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Unit-1

Meaning of Information Management

Information management (IM) is the collection and management of information from one or more sources and the distribution of that information to one or more audiences.

This sometimes involves those who have a stake in, or a right to that information. Management means the organization of and control over the structure, processing and delivery of information.

Application of management techniques to collect information, communicate it within and outside the organization, and process it to enable managers to make quicker and better decisions

Management Information System

Meaning

It is an integrated man machine system Provides information To support the operations & decision making

MIS is an Information system which helps in providing the management of an organization with information which is used by management for decision making.

Definition:-

"An integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computerized and manual procedures; models for analysis, planning, control and decision making; and a database."

MIS is referred to as set of procedures that collects, processes, stores and disseminates information to support decision-making.

Management information systems are those systems that allow managers to make decisions for the successful operation of businesses.

Mrs.A.Padmapriya M.B.A., M.A., M.Phil.,UGC-NET/CCET

http://www.businessdictionary.com/definition/management.html

http://www.businessdictionary.com/definition/decision.html

http://www.businessdictionary.com/definition/manager.html

http://www.businessdictionary.com/definition/process.html

http://www.businessdictionary.com/definition/organization.html

http://www.businessdictionary.com/definition/information.html

http://www.businessdictionary.com/definition/technique.html

4 Components of MIS

1. Data gathering

Data pertinent to the operations of the organization are gathered from both internal and external sources.

2. Data Entry

The above data is inputted and stored in databases as the information processing core of the system.

3. Data transformation

Data is transformed into useful information through the application of computer software and judgments made by technical support staff and other system users.

4. Information Utilisation

This useful information is retrieved as needed by the management and technical personnel and applied to a wide variety of decisions related to the conduct of organizational operations.

MIS Evolution

1960 Electronic data processing (EDP), transaction processing systems (TPS) 1960s, another role was added to the use of computers: the processing of data into useful informative reports

1970s, Decision support systems (DSS) was born 1980 Executive information systems EIS

Expert systems Knowledge management systems

1990s Enterprise Resource Planning (ERP) systems. 1990s MIS to e-commerce

Data, Information, Knowledge and Intelligence

Data: Data means raw facts or data in context

Information: “Data processed for meaning is information “


Information is produced by assigning meaning to data relevant to mental objects.

Knowledge: “Knowledge is the subjective interpretation of Information” and approach to act upon in the mind of perceiver.

Intelligence : “Information processed for understanding is intelligence”.

Intelligence deals with all the things which should be known in advance of initiating a course of action

Intelligence or wisdom embodies awareness, insight, moral judgments, and principles to construct new knowledge and improve upon existing ones.

Following Bank example would illuminate the definitions:

- Data: The numbers 100 or 5, out of context

- Information: Principal amount of money: $100, Interest rate: 5%

- Knowledge: At the end of Year I get $105 back

- Intelligence: Concept of growth

Concept of MIS

Management

Management is usually defined as planning, organizing, directing, staffing and controlling the business operation. This definition, which evolved from the work of Henri Fayol in the early 1900s, defines what a manager does, but it is probably more appropriate to define what management is rather than what management does.

Jnformation


Information is what is used in the act of informing or the state of being informed. Information includes knowledge acquired by some means. It is processed data which in turn is collection of raw facts, observations and figures.

System

A system is a scientific method of inquiry, that is, observation, the formulation of an idea, the testing of that idea, and the application of the results. Data are facts and figures. However, data have no value until they are compiled into a system and can provide information for decision making.

Data versus Information

Data

Data refers to raw, unevaluated facts, figures, symbols, objects, events, etc. Data may be a collection of facts lying in storage, like a telephone directory or census records.

Information

Information is data that have been put into a meaningful and useful context and communicated to a recipient who uses it to make decisions. Information involves the communication and reception of intelligence or knowledge


Information is refined data

Input Process Output

Rawmaterial

Process Finished product

Information

ProcessData

Objectives of MIS

Managers play a key role in any organization. They are responsible for taking decisions appropriate to the need of the market. Information systems have become the main tool used by managers in decision making. Managers perceive information as the driving force to achieve success in any business.

Hence there is a need for MIS as:

Support of its business process and operations Support of decision making by its employees and managers Support of its strategies for competitive advantage-(Gaining a

strategic advantage )

Advantages of MIS (uses and Benefits)

Strategic Planning

Management Control

Operational Control

In all the levels the information is very essential.

1. MIS can be used in Problem solving process.

2. It facilitates Decision making.

3. MIS improves the quality of decision.

4. It facilitates planning:

MIS improves the quality of plants by providing relevant 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. Communicating information.

6. Improving the efficiency of operations.

7. Minimizing the duplication of efforts.

8. It makes control easier:


MIS serves as a link between managerial planning and 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. Time saving (with use of computer process)

10. It brings Co-ordination:

MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization

11. Job security (for IT persons)

12. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information

Functions of MIS1. Data capturing

MIS captures data from within and outside the organization and from internal and external sources of the organization. Data capturing may be manual or through computer terminals.

2. Store and processing of data

The captured data is processed to convert it into the required management information. Processing of data is done by such activities as calculating, comparing, sorting, classifying and summarizing.

3. Storage of information

MIS stores processed or unprocessed data for future use. Stored data is commonly organized into fields, records, files and databases.

4. Retrieval of information

MIS retrieves information from its stores as and when required by various users. As per the requirements of management users the retrieved information is distributed or processed again.

5. Dissemination of information


Information which is a finished product of MIS is disseminated to the users in the organization. The main function of MIS is to help the managers and the executives in the organization in decision making.

User

Source

Importance of MIS 1. MIS is always management oriented and keeps in view every level of management and gets the desired information.

2. Integrated - refers to how diff components (sub systems) are actually tied up together. eg: diff departments of organization linked together.

3. Useful for planning - as every organization makes log-term and short-term plans with the help of information like sales & production, capital investments, stocks etc management can easily plan.

4. Effective MIS helps the management to know deviations of actual performance from pre-set targets and control things.

5. It is important for increasing efficiency.

6. MIS provides updated results of various departments to management.

7. MIS is highly computerized so it provides accurate results .

8. MIS adds to the intelligence , alertness , awareness of managers by providing them information in the form of progress and review reports of an ongoing activity.

9. Helps managers in decision- making .

Characteristics of MISMrs.A.Padmapriya M.B.A., M.A., M.Phil.,UGC-NET/CCET

Data capture

Processing Dissemination

Storage of data

Retrieval

1. Management-oriented:

The designing of MIS take care of the managers who meet the information requirement. The development of the system starts after deciding the management needs and keeping in view the overall objectives of the management. The basic objective of MIS is to provide information support to the management in the organization for decision making

2. Management directed:

When MIS is management-oriented, it should be directed by the management because it is the management who tells their needs and requirements more effectively than anybody else. Manager should guide the MIS professionals not only at the stage of planning but also on development, review and implementation stages so that effective system should be the end product of the whole exercise in making an effective MIS.

3.Integrated:

It means a comprehensive or complete view of all the sub systems in the organization of a company. Development of information must be integrated so that all the operational and functional information sub systems should be worked together as a single entity. This integration is necessary because it leads to retrieval of more meaningful and useful information.

4. Common data flows:

The integration of different sub systems will lead to a common data flow which will further help in avoiding duplicity and redundancy in data collection, storage and processing. For example, the customer orders are the basis for many activities in an organization viz. billing, sales for cashing, etc. Data is collected by a system analyst from its original source only one time.

5. Heavy planning-element:

The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years and sometimes a much longer period. So the system expert has to keep 2 things in mind – one is that he has to keep future objectives as well as the firm’s information well in advance and also


he has to keep in mind that his MIS will not be obsolete before it gets into action.

6. Sub System concept:

When a problem is seen in 2 sub parts, then the better solution to the problem is possible. Although MIS is viewed as a single entity but for its effective use, it should be broken down in small parts or subsystems so that more attention and insight is paid to each sub system. While making or breaking down the whole MIS into subsystems, it should be kept in mind that the subsystems should be easily manageable.

7. Common database:

This is the basic feature of MIS to achieve the objective of using MIS in business organizations. It avoids duplication of files and storage which leads to reduction in costs. Common database means a “Super file or Master file” which consolidates and integrates data records formerly stored in many separate data files.

8. Computerized:

MIS can be used without a computer. But the use of computers increases the effectiveness and the efficiency of the system. The queries can be handled more quickly and efficiently with the computerized MIS. The other benefits are accuracy, storage capacity and timely information.

9. User friendly/Flexibility:

An MIS should be flexible i.e. there should be room for further modification because the MIS takes much time in preparation and our environment is dynamic in nature. MIS should be such that it should be used independently by the end user so that they do not depend on the experts.

10 .Information as a resource:

Information is the major ingredient of any MIS. So, an MIS should be treated as a resource and managed properly.

Disadvantages of MIS (Limitations)1. Unemployment –


While information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed.

