CHAPTER 4TH Business Information System ALL 16 MARKS COVERS IN THESE NOTES
Business Information System
Various Information System Tools:-
1. TPS – (Transaction Processing System)
(A)Defination:- A Transaction processing system
(TPS) is a type of information system that collects, stores, modifies, retrives
the day to day transaction of an enterprise.
i.
It is developed for bottom level.
ii.
It demands information in details.
iii.
Example of TPS- ATM, system used in Airline
reservation
(B) Processing cycle of a typical TPS
i)
Data Entry:- Input
ii)
Processing transaction:- Process
iii)
Database Maintenance:- Storage
iv)
Document & Report:- Output
(C) Characteristics of TPS
i.
H :- High Volume rapid processing
ii.
E :- Equivalance
iii.
A :- Access Control
iv.
T :- Trustworthiness
i. High Volume rapid processing –
In most of the TPS the transaction are instantaneous processing. E.g.
Flipkart provide access to thousands of users at a time.
ii. Equivalance –
It
means the Transaction are processed in the similar format every time to ensure
that full effectiveness is achieved.
iii. Access Control – (control sirf authorize person person k pas hota hai)
Access Control ensure that people who are not authorized to use the
system are not permissible.
iv. Trustworthiness – (accuracy & completeness)
Means the system is
capable to process the transaction very rapidly yet at the same time conduct
several check to make certainty that the data is accurate &
completeness. ATPS system
is designed to be robust & trustworthy.
(D) Pre-requisites of ACID-Test of any TPS
i.
A:- Automatic
ii.
C:- Consistency
iii.
I:- Isolation
iv.
D:- Durability
i. Automicity :- (transaction ho to puri ho , varna na ho)
It means a transaction is either completed in full or not at all. It ensures
transaction take place in their entirety.
E.g. If fund transfer from one A/c to other A/c this only
counts as bonafide transaction if both the withdrawal & deposit take place.
ii. Consistency :- (kaam 1 limit k under rah kar kiya jaye)
TPS
system exist within set of operating
rules.
E.g. If integrity states that transaction is in data base
must have positive value. Any transaction of negative value would be refused.
Balance – 10000
Refund - 12000 NOT
ALLOWED
iii. Isolation :- ( transation immediately update ho , time gap na ho)
Transaction must appear to take place in seclusion. If fund
transfer from one A/c to other A/c than debit of one & credit of other simulatanously. Fund can’t be
credited to an A/c before debited from another.
iv. Durability :- (LOG hona chahiye,as a proof)
Once transaction are completed they cannot be undone. Even if TPS failure
a log will be created to document the complete transaction.
2. OAS – Office Automation System
i. Defination:-
OAS is amalgamation of hardware, software & other resources used in
the office to perform day to day office work smoothly & efficiently, such
as word processing , accounting.
Example – M/S
Word:- Word processing
M/S Excel:- Spreadsheet
PowerPoint:- Presentation
Outlook:- Email
Imaging, Voicemail, Video Conferencing, Fax.
ii. Function of OAS:-
1.
Exchange Information
2.
Management of administrative document
3.
Handling of numeric data
4.
Meeting, Planning & management of work
schedule
3. EIS:- Executive Information System
i. Defination:-
It is a decision support system used to take decision. The system is
developed for Top Level & it provide the data of all the branches & all
the deptt. It provide the data in Graphic form, & data is stored on cloud,
which helps in online analysis & data is shown in summarized form &
facility of drill-down is available. Thus it will improve the quality of
decision making.
ii. Components of EIS:-
1.
Hardware- Include Input data entry device, CPU,
Data storage & Output
2.
Software- Include Text based software, Graphic
type database, Pie-chart, Bar-chart, Maps.
3.
User Interface- By which people interact with
machine. E.g. screen
4.
Telecommunication- Transmitting data from one
place to other in reliable network system.
4. MIS:- Management Informational System
i. Defination:-
MIS is an integrated, user machine system for providing information to
support operation, mgmt. & decision making function in an organization.
·
MIS is an extension of TPS
·
No TPS = No MIS
·
Developed for middle & Top level
·
It provide analytical report to provide the
improve in decision making.
·
It provides 4 different type of report
i.
Exceptional report
ii.
On demand report
iii.
Schedule report
iv.
Key-indicator report
Example of MIS:- Airline Reservation, Bank operation, Make my trip.
