and technology problems and explain your reasoning.

Answer-Company did not pay more attention to its computer system because

y Company was comfortable in traditional way of doing business (like manual approach).

y Company had never realized that such kind of technology can improve the efficiency and

profit of business.

y At the initial cost was also a major factor to adopt that technology.

How harmful was this lack of attention

Company had faced many problems and difficulties for not giving attention to computer system

y Delay in work- every work took lot of time because of manual problem.

y Customer satisfaction was decreased because they were not satisfied with billing system

of the company.

y Work load was more on employees due to manual system .they have to work 12 hours a

day just to keep up with their growing business.

y Facility of networking was not available.

y Customer information was very difficult to obtain.

y Delay in collecting its accounts receivable.

y Data stored in computers around the world was isolated because these computers were

not connected.

PROBLEMS RELATES TO PROBLEM

MANAGEMENTy

Delay in work (due to manual system).y Billing problem which reduced

customer satisfaction.

y Work load was more on employees due

to manual system

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ORGANIZATION y Not going for technology.

y No connectivity with other system.

y Delay in collecting accounts receivable.

TECHNOLOGY Data stored in computers around the world was

isolated because these computers were not

connected.

QUESTION 4: What are the costs and effects of not embracing this technology? Are there

benefits to companies like DataTec continuing their work in a traditional way?

SOLUTION: DataTec Industries Inc. of Fairfield, New Jersey, was a company selling high-tech

services to customers. Within a span of 15 years they were able to raise their revenues

accounting from $5, 00,000 to $31 million. Their ideology of success did not lay any credit to the

information system, i.e. the owner of the company Christopher Carey was of the mindset that

there was no need to focus on the systems rather he used to stress on saying that why do we

need them.

There was no benefits driven out of the company like DataTec working in the traditional pattern,

rather there were high number of demerits which were being incurred as a result, the cost and

effects of not embracing this technology was as follows:

There was a scenario of complete chaos and big time hodgepodge in the company as

there was no corporate computer planning.

The time which could have been used in some other constructive development of the

company by way of automation was merely wasted in pen and paper work

The workers of more than one-sixth of the total crew were often assigned wrong places

moreover it used to take weeks to decide that whether a job would turn to be profitable in

the future which at times used to be too late

There was abundance of the stock in the warehouse which used to cost unnecessary

purchase of stock causing huge wastage of money

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Other important job assignments of the company which should have been completed on

daily basis were found lagging for months and therefore even the cost projections used to

fade

Major fault was found out in the invoicing- as compared to the norms of 1% , 15% of

their invoices were sent out because of errors

There was high impact on the reputation of the company which was gradually coming at

stake

No proper networking to connect to the customers , various sites and all the information

was scattered making it almost inaccessible for the company to retrieve data

There was a major problem arising out of the billing issues that was a major client of

their company walked away stating that the company was not able to align all the tasks

and customers to the satisfaction level

Once they applied some software technology, they realized that company was not able to

retrieve the accounts receivables on time which was a major setback for a company to

bear

Finally the end result of these problems sub routed into another major problem that stated

the problem of connectivity among all his computer system far and near.

QUESTION 5.How important are information system in solving the problem of companies

like Data Tec? What are some problems that technology cannot address?

SOLUTIONS - Computer-based Information System- Information System is an organized

combination of people, hardware, software, communication networks and the data resources that

collects, transforms and disseminates information in a organization

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Computer-based or manual system that transforms data into information useful in the support of

decision making. MIS can be classified as performing three functions:

1. To generate reports-for example, financial statements, inventory status reports, or

performance reports needed for routine or non-routine purposes.

2. To answer what-if questions asked by management. For example, questions such as

"What would happen to cash flow if the company changes its credit term for its

customers?" can be answered by MIS. This type of MIS can be called Simulation.

3. To support decision making. This type of MIS is appropriately called Decision Support

System (DSS). DSS attempts to integrate the decision maker, the data base, and the

quantitative models being used.

4. Committing less errors

5. Managing proper database and inventory system

6. Helps in calculation of cost projections and budgets

7. Calculation of profitability is possible

8. Networking

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PROBLEMS

y The technology should be fairly easy to implement- If the chance of actually realizing

positive results from the technology is small, the project should be avoided. If the chance of

success is small or uncertain, the project will probably fail.

y Success should be quick- Company should be able to see positive results in a short time

after the technology is implemented. This is criteria number ones twin brother. If neither of

them is present in an opportunity, the chance of success decreases exponentially.

y Provides long-term sustained results- For a technology project to be a wise investment, it

should provide sustainable benefits. There may be exceptions to this rule, but generally if you

are going to invest the time, energy and money into the technologys development it should

get results both now and into the foreseeable future.y Technology cannot solve all the problems

y Cannot replace humans and its mind.

y Technology cannot be always 100% reliable.

y Human feelings and emotions cannot be felt by technology.