2. Privacy

Though information technology may have made communication quicker, easier and more convenient, it has also bought along privacy issues. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming public knowledge.

3. Lack of job security

Industry experts believe that the internet has made job security a big issue as since technology keeps on changing with each day. This means that one has to be in a constant learning mode, if he or she wishes for their job to be secure.

4. Dominant culture

While information technology may have made the world a global village, it has also contributed to one culture dominating another weaker one. For example it is now argued that US influences how most young teenagers all over the world now act, dress and behave. Languages too have become overshadowed, with English becoming the primary mode of communication for business and everything else.

5. Constant monitoring:

MIS goes for constant monitoring to be effective. It takes more work and time of people to carry out this function.

6. High expenses:

It needs more money to develop and implement information system.

7. Require more time:

As already said that MIS is not an easiest task to complete in two or three days it takes more than one year to develop and install. So more and more time is required to implement MIS

8. Training is required

To run MIS effectively it needs highly trained people to operate the system.


9. Captures wrong or incomplete information:

As MIS accepts what the input is given there may be wrong and incomplete information

10. Training time for employees:

MIS needs trained people to operate. So training is to be given. It also wastes the time that are involved in training programme.

11. MIS takes only quantitative factors

MIS does not take the qualitative factors like employee morale, satisfaction level etc. It takes only quantitative factors.

12. Quality depends upon the input

Role of MIS(In decision making and in an organization)

Main role is to provide information for decision making

Great quantity of data is used in various ways

Gather, analyze and report data in day to day transactions

With use of computers it gives statements and reports to implement strategy

For DSS it applies what-if analysis

MIS not only provides information but also it saves valuable time by using computers

It facilitates faster decision making

It encourages MBO process

MIS also helps a company to become a market innovator

Also it gains competitive advantage by unique feature.( by the use of information)

MIS is important for all levels of organization.

Also it is essential for all the operations and functions of an organization


Information flow is continuous in all levels and operations

Hence MIS plays a vital role in an organization and also in decision making process. It can be simplified in general roles are,

Information Flow(in an manufacturing unit) :-

A management information system is a system that has important tools to support, analyze, deliver and add reliability to any organization. It ensures that appropriate data is collected from various sources, processed and sent to needy destinations. Also this helps to solve businesses problems. The term MIS is often used to submit to a group of information management methods tied to the support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.

Impact Of MIS:

MIS has a major impact on the functions of any organization. The organization derives benefits from the systems in the following form:a) speedy access to information,b) interpretation of data,c) quick decisions,d) speedy actions,e) increased productivity and thereby increase in the profitf) reduced transaction cost


Supports for business process

Supports for decision making

Supports for competitive advantage

Customer A/CPurchasing

Manufacturing

Mkg

DistributionR &

D

Inventory

Nature & Scope of MIS

1. Effective utilization of information technologies in organizational context.

2. Information systems applications in organisations such as transaction processing, routine data processing, decision support, office support, computer-integrated manufacturing, expert support, executive support and support for strategic advantage plus the coordination and interaction of such applications.

3. MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy.

4. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers.

5. MIS systems can also use these raw data to run simulations hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product.

6. Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce.

7. MBO is a process by which mangers and subordinates agree upon a series of objectives for subordinates to attempt to achieve within a set time frame. The aim of this objective is to provide a set of key performance indicators by which an enterprise can judge the performance of an employee or project.

Information System

Organized collections of hardware, software, policies, procedures & people which store, process & provide access to information system.

An information system can be defined technically as a set of interrelated component that collect (or retrieve), process, store, and


distribute information to support decision making and control in an organization.

The information system is a system of group of interrelated components working together towards a common goal by accepting inputs and producing outputs in an organized transformation process.

Definition of Information Technology:

The branch of engineering that deals with the use of computers and telecommunications to retrieve and store and transmit information

Information technology is the use of computers and networks to store, process, and receive data

Information technology, in simple terms, is concerned with all forms of tools, techniques, and technology applied for transmitting, storing, processing and disseminating information.

An IS Framework for Business Professionals

The figure illustrates a useful conceptual framework that outlines what a manager or business professional needs to know about information systems. It emphasizes five areas of knowledge:

•Foundation Concepts


Business applications

Information technologies

Foundation concepts

Management challenges

Development process

IS

This includes fundamental behavior, technical, business, and managerial concepts like system components and functions, or competitive strategies

•Information Technologies

It involves concepts, developments, or management issues regarding hardware, software, data management, networks, and other technologies

•Business Applications

It includes major uses of IT for business processes, operations, decision making, and strategic/competitive advantage.(production ,finance, marketing and HR)

•Development Processes

This includes how end users and IS specialists develop and implement business/IT solutions to problems and opportunities arising in business. (SDLC stages)

• Management Challenges

This includes how effectively and ethically manage the IS function and IT resources to achieve top performance and business value in support of the business strategies of the enterprise. (Biometric system, back up files, disaster recovery, security etc)Types of Information system(Establishing Framework)

Based On Functions and Hierarchy

(i) Based on Hierarchy

Two categories depending upon their focus on the kind of activities in a business enterprise

1. Operations Support Systems2. Management Support Systems


OperationsSupportSystems

Management SupportSystems

TransactionProcessing

Systems

ProcessControl

Systems

EnterpriseCollaboration

Systems

Management Information

Systems

DecisionSupportSystems

ExecutiveInformation

Systems

Information Systems

Operations Support Systems

- Focus on the operations of the enterprise- Objective is to improve the operational efficiency- Use internal data primarily- For lower level of managers

Classified into the following categories

a) Transaction Processing Systemb) Process Control Systemc) Enterprise Collaboration System

a) Transaction Processing Systems

• Process business exchanges• Maintain records about the exchanges• Handle routine, yet critical, tasks• Perform simple calculations

Transaction can be internal or external

Internal: occurring inside the organization

External: occurring outside the company, customer places an order from a company catalogue(online or real transaction processing and Batch processing)

b) Process Control System

Monitors & control physical process


c) Enterprise Collaboration Systems

- Enhance team and workgroup communication and productivity, and include applications that are sometimes called office automation system.

Management Support System

Management Support Systems provide information and support needed for effective decision making by managers

Classified into following categories

a) Management Information Systemb) Decision Support Systemc) Executive Support System

a.) Management Information System

Routine information for routine decisions Operational efficiency Use transaction data as main input Databases integrate MIS in different functional areas

- Offers summary and exception reports on the operations of the enterprise and are also called as operations support systems.

b) Decision Support System

- Gives direct computer support to managers during the decision making process.

- The users have full control of the system.

c) Executive information system

Provide critical information tailored to the information needs of executives

- Top managers do not have the time to study and analyze large volume of data. They need an IS that will analyze the data & present it in elegant manner so they can have quick & effective decisions.

- The system that delivers high level information in a friendly way is called EIS.


Other categories

Expert systems

Expert Systems are knowledge-based systems that provides expert advice and act as expert consultants to the users

Expert systems are computer programs that capture the knowledge of a human expert and use it to solve complex problems.

Knowledge management system

Used for managing knowledge in organization, supporting creation, capture, storage and dissemination of information

End user computing systems

End user computing systems support the direct, hands on use of computers by end users for operational and managerial applications

Business information systems

Business information systems support the operational and managerial applications of the basic business functions of a firm

Strategic information systems

Strategic information systems provide a firm which strategic products, services, and capabilities for competitive advantage

(ii) Based on Functions Functional Areas of Information System

MIS is an integrated collection of functional information systems, each supporting particular functional areas.


1. Marketing Information system

A Marketing Information System can be defined as 'a system in which marketing information is formally gathered, stored, analyzed and distributed to managers in accordance with their informational needs on regular basis Set of procedures and practices employed in analyzing and assessing marketing information, gathered continuously from sources inside and outside of a firm. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion. See also market information system .