5. CBS:- Core Banking System
C – Centralize
O - Online
R - Real-time
E – Environment
When CORE Banking was not there data a particulars branch
was stored on that particular Branch itself.
That’s why id A/c Holder deposits his fund in XYZ Bank of
Pune, he will not be able to withdraw other Branch of Xyz Bank. But in CORE
Banking concept data of any branch is located on the common server that’s why
though I deposit in Pune, I can withdraw from any branch of Xyz bank, Any ATM
of XYZ.
More ever funds can be withdraw from any bank PNB, SBI,
ICICI etc.
Now a days most banks use CORE Banking applications.
·
CORE Banking system are the heart of Bank
·
Bank’s Branches can access applications from
centralized data centers.
·
The system running 24x7 to support internet
banking Global operation, internet phone & debit card
·
Computer software is developed to perform core-operation
of banking like recording of transaction, passbook maintenance & int.
calculation on loan & deposits, customer record, bal. of payment &
withdrawal.
·
Elements
of CORE Banking Include –
Ø
Opening A/c – Cash deposits – Cash withdrawal –
Cheque processing – calculating interest – calculation of No. of times ATM used
– fund t/f – Managing Customer A/c’s – Security Controls – software
·
Infosys
& Financle –
With
360 degree single source view into customer A/c, bank can empower customer with
relevant information & delight them right offering presented at a time
through right channel.
·
Key
Modules of Financle –
-
Customer - Corporate banking
-
Trade Finance - Customer Analytic
-
Islamic Banking - Payments
-
Origination - Dashboard
-
Nucleus.
6. AIS – Accounting Information System
Defination –
AIS
is a system of collection, storage, processing of information & Accounting
data used in decision maker.
·
An accounting information is computer based
method for tracking accounting activity with Information Technology resources.
·
It result statistical report can be used
internally by management or externally by other interested parties like
investor, creditor.
·
Due to AIS we just have to enter journal entry,
posting, summarizing, sorting, managed by system automatically.
·
AIS Tally is more reliable, accurate, complete,
faster, efficient, than human being.
Components:-
1. People 2. Procedure & Instruction 3. Data
4. Software 5. Internal Control
6. Informational Technology
infrastructure.
1. People – Person who use the system.
2. Procedure -- Whether manual or automated
method for collecting, sorting, retrieving & processing data.
3.
Software – Computer program provide quality, reliability & security
to the Co.’s financial data.
4. Data
– Which can be used for preparing statement, reports, trial balance, P&L,
B/S.
5.
Information Technology Infrastructure – Computer, printer, router,
storage media.
6.
Internal Control – Password or as identification to protect sensitive
data against unauthorize access.
7. CRM:- Customer Relationship Management
The main objective is to retain as much loyal customer as one can &
this has led to emergence of CRM.
· Defination:-
It
means analysis of customer data to gain deep understanding down to the level of
Individual customer. Relationship mgmt. interaction with the customer. The
various channel for various purpose.
· Benefits of CRM :-
It integrates people, process, system.
Take action – Talks about policy
& procedure.
Analyze – Customer base profit ability
Discover – Trends etc.
8. SCM:- Supply Chain Management
Because of competition it is very important to deliver goods on time, if
goods are not deliver on time customer may find another supplier, that’s why
software of SCM is used where as soon as order is placed it is informed to the
concerned parties like logistics, HR, Production, Finance, Inventory, etc.
If every informed on time everybody work on time & user
will receive goods on time.
· Defination:-
Supply chain can be understood as a chain of activities involving
various organization to get a good or service from supplier to customer or
consumer or consumer.
It is the active mgmt. of supply chain activities to
maximize customer value & achieve a sustainable competitive advantage.
· Components of SCM:-
1. Procurement purchasing – It is the process of purchasing
RM from supplier
2. Operations – By performing operation Input is converted
into output.
3. Distribution – It refers to distribution of goods to
dealers.
4. Integration – It refers to Integration of various supply
chain participates to establish proper
communication
& co-ordinate to maximize value delivery.
9. DSS:- Decision Support System
· Defination:-
A computer based information system that support in decision
making activities in an organization. It is first introduced in 1970’s. DSS can be either fully computerized, human
or a combination of both. DSS serve the management operation & planning
level of an organization & help to make decision which may be rapidly
changing & not easily specified in adv.
Phases of DSS:- 1.
Intelligence
2. Design
3. Choice
4. Implementation
1.
Intelligence- It refers to searching for
conditions that call for decision.
2.
Design- This phase involve inventing developing
& analyzing possible alternative action of solution.
3.
Choice – In this phase a course of action is
selected among various alternatives.
4.
Implementation – It involves adopting the
selected course of action in decision situations.
· Components of DSS:-
1.
The User
2.
One or more database
3.
Planning language
4.
Model base
1. The User – User is usually a manager with an unstructured
or semi structured problem to solve.
2. One or more database – It contain routine & non
routine data from both internal & external sources.
3. Planning language – Language can be either general
purpose or special purpose allow users to perform daily/special tasks.
4. Model-base – It is brain of DSS as it performs data
manipulations & computations with data provided to it by the user &
database.
· Benefits of DSS/ How DSS helps
i.
Engender data model & what if scenarios.
ii.
Manipulate data directly.
iii.
Premeditated to make non-routine decision.
iv.
Slot in data from external sources.
10. KMS: - Knowledge Management System
Defination:-
KMS is about making the right Knowledge available to the right people.
It is about making sure that organization
can learn & that will be able to retrieve & use its knowledge asset in
current applications as they are needed.
Types of Knowledge:-
i.
Explicit Knowledge - Top mgmt.
ii.
Tacit Knowledge -
Middle mgmt.
iii.
Operational Knowledge – Lower mgmt.
Importance of Knowledge –
1. Planning - Knowledge like customer information, market
trend are key ingredient of planning.
2. Decision Making - Knowledge become basis of decision making in
an organization.
3. Performance – Knowledge
like profit, sales etc. performance of organization can be measured.
4. Controlling – We
can apply filter on knowledge so that only strategically important information
reaches top level.
Why Knowledge/Reason behind importance of Knowledge-
1. Rapidly changing
business environment – As business environment changing rapidly & what
is important today gets absolute tomorrow so organization needs to update
itself on regular basis.
2. Globalization – Increase
globalization competition is increase & competitor are having better
knowledge so to survive & grow it essential to have new set of knowledge.
3. Modification in
organizational composition – Organization structure is getting virtual due
to application of technology which require knowledge.
Explicit Knowledge
Tacit Knowledge
1. It is ceded knowledge
-
It can’t be ceded
2. It is stored in written form/computer system - It can’t
be stored
3. It can be delegated to anyone easily - It is rooted in some context
&
- associated
with experience &
-
difficult to transfer.
- It is more
advantageous strategically.
11. HRMS :- Human Resource Management System
Defination:-
It is a package software used to perform various HR activities such as
Recruitment, Training, Time & Attendance Management, Payroll Management and
Compensation Management.
Key Models of HRMS
1. Recruitment mgmt. 2.
Training mgmt.
3. Compensation mgmt. 4.
Personnel mgmt.
5. Payroll mgmt.
6. Employee Self Service
7. Analytics
8. Time & Attendance mgmt.
9. Workforce mgmt.
·
It is interaction between Human resource
information & IT.
·
It provide powerful tools to effectively manage
labour rules, controls & exp.
12. ERP – Enterprise Resource Planning
·
ERP is a process by which an organization
integrates & manages it’s important function & activities.
·
It integrates various function like planning,
purchasing, inventory sales, finance, human resource etc.
·
It is a complete software solution package for
enhancing the performance in large organization.
Steps to ERP-
1. Inventory Control –
Supervision of supply, storage, accessibility of item to make sufficient
supply.
2. ABC analysis –
Rates item from A to C
A- Goods
which annual consumption is highest approx. 70% -- 80%
B- Annual
consumption 10% -- 20%
C- Lowest
consumption value approx. 5%
3. Economic Order Qty. (EOQ) –
Level of inventory ordered each time the inventory level reaches
Reorder point optical order qty.
4. Just In Time (JIT) –
JIT is a continuous
improvement in which non value adding activities are defined.
--Reducing cost, improving quality, improving performance, improving
delivery.
5. Material Requirement Planning (MRP-I)-
It is a production planning & inventory control system used to
manage manufacturing process.
6. Manufacturing Resource Planning (MRP-II) –
Method of planning of all
resource of manufacturing co.