Supports managerial activities in product development, distribution, pricing decisions, and promotional effectiveness

Interactive marketing:

– A customer-focused marketing process– Using the Internet, intranets, and extranets– To establish two-transactions– Between a company and its customers or potential

customers

Sales force automation

• Outfit sales force with notebook computers, web browsers and sales contract management software

• Connect them to marketing websites and company intranet

Target marketing


http://www.businessdictionary.com/definition/market-information-system.html

http://www.businessdictionary.com/definition/promotion.html

http://www.businessdictionary.com/definition/selection.html

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http://www.businessdictionary.com/definition/distribution.html

http://www.businessdictionary.com/definition/packaging.html

http://www.businessdictionary.com/definition/pricing.html

http://www.businessdictionary.com/definition/improvement.html

http://www.businessdictionary.com/definition/product-development.html

http://www.businessdictionary.com/definition/decision.html

http://www.businessdictionary.com/definition/provide.html

http://www.investorwords.com/1967/firm.html

http://www.businessdictionary.com/definition/source.html

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http://www.businessdictionary.com/definition/marketing.html

http://www.businessdictionary.com/definition/employed.html

http://www.businessdictionary.com/definition/practice.html

http://www.businessdictionary.com/definition/procedure.html

http://en.wikipedia.org/wiki/Management

• An advertising and promotion management concept that includes five targeting components

Marketing Information System

Sales by customer

Sales by salesperson

Sales by productOperationaldatabases

Databasesof valid

transactionsfor each

TPS

Transactionprocessing

systemsBusiness

transactionsMarketing

IS

Databases ofexternal data

Databases ofinternal data

MarketingDSS

MarketingES

Marketingapplicationsdatabases

Pricing report

Total service calls

Customer satisfaction

Inputs to Marketing MIS

Strategic plan and corporate policies The TPS External sources:– The competition– The marketMarketing MIS Subsystems and Outputs

Marketing research Product development Promotion and advertising


Product pricing

2. Manufacturing information system

• Support the production/operations function• Includes all activities concerned with planning and control of

producing goods or services

• Simplify production processes, product designs, and factory organization as a vital foundation to automation and integration

• Automate production processes and the business functions that support them with computers, machines, and robots

• Integrate all production and support processes using computer networks, cross-functional business software, and other information technologies

• Computer-aided manufacturing (CAM) - automate the production process

• Manufacturing execution systems (MES) – performance monitoring information systems for factory floor operations

• Process Control – control ongoing physical processes


• Machine Control – controls the actions of machines

Manufacturing Information System

Quality control reports

Process control reports

JIT reportsOperationaldatabases

Databasesof valid


TPS


systems

Businesstransactions


Internet orExtranet

ManufacturingIS




ManufacturingDSS

ManufacturingES

Manufacturingapplicationsdatabases

Customers,Suppliers

MRP reports

Production schedule

CAD output

Inputs to the Manufacturing MIS

Strategic plan or corporate policies.


The TPS:– Order processing– Inventory data– Receiving and inspecting data– Personnel data– Production process External sourcesManufacturing MIS Subsystems and Outputs

Design and engineering Master production scheduling Inventory control Manufacturing resource planning Just-in-time inventory and manufacturing Process control Computer-integrated manufacturing (CIM) Quality control and testing

3. Human Resource Information systems

Concerned with all of the activities related to employees and potential employees of the organization

• Recruiting employees using the corporate website and commercial recruiting services

• Posting messages in selected Internet newsgroups• Communicating with job applicants via e-mail

The Human Resource Information System (HRIS) is a software or online solution for the data entry, data tracking, and data information needs of the Human Resources, payroll, management, and accounting functions within a business. Normally packaged as a data base, hundreds of companies sell some form of HRIS and every HRIS has different capabilities. Pick your HRIS carefully based on the capabilities you need in your company.

• Process common HRM applications

• Allow HRM department to provide around-the-clock services

• Disseminate valuable information faster than through previous company channels

• Collect information from employees online


• Allow managers and other employees to perform HRM tasks with little intervention by the HRM department

Human Resource MIS


Human Resource Information System

Benefit reports

Salary surveys

Scheduling reportsOperationaldatabases

Databasesof valid


TPS


systemsBusiness

transactions

HumanResource

IS



HRDSS

HRES

Humanresource

applicationsdatabases

Training test scores

Job applicant profiles

Needs and planningreports

Inputs to the Human Resource MIS

Strategic plan or corporate policies The TPS:

– Payroll data– Order processing data– Personnel data

External sources

Human Resource MIS Subsystems and Outputs

Human resource planning Personnel selection and recruiting Training and skills inventory Scheduling and job placement Wage and salary administration

4. Accounting information system

• Record and report the flow of funds through an organization• Produce financial statements


• Forecasts of future conditions

Order Processing – Captures and processes customer orders and produces data for inventory control and accounts receivable

Inventory Control – Processes data reflecting changes in inventory and provides shipping and reorder information

Accounts Receivable – Records amounts owed by customers and produces customer invoices, monthly customer statements, and credit management reports

Accounts Payable – Records purchases from, amounts owed to, and payments to suppliers, and produces cash management reports

Payroll – Records employee work and compensation data and produces paychecks and other payroll documents and reports

General Ledger – Consolidates data from other accounting systems and produces the periodic financial statements and reports of the business

5. Financial management system

• Support business managers and professionals in decisions concerning

• The financing of a business

• The allocation and control of financial resources within a business

Provides financial information to all financial managers within an organization.


Financial Information System


Financial statements

Uses and managementof funds

Financial statisticsfor control

Operationaldatabases

Databasesof valid


TPS


systems



Internet orExtranet

FinancialIS




FinancialDSS

FinancialES

Financialapplicationsdatabases

Customers,Suppliers

Inputs to the Financial Information System

Strategic plan or corporate policies

– Contains major financial objectives and often projects financial needs.

Transaction processing system (TPS)

– Important financial information collected from almost every TPS - payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.

– External sources

– Annual reports and financial statements of competitors and general news items.

Financial MIS Subsystems and Outputs

Financial subsystems

– Profit/loss and cost systems– Auditing– Internal auditing– External auditing– Uses and management of funds


Components of an Information system

There are 5 types namely

1. People resources2. Hardware resources3. Software resources4. Data resources5. Network resources

(i) People Resources:

People are required for the operation of all information systems. These people resources include end users and are specialists.

•End Users (also called users or clients) are people who use an information system or the information it produces. Most of us are information system end users. And most end users in business are knowledge workers, that is, people who spend most of their time communicating and collaborating in teams of workgroups and creating, using, and distributing information.


•IS Specialists are people who develop and operate information systems. They include system analysts, software developers, system operators, and other managerial, technical, and clerical IS personnel.

(ii) Hardware Resources:

Hardware resources include all physical devices and materials used in information processing.

•Machines- Physical devices (computers, peripherals, telecommunications networks, etc.)•Media- All tangible objects on which data are recorded (paper, magnetic disks etc.)Examples of hardware in computer-based information systems are:•Computer Systems – Which consist of central processing units containing microprocessors, and a variety of interconnected peripheral devices.•Computer peripherals – Which are devices such as a keyboard or electronic mouseFor input of data and commands, a video screen or printer for output of information, and magnetic or optical disks for storage of data resources.(iii) Software Resources:Software resources include all sets of information processing instructions.•Program - a set of instructions that causes a computer to perform a particular task.•Procedures - set of instructions used by people to complete a task.Examples of software resources are:•System software – such as an operating system program, that controls and supports the operations of a computer system.•Application software – are programs that direct processing for a particular use of computers by end users.•Procedures – are operating instructions for the people who will use an informationsystem.(iv) Data Resources:


Data constitutes a valuable organizational resource. Thus, data resources must be managed effectively to benefit all end users in an organization. The data resources of information systems are typically organized into:•Databases - a collection of logically related records or files. A database consolidates many records previously stored in separate files so that a common pool of data records serves many applications.•Knowledge Bases - which hold knowledge in a variety of forms such as facts and rules of inference about various subjects.

Data versus Information.

The word data is the plural of datum, though data is commonly used to represent both singular and plural forms. The term’s data and information are often used interchangeably. However, you should make the following distinction:

Data: - are raw facts or observations, typically about physical phenomena or business transactions. More specifically, data are objective measurements of the attributes (characteristics) of entities, such as people, places, things, and events.

Information: - is processed data, which has been placed in a meaningful and useful context for an end user. Data is subjected to a “value-added” process (data processing or information processing) where:•Its form is aggregated, manipulated, and organized.•Its content is analyzed and evaluated•It is placed in a proper context for a human user

(v) Network Resources:Telecommunications networks like the Internet, intranets, and extranets have become essential to the successful electronic business and commerce operations of all types of organizations and their computer-based information systems. Telecommunications networks consist of computers, communications processors, and other devices interconnected by communications media and controlled by


communications software. The concept of network resources emphasizes that communications networks are a fundamental resource component of all information systems.Network resources include:•Communications media (twisted-pair wire, coaxial cable, fiber-optic cable, and microwave, cellular, and satellite wireless systems.•Network support (people, hardware, software, and data resources that directly support the operation and use of a communications network).

Operation elements of an MIS:-

1) Physical Components

HardwareSoftwareData baseProceduresPersonnel

2) Processing Functions

Processing TransactionsMaintain Master FileProduce reportsProduce InquiriesSupport Applications

3) Outputs for users:-

Transactions documentsPreplanned reports (Sales Analysis)


Preplanned Inquiries (pay rate)Adhoc ReportsUser machine dialogue results

Following functions carried out by the activities

Strategic planning - Formulation of objectivesManagement control -Resource allocationOperational control - Scheduling activitiesTransactions - Processing of orderMIS as a pyramid (Robert)

Higher Unstructured

Lower Structured

Action & Monitoring Decision support

Information concepts

Information

“Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or progressive decision”

Data Processing:-

Conversion of facts into meaningful information.

• The Four Stages of Data Processing


Strategic planning

Management control

Operational control

TPS

– Input: Data is collected and entered into computer.