7. Distribution Resource Planning (DRP) –
·
DRP enable the user to set certain inventory control.
·
To improve customer services levels by their
demand.
·
Accurate planning for manufacturing.
8. Enterprise Resource Planning (ERP) –
It take customer order & provide a software for automating
Dissimilar stages.
9. Money Resource Planning (MRP-III) –
Planning of capital or managing situation when surplus money arise.
10. EIS Web Enabled –
Web based
technologies are causing to exist IT implementation models, including
EIS. Final
step in this direction.
13. AI – Artificial Intelligence :-
Defination –
It is the science
& engineering of making Intelligent Machine, especially Intelligent
Computer Program. It related to similar task of using computer to understand
human intelligence.
Application of Artificial Intelligence –
1. Decision support
2. Information retrieval
3. Virtual reality 4. Robotics
5. Neutral Network
6. Expert System
14. Expert System –
·
Expert System is a computerized information
system that allow Non expert to make decision comparable of those of an expert.
·
It is used to complex & it require
experience specialized knowledge in narrow specific subject areas.
·
Expert System has its strength to plan &
execute a mislaneous variety of project for Defense, Government, finance,
Telecom, Engineering sector.
e.g. Auto Car, Auto drive, Auto Marketing
Components of Expert System –
1. Acquisition facility – It is used to acquire knowledge of expert
& storing data into knowledge.
2. Knowledge Base – It stores data
information, knowledge routine data, non-routine data, Internal & external
sources rules, advices examples, frames etc. It is the place where knowledge stored.
3. Inference Engine –
It perform logical inference to get solution to user problem. It is brain of system.
4. User Interface – It
is combination of Hardware & software used by user to interact with
customer. E.g. computer.
5. Explanation
Facility – It explain the logic used by Expert system to arrive some
conclusion.
6. Database of Facts
– It refers to data provided by user to system.
Types of Expert System -
1. Example Based – In this cases &
related information are stored on getting some case from user to Inference engine
matches case in hand with cases stored & provide solution to user
accordingly.
2. Rule Based –
·
In this solution is given to user on the basis
of then rule stored.
·
On getting some condition the inference Engine
apply if then rules to get solution to user.
3. Frame Based – In
this cases & facts are stored in logical unit called as frames. Rules are
apply to re-arrange frames to get solution to user.
15. BI – Business Intelligence
It is the process of gathering information
of & about business from various Internal external sources & presenting
it in a useful format & making it available for decision making when
required.
Tools of Business Intelligence –
1. Simple reporting
& query in question – To tell me what happened used to query the data
warehouse & generate report.
2. Business Analyze – It invoice analyze
of data to get answer of tell me what happened & why?
3. Dashboard – It
involve using the data from warehouse & making it available to user as a
snapshot on single screen with objective of getting answer to tell me a lot of
thing with making much efforts.
4. Score Card - Score card is used to prepare performance
matrices by taking information from data warehouse & mapping it with a goal
of enterprise. It is part of bal. sore card & used to set objective as well
as evaluate performance.
5. Data Mining &
Analysis – Data mining is first tool process of extracting pattern data
from data warehouse, which is further interrupted & evaluate to create or
Generate Knowledge.
Business Reporting through IT & MIS
Report – Report
is a document formatted & presented in graphical, tabular or in text form
prepared on periodical basis or ad-hoc basis & which provide information
some events or situation.
Benefits of Reporting through IT & MIS
Small business
Large business
- Reduce Cost
-
Reduce cost
- Electronic Record Keeping -
Electronic Record keeping
- Paperless Lodgement
- paperless lodgement
- AUSkey authentication - AUSkey authentication
- Same-time validation - Same-time validation
- Ease of Sharing
- Single Reporting language to report to Govt.
- Prefilled forms
- Increase access
16. Access & Privilege Access
Access Control-
Involves
applying various concepts tools & technique to protect system from any
unauthorized users.
It involves implementation of identity mgmt. authorization,
Authentication & Accountability.
1. Identity mgmt. –
Apply IC verify of a subject attempting to access an object.
2. Authentication – It is the process of
verifying a subject’s identity at the point of object access.
3. Authorization - Authorization identifies what system network
resource etc. a subject can access.
4. Accountability – The
logs are stored for Audit, sent to a log mgmt. solution etc. They provide
insight into how well the access control process is working whether or not
subject’s abuse their access.
Types of Access Control
1. Rule-based Access
Control- In this some rule/constraint are applied on Goal base control.
e.g. Accountant
role can’t access system between 2 p.m. to 5 p.m.
2. Role-based Access
Control – In this the system or
system administrator put user into some role called role based Access Control.
All user having same role will have same right &
permission.
e.g. Accountant role. Sales role etc.
Privilege Control –
This is a
fundamental principle of information security, which refers to give only those
privileges to a user accountant which are essential to that user’s work.
17. Payment Mechanism-
1.
Credit card
2.
Electronic Cheque
3.
Smart card
4.
Electronic Purse
1. Electronic Purse- It
is very similar to a prepaid card. Microchip is embedded provide multiple
option such as debit card or credit card payment. It has feature of both credit
& Debit card. It can be online as well as physical card.
2. Smart Card - These are embedded with microchip instead of
magnetic strip. The chip contain all the information a magnetic strip contains
but offers possibility o fmanuplating data & executing application on card.
Types of Smart card-
1. Contact card – It process contact card it
must be inserted into the card reader machine, e.g. ATM card.
2. Contact Less Card – To get processed waving
contact less card in-front of card reader is enough. E.g. Gate Opening Card.
3. Combi/Hybrid Card – It has features of both
contact card as well as contact less card.
3. Credit card –
It is payment card issue to user as system of payment. It allows the cardholder
to pay for goods & services based on the holder’s promise to pay for them.
PROCESSING of Credit card
1. Authorization 2. Batching
3. Clearing 4. Funding
4. Electronic Cheque
–
a)
By FSTC
(financial services Technology Corporation) –
FSTC is a consortium of banks and clearing houses that has designed an
Electronic Cheque. Modeled on the traditional paper Cheque, this new Cheque is
initiated electronically, and uses a digital signature for signing and
endorsing.
b)
By
CyberCash – The CyberCash Secure Payment System is a complete system for
conducting financial transaction on the Internet. It accepts both credit card
payments and cash/coin transactions.
18. Information/System/Information system/Levels/Authorization
Information – Only meaningful & useful data is called information.
Data – are the raw facts.
System – small components come together for achieving some common
persons.
Information System –
It
is the combination of people, hardware, software, communication devices,
network, & data resources that can storing, retrieving, transforming
information. Data & information for specific purpose.
1. Components of Information System –
a)
People, hardware, software, data are four basis resources
of Information System.
b)
Hardware involve – Machine & Media
Software consist programme & procedure
Data resource include data, Model,
Knowledge,
c)
All components of IS are mutually connected
& can’t exist individually.
2. Role of Information system in Business –
a)
Enhancing the effectiveness of information
system always result in better mgmt.
b)
More successful & competitive in the
marketplace.
c)
It provide existing & future customer Goods
& Services more promptly & cheaper their competitors.
d)
It appreciate how Information system process
data & facilitate of decision making.
3. Types of Information System –
1. Strategic Level System –
For strategic managers to
track & deal with strategic issues. Assisting long-range planning.
A principal area is tracking changes in the external
conditions (market sector, employment levels, share prices, etc.) and matching
these with the internal conditions of the organization.
Group used – Strategic Managers senior managers.
System – EIS, ESS
2. Tactical (Management) Level System –
For controlling, monitoring, decision-making & administrative
activities.
Group used – Middle managers
System – DSS, MIS
3. Knowledge Level System-
This system support discovery processing & storing of knowledge
& data workers.
Group used – Knowledge & Data Workers
System – OAS, KMS
4. Operational Level System –
Support
operational managers tracking elementary activities. Tracking customer order,
invoice tracking
Group used – Operational managers
System used TPS
4. Who uses Informational System –
1. Strategic Level –
Top
managers/senior managers like CEO,CFO
2. Management Level –
Below Top managers, First Level Managers for setting goals for their
deptt. & provide valuable information to top managers to help improve the
performance of an Org.
3. Knowledge Level –
Knowledge Level data & workers who are selected recruited & trained special managers. The Knowledge resides in the heads of Knowledge workers & these most previous resource.
4. Operational level –
Include Supervisors who are responsible for daily mgmt. they have a very
strong influence on the co. They don’t set goals for organization. These are
the managers that most employees (who actually produce the product or offer the
service) interact with on daily basis.
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