– Data processing: Data is manipulated into information using mathematical, statistical, and other tools.

– Output: Information is displayed or presented.

– Storage: Data and information are maintained for later use.

Management of Information

Control problems faced by larger & smaller organizations New IT provide organizational with tools This can be effective, only if management has basic skills

(designing implementing, controlling Info system)

Data representation

Represent data in the form of binary digits called bits

Bit ---------- 0 & 18Bits -------- 1 Byte

8 bits represents a character (eg) A-01000001A character is called as byte.

Characteristics of Information:-

1) Quality:-

The parameters of a good quality are difficult to determine for information. Quality of information refers to its fitness for use, or its reliability. It can be evaluated in terms of four utilities.

In terms of Utilities:-

Form Place Time Possession(Form matches) (Easily accessible) (Available) (Proccessor controlling its value)

2) Timeliness:- Available when it is needed


Current information in changing environment

Timeliness means that information must reach the recipients within the prescribed timeframes. For effective decision-making, information must reach the decision-maker at the right time, i.e. recipients must get information when they need it. Delay destroys the value of information. The characteristic of timeliness, to be effective, should also include up-to-date, i.e. current information.

3) Completeness:-

Completeness of information is the extent to which it is all here

Information that is complete means, information that covers key issues and is difficult to support the decision making at hand without critical omissions.

Care must be taken not to provide extra information than needed.

The information which is given to a manager must be complete and should meet all his needs. Incomplete information may result in wrong decisions and thus may prove costly to the organization.

4) Relevance:-

Information is said to be relevant if it answers especially for the recipient what, why, where, when, who and why? In other words, the MIS should serve reports to managers which are useful and the information helps them to make decisions.

5) Accuracy

Information should be accurate. It means that information should be free from mistakes, errors &, clear Accuracy also means that the information is free from bias. Wrong information given to management would result in wrong decisions. As managers decisions are based on the information supplied in MIS reports, all managers need accurate information.

6) Adequacy:

Adequacy means information must be sufficient in quantity, i.e. MIS must provide reports containing information which is required in the deciding processes of decision-making. The report should not give inadequate or for that matter, more than adequate information, which may create a difficult situation for the decision-maker. Whereas


inadequacy of information leads to crises, information overload results in chaos.

7) Verifiable, Flexible, accessible are some of the other characteristics

Different types of Information

The information can be classified in a number of ways provide to better understanding. Jhon Dearden of Harvard University classifies information in the following manner:

(1) Action Verses No-Action Information:

The information which induces action is called action Information. ‘No stock’ report calling a purchase action is an action information.The information which communicates only the status is No-Action Information. The stock balance is no-action information.

(2) Recurring Verses No-Recurring Information:

The information generated at regular intervals is Recurring Information. The monthly sales reports, the stock statement, the trial balance, etc are recurring information. The financial analysis or the report on the market research study is no recurring information.

(3) Internal and external information:

The information generated through the internal sources of the organization is termed as Internal Information, while the information generated through the govt. reports, the industry survey etc., termed as External Information, as the sources of the data are outside the organization.

The information can also be classified, in terms of its application:a. Planning Information:

Certain standard norms and specifications are used in planning of any activity. Hence such information is called the Planning Information. e. g. Time standard, design standard.

b. Control Information:

Reporting the status of an activity through a feedback mechanism is called the Controlling Information. When such information shows a


deviation from the goal or the objective, it will induce a decision or an action leading to control.

c. Knowledge Information:

A collection of information through the library records and the research studies to build up a knowledge base as information is known as Knowledge Information.

d. Organization Information:

When the information is used by everybody in the organization, it is called Organization Information. Employee and payroll Information is used by a number of people in an organization.e.Functional/ Operational Information:

When the information is used in the operation of a business it is called functional/Operational Information.

f. Database Information:

When the information has multiple use and application, it is called as database information. Material specification or supplier information is stored for multiple users.

Other categories of Information system classification

1) Personal information system:-

Components:-It has 3 Components

1) Programs2) Data key roles are played by user, user

operator & developer3) Procedure

2) Work group info system:-

Components:-

a. PC’S (LAN)b. Proceduresc. Interconnected Hardwared. Hardware

3) Organizational info system:-


All 5 components are used

Business model

A business model describes the rationale of how an organisation creates, delivers, and captures value - economic, social, or other forms of value. The term business model is thus used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, offerings, strategies, infrastructure, organisational structures, trading practices, and operational processes and policies.

Users of information within the organization:-

Finance Personnel Sales Market Research Production Purchase etc

Users of information outside the organization:-

Government Auditor Shareholders Customers

Sources of information:-


It has 2 sources1)Internal:- 2)External:-File recorder Trade PublicationsLetters Government StatisticsReportsDocuments etc

Strategic information system:-

Support strategic objectives of an organization. That gives strategic advantage over it competitors.

Business as a system:-Following components are used

Input Processing Output Feedback Control Environment

Reasons for MIS failure Inadequate analysis -problems, needs and constraints aren’t understood in the early stages.

Lack of management involved in the design -wrong expectations of a new system / no-one understands the system.

Emphasis on the computer system – Need procedures for handling input and output / select the right hardware and software

Lack of management knowledge of ICT systems and capabilities – managers know what they want from the system but don’t understand the technology. (Information and communications technology)

Lack of teamwork – An ICT manager must co-ordinate the accounts, marketing, sales etc. departments and help everyone understand the benefits of the system

Lack of professional standards – All systems need clear documentation that all users can understand (not just the ICT literate)


Adequate attention is not given to the quality control aspects of the inputs, the process and the outputs leading to insufficient checks and controls in the MIS.

Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information

Lack of training and appreciation that the users of the information and the generators of the data are different, and they have to play an important responsible role in the MIS.

Roles and Responsibilities of a System AnalystSystem analyst is the person who is responsible for the analysis of the system. He is the person who is responsible to deal with the customers and gather his requirements.

In some companies, this person might be called a Business Analyst, Business Systems Analyst, Systems Analyst or a Requirements Analyst.

The pure definition of a Systems Analyst is a programmer or consultant who designs and manages the development of business applications.

Typically, systems analysts are more involved in design issues than in day-to-day coding. However, systems analyst is a somewhat arbitrary title, so different companies define the role differently.

Typical Position Description: Gather and analyze organizational data for developing

information systems.

Study existing business procedures and computer programsto determine how both could be better organized and structured for the betterment of the organization.

Study technological and business trends to be able to recommend changes to technology and business process to take advantage of advances in both.


Design and guide the implementation of business computed-based information systems.

Prepare and present reports to management as needed.

Typical Duties1. Analyze existing business operations and existing information

systems (computerized or not).

2. Study trends in technology.

3. Study trends in business and be aware of competitors' exploitation of technology.

4. Propose alternative solutions to business problems and select preferred solution. Justify selection.

5. Recommend technology products (hardware and software) for purchase.

6. Design new systems including process flow, user interface, reports, and security procedures.

7. Prepare training material for users of new system.

8. Supervise implementation of new system.

Most Desired Skills and Qualities

1. Excellent communication abilities (oral and written).2. Problem solving.3. Understanding of the potential of computer technology.4. Appreciation for the business's objectives.5. Ability to guide people through periods of change.6. Patience.7. Creativity.

Role of System Analyst differs from organization to organization. Most common responsibilities of System Analyst are following:

Steps involved in Analysis and MIS Design


System analysisSystem analysis and designSystem analysis design and programming

(MIS planning and Design)

Generally there are nine steps to follow in MIS design. They are as follows:

1. Requirements Determinations

2. Requirements Specifications

3. Feasibility Analysis

4. Final Specifications

5. Hardware Study

6. System Design

7. System Implementation

8. System Evaluation

9. System Modification

Step 1: Requirements Determination

Arrived at by a consensus among managers

Priorities among applications determined

Pick high priority applications.

Step 2: Requirements Specification

Known as System Requirements Specification (SRS)

Understand the existing System

Applications where a system is required are listed

Arrive at the specifications of the users’ Requirements after discussions with the user

A system may encompass several applications

Step 3: Feasibility Analysis

Formulate Goals of the system and quantify goals

Find alternative methods of meeting the goals


For each alternative assess resources needed

- Human Resources

- Time and Money

- Equipment needed

Assess cost of each alternative

Find the best alternative method subject to resource constraints

Step 4: Final Specifications

Specifications would state what the system would achieve.

Specifications drawn up are improved for implementation.

SRS written- given to user and agreement reached

Step 5: Hardware Study

Determine Hardware and Software required to execute the application.

Determine Response time,Volume of data to be processed, Frequency of reports etc & then pick the hardware.

Step 6: System Design

Logical Design of the System

Objects Identified

Database Designed

Program Specification drawn up

Implementation Plan Drawn up

Test Plan

Step 7 : System Implementation

Write Programs, Create Database,


Document System,Train Users,

Trial run of the system, Test and Accept

Step 8: System evaluation

Find out from Users whether the System meets specified requirements.

List areas of dissatisfaction and find reasons

Suggest if there has to be any improvements to the system

Step 9 : System Modification

Fix errors

Add/Delete features as required by users

Tune the System

Continuously monitor system and assess performance

Information systemIntroduction

How are the information systems useful for decision making in the business organizations?

The objective of an MIS (Management Information System) is to provide information for decision making on planning, initiating, organizing, and controlling the operations of the subsystems of the form and to provide a synergetic organization in the process.

Decision Support System:

It is sometimes described as the next evolutionary step after Management Information Systems (MIS). MIS support decision making in both structured and unstructured problem environments.. It supports decision making at all levels of the organization.

The main purpose of management information system is to ensure the flow of appropriate information to the appropriate people of organization as well as parties related with organization. The entire


process objective is to provide complete, timely, reliable and quality information's to the decision makers.

Today’s managers depend on information systems for decision making. The managers have handful of data around them but manually they cannot process the data accurately and with in the short period of time available to them due to heavy competition in modern world. Therefore mangers depend on information systems.

Material Information System

Meaning

MMIS provides on-line information on stock level, work-in- process; finished goods, and stores and spares.

Material management information system is a complex and unique flow of materials, funds and information flow processing system. The system's processing features material is the basis for material TX deposit at the center, and financial accounting as the core material for the planning, procurement, warehousing, sales, inquiries statistics integrated management process, including project management, contract management, material management transceiver deposit, storage management, financial audits, and statistical functions, taking into account the operational and management functions to fully meet the company supplies materials management and grassroots units of the basic requirements.

Decision support systems (DSS)

Meaning

A decision is a choice made between 2 or more available alternatives.

Decision Making is the process of choosing the best alternative for reaching objectives.

Decision support systems (DSS) are a computer-based information system that supports business or organizational decision-making activities.


http://www.answers.com/topic/decision-making

http://www.answers.com/topic/information-system-technology

DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance.

DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions.

Levels of management Decision making

Types of Decisions

1. Structured decisions:

Follow a set of rules. This means that: decisions can be taken objectively there is a clearly defined method of solving the problem generally, there is a right answer. Routine, easily understood decisions that do not require intuition or judgment.

2. Unstructured decisions

Unstructured decisions are normally subjective and do not follow any definite set of rules. (Efforts are made to turn unstructured decisions into structured ones by setting hard-and-fast criteria.). Decisions that rely heavily on judgment, intuition, and experience.


http://www.answers.com/topic/expert-system

3. Semi-structured decisions

Semi-structured decisions lie between structured and unstructured decisions. Some parts of the decision making process are programmable (structured), others not. Decisions that are part routine and part intuitive.

Other types of decisions are:

1. Analytical decisions: An analytical decision is one that is based on an analysis of information that has been systematically acquired and evaluated. Much of the information will be quantitative.

2. Heuristic decisions: These solutions will usually depend on trial and error. Common sense, past experience and general guidelines may be used to help, but the decision maker is not applying any techniques that will guarantee the correct answer first time.

Benefits of DSS (advantages)

1. Ability to examine more alternatives2. Ability to achieve a better understanding of the business.3. Ability to respond quickly to unexpected situations.4. Ability to provide timely information for control.5. Improves personal efficiency6. Speed up the process of decision making7. Increases organizational control8. Encourages exploration and discovery on the part of the

decision maker9. Speeds up problem solving in an organization10. Facilitates interpersonal communication11. Promotes learning or training12. Creates a competitive advantage over competition

COMPONENTS OF A DSS

There are three basic components in a DSS:

1. the database (or knowledge base),2. the model (i.e., the decision context and user criteria),

and3. the user interface


http://www.answers.com/topic/user-interface

http://www.answers.com/topic/conceptual-modeling-1

http://www.answers.com/topic/knowledge-base

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The users themselves are also important components of the architecture

Depending on the system, each of these components may be very simple or highly elaborate. The database, or in advanced systems, a database management system (DBMS) or a data warehouse, consists of structured, real-life information, such as customer account records, product sales history, employee schedules, or manufacturing process statistics. The model base, or model base management system (MBMS), contains one or more models for the kind of analysis the system will perform. For example, if the purpose of the system is to supply sales projections under different conditions, one model might be a linear regression formula derived from past sales and other factors. The user interface integrates the two into a coherent system and provides the decision maker with controls for—and possibly feedback about—managing the data and the models.

Characteristics of DSS

The key DSS characteristics and capabilities are as follows:

1. DSS assists managers in semis structured and unstructured problems.

2. DSS supports managers at all levels.3. DSS supports individuals and groups.4. DSS supports for interdependent or sequential decisions.5. DSS supports intelligence, design, choice, and

implementation.6. Support variety of decision processes and styles. DSS

should be adaptable and flexible.7. DSS should be interactive ease of use.8. DSS improves the effectiveness of the decision makers.9. Complete control by decision-makers.10. Ease of development by end users

Using DSS


http://www.answers.com/topic/user-account

What-if Analysis

End user makes changes to variables, or relationships among variables, and observes the resulting changes in the values of other variables

Sensitivity Analysis

Value of only one variable is changed repeatedly and the resulting changes in other variables are observed

Goal-Seeking analysis

Set a target value for a variable and then repeatedly change other variables until the target value is achieved

Optimization

Goal is to find the optimum value for one or more target variables given certain constraints

One or more other variables are changed repeatedly until the best values for the target variables are discovered of only one variable is changed repeatedly and the resulting changes in other variables are observed

HERBERT SIMON MODEL

Decision-making is a process in which the decision-maker uses to arrive at a decision. The core of this process is described by Herbert


Simon in a model. He describes the model in three phases as shown in the figure below.

1. Intelligence: raw data collected, processed and examined, Identifies a problem calling for a decision.

2. Design: inventing, developing and analyzing the different decision alternatives and testing the feasibility of implementation. Assess the value of the decision outcome.

3. Choice: select one alternative as a decision, based on the selection criteria.

Intelligence Phase

In the intelligence phase, the MIS collects the data. The data is scanned, examined, checked and edited. Further, the data is sorted and merged with other data and computations are made, summarized and presented. In this process, the attention of the manager is drawn to all problem situations by highlighting the significant differences between the actual and the expected, the budgeted or the targeted.

Design Phase

In the design phase, the manager develops a model of the problem situation on which he can generate and test the different decision alternatives, he then further moves into phase of selection called as choice.

Choice Phase

In the phase of choice, the manager evolves selection criteria such as maximum profit, least cost, minimum wastage, least time taken and highest utility. The criterion is applied to the various decision alternatives and the one which satisfies the most is selected.

In these phases, if the manager fails to reach a decision, he starts the process all over again and again. An ideal MIS is supposed to make a decision for the manager.


Disadvantages of DSS

DSS cannot replace human-factors involve in decision making.

Appropriate assumption (correct DSS usage and application support).

Decision process only assisted by DSS.

Result interpretation

Executive Information system or Executive support system

Meaning:

Executive Support System (ESS) is a reporting tool (software) that allows you to turn your organization's data into useful summarized reports. These reports are generally used by executive level managers for quick access to reports coming from all company levels and departments such as billing, cost accounting, staffing, scheduling, and more.

An executive information system (EIS) is a decision support system (DSS) used to assist senior executives in the decision-making process.

The Executive Information System capabilities are as follows:

1. Providing support for electronic communications.

2. Having the ability to analyze data.

3. Having an organizing tool.

E xecutive Information System Components


http://aboutinformationsystem.blogspot.com/2011/07/components-of-executive-information.html

http://www.blogger.com/goog_1246145481

http://www.webopedia.com/TERM/D/data.html

http://www.webopedia.com/TERM/S/software.html

Hardware

Software

User Interface

Telecommunication

Hardware,

Hardware used to operate the information systems executive. For the SIE, it takes a simple hardware and simple to executives, such as the media would be nice if the Touch Screen. And EIS uses touch screen technology for better.

Software

This system only displays reports and graphs without any input other than the login process, which will be seen by the executive to help make decisions for the organization's future

User Interface

User interface should be made user friendly and simple, so that executives can immediately understand without having to do the training in advance

Telecommunications

The integration of databases and management information system for displaying data that are always updated at any time

Characteristics of EIS Summarizing, filter, and obtain detailed data. EIS created to

display graphs and reports from the business processes of an organization or company. Where the data is used as a material consideration for future decision making.

Provides trend analysis, exception reporting and drill-down capabilities. Drill down a facility such as a button or link that when clicked will display the detail data from public records that had been clicked.

Can integrate external and internal data.


Easy to use. This is the main thing that distinguishes the EIS with the other systems. Ease of use is set in stone in the manufacture of the EIS, both system design and interface design.

Can be directly used by executives.

Presenting information in a variety of reports. This system generally displays the data in the form of graphs and reports.

Some of the executive information system has features that have facilities.

Advantages of Executive Information System

Easier for executives to use his experience in the computer world.

Providing timely delivery of the summary description of the company.

Information provided the easier to understand.

Typically offer efficiencies to make a decision.

Perform filtering of data for management.

Improve inspection information.

Can Accessing and integrating internal and external data range that is broad.

Disadvantages of Executive Information System

Has a limited function, cannot perform complex calculations.

High cost to make implementation.

Because the system is large, making it difficult to arrange.

Need good internal process


http://aboutinformationsystem.blogspot.com/2011/07/components-of-executive-information.html

http://aboutinformationsystem.blogspot.com/2011/07/things-that-should-exist-in-executive.html

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Executives may face a burden too heavy to make a statement.

System may become slow, large and hard to manage

Knowledge Management System

Introduction

Before understanding the concept of Knowledge Management, it is must to know about the meaning of knowledge. We define knowledge, which is known as information, enrichment, practical skill, acquaintance, etc. In Knowledge Management point to view, knowledge may be defined as actionable wisdom that results facts, information and techniques in a particular field

Knowledge

Knowledge may be defined as actionable wisdom that results facts, information and techniques in a particular field

Knowledge Management

Knowledge Management is creation, distribution and utilization of knowledge at the individual group and Organizational level for the benefits of people improved and affected by it.

KM processes provide a framework for connecting people to people and people to information.

3 basic elements of Knowledge Management:-

Knowledge Management is a system by which business strategies is excused and create results. In Knowledge Management there are three basic elements:

i) Knowledge creationii) Knowledge sharing andiii) Knowledge utilizatisation


Information+ Experience+ insights + judgment = “KNOWLEDGE”

Types of knowledge

Explicit knowledge (found in documents)

Explicit knowledge can be articulated into formal language, including grammatical statements (words and numbers), mathematical expressions, specifications, manuals, etc. Explicit knowledge can be readily transmitted others. Also, it can easily be processed by a computer, transmitted electronically, or stored in databases.

Explicit knowledge is that which can generally be written down or otherwise documented, and shared. Basically it is what is already known and can be put into words or represented graphically or in some audio-visual format.

Tacit knowledge (personal knowledge embedded in individual experience)

Tacit knowledge is personal knowledge embedded in individual experience and involves intangible factors, such as personal beliefs, perspective, and the value system. Tacit knowledge is hard to articulate with formal language (hard, but not impossible). It contains subjective insights, intuitions, and hunches. Before tacit knowledge can be communicated, it must be converted into words, models, or numbers that can be understand. In addition, there are two dimensions to tacit knowledge:

Technical Dimension (procedural):

This encompasses the kind of informal and skills often captured in the term know-how. For example, a craftsperson develops a wealth of expertise after years of experience. But a craftsperson often has difficulty articulating the technical or scientific principles of his or her craft. Highly subjective and personal insights, intuitions, hunches and inspirations derived from bodily experience fall into this dimension.

Cognitive Dimension:


This consists of beliefs, perceptions, ideals, values, emotions and mental models so ingrained in us that we take them for granted. Though they cannot be articulated very easily, this dimension of tacit knowledge shapes the way we perceive the world around us

Knowledge conversion

Nonaka & Takeuchi's model of the four modes of knowledge creation or conversion that are derived from the two kinds of knowledge:

To tacit knowledge

To explicit knowledge

From tacit knowledge Socialization Externalization

From explicit knowledge Internalization Combination

Socialization:

From tacit to tacit — sharing experiences to create tacit knowledge, such as shared mental models and technical skills. This also includes observation, imitation, and practice. However, “experience” is the key, which is why the mere “transfer of information” often makes little sense to the receiver.

Internalization:

From explicit to tacit — embodying explicit knowledge into tacit knowledge. Closely related to “learning by doing.” Normally, knowledge is verbalized or diagrammed into documents or oral stories.

Externalization:

From tacit to explicit — The quintessential process of articulating tacit knowledge into explicit concepts through metaphors, analogies,


concepts, hypothesis, or models. Note that when we conceptualize an image, we express its essence mostly in language

Combination,:

From explicit to explicit — A process of systemizing concepts into a knowledge system. Individuals exchange and combine knowledge through media, such as documents, meetings, and conversations. Information is reconfigured by such means as sorting, combining, and categorizing. Formal education and many training programs work this way.

Knowledge management helps organization to,

Need for Knowledge Management

1. To generate information for production increases reduction of cost of expenditure, maximizing profit through knowledgeable worker or minds of workers.

2. To improve the natural and human resources through innovative method to reach.


Build competitive advantage

Improve organizational effectiveness and Returns

Create greater value

See the opportunities and exploit them

3. To save the Organization from critical capabilities

4. To develop the right source at right timely relevant knowledge

5. To focus the higher quality production and resource allocation

6. To ensure their survival through creation, acquire, maintain, retain and process the new ideas and innovation

7. To share strong cultural behaviors for achieve goals

How then do HR processes and practices impact the knowledge sharing in a firm?

Job rotations

Networked organization

Training

Knowledge communities (Teams)

E- Learning

Culture change

Benefits of knowledge management

Creating an enterprise-wide knowledge management system is not a simple task. However, the benefits of a well-designed system are immense:

AwarenessEveryone knows where to go to find the organizations knowledge, saving people time and effort.

AccessibilityAll individuals can use the organizations combined knowledge and experience in the context of their own roles.

AvailabilityKnowledge is usable wherever it is needed whether from the home office, on the road or at the customers’ side. This enables increased responsiveness to customers, partners and coworkers.


Timeliness.Knowledge is available whenever it is needed, eliminating time-wasting distribution of information.

New Ideas and Creativity. Improve and accelerate Learning. Enhance Team Collaboration & Coordination. Improve the Flow of knowledge. Attract, and retain motivated, loyal, and committed talent.

Components of knowledge Management

1. Developing new knowledge

Companies survive by the continuous development of new knowledge based on creative ideas, the analysis of failures, daily experiences and work in R & D departments. Corporate memories can support these processes by for instance recording failures and successes.

2. Securing new & existing Knowledge

Individual knowledge must be made accessible to others who need that knowledge. This knowledge must be available at the right time and place. Knowledge stored in corporate memories becomes persistent.

3. Distributing Knowledge

Knowledge must be actively distributed to those who can make use of it. The turnaround speed of knowledge is becoming crucial for the competitiveness of companies. To support this process corporate


memories need a facility for deciding who should be informed about a particular new piece of knowledge.

4. Combining available knowledge

A company can only perform at its best if all available knowledge areas are combined in its new products. Products and services are increasingly being developed by multidisciplinary teams. Corporate memories may facilitate this by making it easier to access knowledge developed in other parts of the organization.

Knowledge management process

1. Identify

This stage determines which competencies are critical to success. For example every organization needs robust knowledge about its customer needs and other organizations, products and services, finances, processes, management, employees and other organization and environmental aspects. Then the related strategic and knowledge domains are identified.

2. Collect

The collect stage deals with acquiring existing knowledge, skills theories and experience needed to create the selected core competencies and knowledge domains. In order to be useful knowledge expertise and experience must be formalized by making it explicit.

3. Select

The select stage takes the continuous stream of collected and formalized knowledge and assesses its value. Is their insight within the acquired knowledge information? Is the acquired knowledge a new plausible domain theory that needs to be added to the knowledge


repository? Clearly domain experts must assess and selects the knowledge to be added in the organizational memory

4. Store

The store stage takes the nuggets of knowledge and classifies them and adds them to the organizational memory. This corporate memory resides in different forms in human minds on paper and electronically. Knowledge in human minds needs to be made explicit and formalized in order to be useful

5. Share

The share stage retrieves knowledge from the corporate memory and makes it accessible to uses. The workforce makes their needs and personal interest known to the corporate memory which then automatically distributes any incoming new knowledge to its subscribers either electronically or on paper.

6. Apply

The apply stage retrieves and uses the needed knowledge in performing tasks, solving problems ,making decisions researching ideas and learning. In order to easily access, retrieve and apply the right pieces of knowledge at the right time in the right form, more than a query language is needed.

7. Create

The create stage uncovers new knowledge through many avenues. Such as observing customers, customer’s feedback and analysis, casual analysis & best practices. This stage also covers how to elicit nonverbal unconscious knowledge from domain experts and turn it into documented formal knowledge.

8. Sell

The sell stage in which new products and services are crafted from the intellectual capital that can be marketed external to the enterprise. Before this stage is possible considerable maturity should be attained in the other seven stages


CHARACTERISTICS OF KMS

Open and Distributed

By definition, a knowledge management system unifies existing knowledge silos. Knowledge management systems must also be able to be distributed over various host computers and physical locations. The system should allow system administration from any location by using HTML, Java applets or ActiveX controls that are accessible through any compatible web browser.

Customizable

All organizations and large organizations in particular require an extremely customizable knowledge management system. The system should supply user interfaces in the form of templates so users can easily customize them using tools such as HTML and JavaScript. A robust knowledge management system should allow easy integration of existing and new applications. It must include documented application programming interfaces (APIs) and software developer toolkits (SDKs) that allow the organization to link systems to each other.

Measurable

Measurement is a critical aspect of any knowledge management effort to strike the right balance between organizational and technological changes. Only by quantifying and processing the results can organizations determine if the systems are having the desired effect. A knowledge management system includes tools that allow managers to measure and verify usage to get a clear picture of how the system is being used, locate performance bottlenecks and, most importantly, use the data to improve organizational knowledge transfer processes.

Secure

While traditional applications usually require the administrator to grant access to those who need particular information, knowledge management applications focus on maximizing access to knowledge. Therefore they are more likely to require the administrator to prohibit access to specific content areas to those workers who should not have access to them. However, this does not mean that knowledge management systems do not have security.


Strategies of KMS

Following points to be kept in mind while sharing or distributing the knowledge:

What to share?

With whom to share?

How will be shared?

Why will be shared?

Geographic Information systemMeaning

A geographic information system (GIS) integrates hardware, software, and data for capturing, managing, analyzing, and displaying all forms of geographically referenced information.

A geographic information system (GIS) is a computer-based tool for mapping and analyzing spatial data. GIS technology integrates common database operations such as query and statistical analysis with the unique visualization and geographic analysis benefits offered by maps.

GIS allows us to view, understand, question, interpret, and visualize data in many ways that reveal relationships, patterns, and trends in the form of maps, globes, reports, and charts.

A GIS helps you answer questions and solve problems by looking at your data in a way that is quickly understood and easily shared.


Benefits of GISThe benefits of GIS generally fall into five basic categories:

Cost Savings and Increased Efficiency IS is widely used to optimize maintenance schedules and daily fleet movements. Typical implementations can result in a savings of 10 to 30 percent in operational expenses through reduction in fuel use and staff time, improved customer service, and more efficient scheduling.

Better Decision Making GIS is the go-to technology for making better decisions about location. Common examples include real estate site selection, route/corridor selection, evacuation planning, conservation, natural resource extraction, etc. Making correct decisions about location is critical to the success of an organization.

Improved Communication GIS-based maps and visualizations greatly assist in understanding situations and in storytelling. They are a type of language that improves communication between different teams, departments, disciplines, professional fields, organizations, and the public.

Better Recordkeeping Many organizations have a primary responsibility of maintaining authoritative records about the status and change of geography. GIS provides a strong framework for managing these types of records with full transaction support and reporting tools.

Managing Geographically GIS is becoming essential to understanding what is happening—and what will happen—in geographic space. Once we understand, we can prescribe action. This new approach to management—managing geographically—is is transforming the way that organizations operate.

Components of Geographic Information System

A working Geographic Information System seamlessly integrates five key components: hardware, software, data, people, and methods.

Hardware


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Hardware includes the computer on which a GIS operates the monitor on which results are displayed, and a printer for making hard copies of the results. Today, GIS software runs on a wide range of hardware types, from centralized computer servers to desktop computers used in stand-alone or networked configurations.

Software

GIS software provides the functions and tools needed to store, analyze, and display geographic information. Key software components include tools for the input and manipulation of geographic information, a database management system (DBMS), tools that support geographic query, analysis, and visualization, and a graphical user interface (GUI) for easy access to tools.

Data

Possibly the most important component of a GIS is the data. A GIS will integrate spatial data with other data resources and can even use a database management system, used by most organizations to organize and maintain their data, to manage spatial data. There are three ways to obtain the data to be used in a GIS. Geographic data and related tabular data can be collected in-house or produced by digitizing images from aerial photographs or published maps. Data can also be purchased from commercial data provider. Finally, data can be obtained from the federal government at no cost.

People

GIS users range from technical specialists who design and maintain the system to those who use it to help them perform their everyday work. The basic techniques of GIS are simple enough to master that even students in elementary schools are learning to use GIS.

Methods

A successful GIS operates according to a well-designed plan and business rules, which are the models and operating practices unique to each organization.

Objectives of GIS

Maximize the efficiency of planning and decision making

Provide efficient means for data distribution and handling


Elimination of redundant data base - minimize duplication

Capacity to integrate information from many sources

Complex analysis/query involving geographical referenced data to generate new information.

For any application there are five generic questions a GIS can answer:

Location - What exists at a particular location?Condition - Identify locations where certain conditions exist.Trends - What has changed since?Patterns - What spatial pattern exists?Modeling - What if ……….?

Uses of GIS

Geographic Information Systems technology can be used for,

Scientific investigations Resource management Development planning Cartography and Route planning.

For example, GIS can help planners to quickly calculate the time of the emergency response during natural disasters.

What can we do with GIS?

Map Where Things Are

Mapping where things are lets you find places that have the features you're looking for and to see patterns.

Map Quantities

People map quantities to find places that meet their criteria and take action. A children's clothing company might want to find ZIP Codes with many young families with relatively high income. Public health officials might want to map the numbers of physicians per 1,000 people in each census tract to identify which areas are adequately served, and which are not.


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Map Densities

A density map lets you measure the number of features using a uniform areal unit so you can clearly see the distribution. This is especially useful when mapping areas, such as census tracts or counties, which vary greatly in size. On maps showing the number of people per census tract, the larger tracts might have more people than smaller ones. But some smaller tracts might have more people per square mile—a higher density.

Find What's Inside

Use GIS to monitor what's happening and to take specific action by mapping what's inside a specific area. For example, a district attorney would monitor drug-related arrests to find out if an arrest is within 1,000 feet of a school--if so, stiffer penalties apply.

Find What's Nearby

GIS can help you find out what's occurring within a set distance of a feature by mapping what's nearby.

Map Change

Map the change in an area to anticipate future conditions, decide on a course of action, or to evaluate the results of an action or policy. By mapping where and how things move over a period of time, you can gain insight into how they behave. For example, a meteorologist might study the paths of hurricanes to predict where and when they might occur in the future.

GIS Tasks

General purpose GIS’s perform seven tasks.

Input of data Map making Manipulation of data File management Query and analysis Proximity Visualization of results

Input of Data


Before geographic data can be used in a GIS, the data must be converted into a suitable digital format. The process of converting data from paper maps or aerial photographs into computer files is called digitizing. Modern GIS technology can automate this process fully for large projects using scanning technology; smaller jobs may require some manual digitizing which requires the use of a digitizing table.

Map Making

Maps have a special place in GIS. The process of making maps with GIS is much more flexible than are traditional manual or automated cartography approaches. It begins with database creation. Existing paper maps can be digitized and computer-compatible information can be translated into the GIS. The GIS-based cartographic database can be both continuous and scale free. Map products can then be created centered on any location, at any scale, and showing selected information symbolized effectively to highlight specific characteristics.

Manipulation of Data

It is likely that data types required for a particular GIS project will need to be transformed or manipulated in some way to make them compatible with your system. For example, geographic information is available at different scales (street centerline files might be available at a scale of 1:100,000; census boundaries at 1:50,000; and postal codes at 1:10,000). Before this information can be integrated, it must be transformed to the same scale. This could be a temporary transformation for display purposes or a permanent one required for analysis. GIS technology offers many tools for manipulating spatial data and for weeding out unnecessary data.

File Management

For small GIS projects it may be sufficient to store geographic information as simple files. There comes a point, however, when data volumes become large and the number of data users becomes more than a few, that it is best to use a database management system (DBMS) to help store, organize, and manage data. A DBMS is nothing more than computer software for managing a database--an integrated collection of data.

Query and Analysis

Once you have a functioning GIS containing your geographic information, you can begin to ask simple questions such as,


How far is it between two places?

How is this particular parcel of land being used?

What is the dominant soil type for oak forest?

Where are all the sites suitable for relocating an endangered species?

Where are all of the sites possessing certain characteristics?

If I build a new highway here, how will animals in the area are affected?

GIS provides both simple point-and-click query capabilities and sophisticated analysis tools to provide timely information to managers and analysts alike.

Proximity

Analysis is used to examine spatial relationships by determining the proximity relationship between features. Overlay Analysis integrates different data layers to look for patterns and relationships. At its simplest, this could be a visual operation, but analytical operations require one or more data layers to be joined physically. For example, to analyze the impact of urbanization on ecological characteristics of an area, an overlay could integrate data on soils, hydrology

Visualization

For many types of geographic operations, the end result is best visualized as a map or graph. Maps are very efficient at storing and communicating geographic information. While cartographers have created maps for millennia, GIS provides new and exciting tools to extend the art and science of cartography. Map displays can be integrated with reports, three-dimensional views, photographic images, and with multimedia.

International Information System

A general class of information systems that support transactions that cross national boundaries.

Growth of IIS


The world just keeps getting smaller and smaller. No company can afford to ignore foreign markets or the impact of foreign competition on the domestic business environment. You have to adapt to the changing faces, literally, of your competition and devise a plan to bring your organization into its focus

Globalization is possible even with very small businesses because of the technological advances in computer networks and telecommunications

•If you want your organization to develop have a Web site for E- commerce, and better have it available in 4 or 5foreign languages. That's what it takes today to compete

Developing an International Information Systems Architecture

Here it describes how to go about building an international information systems architecture suitable for international strategy. International information systems architecture consists of the basic information systems required by organizations to coordinate worldwide trade and other activities. Following are the major dimensions


The major dimensions for developing international information systems architecture are the global environment, the corporate global strategies, the structure of the organization, the management and business processes, and the technology platform.

The basic strategy to follow when building an international system is to understand the global environment in which your firm is operating. This means understanding the overall market forces, or business drivers, that are pushing your industry toward global competition.

A business driver is a force in the environment to which businesses must respond and that influences the direction of the business. Likewise, examine carefully the inhibitors or negative factors that create management challenges—factors that could scuttle the development of a global business.

Once you have examined the global environment, you will need to consider a corporate strategy for competing in that environment. How will your firm respond? You could ignore the global market and focus on domestic competition only, sell to the globe from a domestic base, or organize production and distribution around the globe. There are many in-between choices.

After you have developed a strategy, it is time to consider how to structure your organization so it can pursue the strategy. How will you accomplish a division of labor across a global


environment? Where will production, administration, accounting, marketing, and human resource functions are located? Who will handle the systems function?

Next, you must consider the management issues in implementing your strategy and making the organization design come alive. Key here will be the design of business processes. How can you discover and manage user requirements? How can you induce change in local units to conform to international requirements? How can you reengineer on a global scale and how can you coordinate systems development?

The last issue to consider is the technology platform. Although changing technology is a key driving factor leading toward global markets, you need to have a corporate strategy and structure before you can rationally choose the right technology.

After you have completed this process of reasoning, you will be well on your way toward appropriate international information systems architecture capable of achieving your corporate goals. Let’s begin by looking at the overall global environment.

The Global Environment: Business Drivers and Challenges

The global business drivers can be divided into two groups:

1. General cultural factors and 2. Specific business factors.General Cultural Factors


Global communication and transportation technologies reference the fact that a global village has been created in which global communications of all kinds are no more difficult and not much more expensive than domestic communications.

The development of a global culture has created shared values and beliefs around the world.

The emergence of global social norms references the fact that proper attire, proper consumption, good and bad government, and other norms are more and more shared.

In reference to political stability, the world is living through the longest period of world political stability in the modern age.

In reference to the global knowledge base, educational, scientific, and industrial knowledge and skills are no longer centered in North America, Europe, and Japan, but have spread to Latin American, China, Southern Asia, and Eastern Europe.

The specific business factors

They are global markets, global production and operations, global coordination, global workforce, and global economies of scale.

Global markets reference the fact that patterns of consumption of goods are becoming similar around the world.

Global production and operations refer to the fact that far-flung production facilities can now be coordinated at central headquarters thousands of miles away.

Global coordination means the coordination of business factors has expanded beyond production to include all major business functions, such as accounting, marketing, sales, and human resources systems development.

Global workforce means that we can locate our business activities based on workforce availability.

Global economies of scale means that production can now be concentrated where it can be best accomplished; lower cost factors of production can be exploited wherever they emerge.


These factors are interrelated. The spread of global communications has led to the emergence of a global culture and global social norms. This, in turn, has led to the development of global markets. Emerging global technologies make possible the transportation of raw materials and finished products throughout the world and have given businesses the ability to act globally.

Business Challenges of Global Systems

Although the possibilities of globalization for business success are significant, fundamental forces are operating to inhibit a global economy and to disrupt international business. The most common and powerful challenges to the development of global systems are,

At a cultural level, particularism, making judgments and taking action on the basis of narrow or personal characteristics, in all its forms (religious, nationalistic, ethnic, regionalism, geopolitical position) rejects the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services.

Differences among cultures produce differences in social expectations, politics, and ultimately legal rules. In certain countries, such as the United States, consumers expect domestic name-brand products to be built domestically and are disappointed to learn that much of what they thought of as domestically produced is in fact foreign made.


Different cultures produce different political regimes. Among the many different countries of the world are different laws governing the movement of information, information privacy of their citizens, origins of software and hardware in systems, and radio and satellite telecommunications. Even the hours of business and the terms of business trade vary greatly across political cultures. These different legal regimes complicate global business and must be considered when building global systems.

For instance, European countries have very strict laws concerning transborder data flow and privacy. Transborder data flow is defined as the movement of information across international boundaries in any form.

Cultural and political differences profoundly affect organizations’ business processes and applications of information technology. A host of specific barriers arise from the general cultural differences, everything from different reliability of phone networks to the shortage of skilled consultants.

National laws and traditions have created disparate accounting practices in various countries, which impact the ways profits and losses are analyzed. German companies generally do not recognize the profit from a venture until the project is completely finished and they have been paid. Conversely, British firms begin posting profits before a project is completed, when they are reasonably certain they will get the money.

These accounting practices are tightly intertwined with each country’s legal system, business philosophy, and tax code. British, U.S., and Dutch firms share a predominantly Anglo-Saxon outlook that separates tax calculations from reports to shareholders to focus on showing shareholders how fast profits are growing. Continental European accounting practices are less oriented toward impressing investors, focusing rather on demonstrating compliance with strict rules and minimizing tax liabilities. These diverging accounting practices make it difficult for large international companies with units in different countries to evaluate their performance.

Language remains a significant barrier. Although English has become a kind of standard business language, this is truer at higher levels of companies and not throughout the middle and lower ranks. Software


may have to be built with local language interfaces before a new information system can be successfully implemented.

Currency fluctuations can play havoc with planning models and projections. A product that appears profitable in Mexico or Japan may actually produce a loss because of changes in foreign exchange rates. Some of these problems will diminish in parts of the world where the euro becomes more widely used.

Organizing International Information Systems

Three organizational issues face corporations seeking a global position: choosing a strategy, organizing the business, and organizing the systems management area.

The first two are closely connected, so we discuss them together.

Global Strategies and Business Organization

The four main strategies for global business and organizational structure are domestic exporter, multinational, franchiser, and transnational.

The domestic exporter is characterized by heavy centralization of corporate activities in the home country of origin. Production, sales, marketing, finance, and other such functions are set up to optimize resources in the home country. Foreign marketing is totally reliant on the domestic home base.

A multinational company concentrates financial management and control in a central home base but decentralizes production, sales, and marketing to suit local market conditions.

Franchisers create, design, and finance the product in the home country, but rely on foreign personnel for further production, marketing, and human resources. Often, the product must be produced locally because it is perishable.

The transnational organization is a stateless, truly globally managed firm. It has no single national headquarters but instead has many regional headquarters and perhaps a world headquarters. Nearly all of the value-added activities are managed from a global perspective without reference to national borders.

TABLE 16-3 Global Business Strategy and Structure


Global Systems to Fit the Strategy

Information technology and improvements in global telecommunications are giving international firms more flexibility to shape their global strategies. The configuration, management, and development of systems tend to follow the global strategy chosen.

The four different system configurations are centralized, duplicated, decentralized, and networked.

Centralized systems reference systems development and operations that occur totally at the domestic home base.

With duplicated systems, systems development occurs totally at the home base, but operations are handed over to autonomous units in foreign locations.

With decentralized systems, each foreign unit designs its own, totally unique solutions and systems.

With networked systems, systems development and operations occur in an integrated and coordinated fashion across all units.

Managing Global Systems (Solutions)


The table lists the principal management problems posed by developing international systems. It is interesting to note that these problems are the chief difficulties managers experience in developing ordinary domestic systems as well! But these are enormously complicated in the international environment.

Management Challenges in Developing Global Systems

Agreeing on Common User Requirements

Establishing a short list of the core business processes and core support systems will begin a process of rational comparison across the many divisions of the company, develop a common language for discussing the business, and naturally lead to an understanding of common elements (as well as the unique qualities that must remain local).

Introducing Changes in Business Processes

Your success as a change agent will depend on your legitimacy, your actual raw power, and your ability to involve users in the change design process. Legitimacy is defined as the extent to which your authority is accepted on grounds of competence, vision, or other qualities. The selection of a viable change strategy, which we have defined as evolutionary but with a vision, should assist you in convincing others that change is feasible and desirable. Involving people in change, assuring them that change is in the best interests of the company and their local units, is a key tactic.

Coordinating Applications Development

Choice of change strategy is critical for this problem. At the global level there is far too much complexity to attempt a grand design


strategy of change. It is far easier to coordinate change by making small incremental steps toward a larger vision. Imagine a five-year plan of action rather than a two-year plan of action, and reduce the set of transnational systems to a bare minimum to reduce coordination costs.

Coordinating Software Releases

Firms can institute procedures to ensure that all operating units convert to new software updates at the same time so that everyone’s software is compatible.

Encouraging Local Users to Support Global Systems

The key to this problem is to involve users in the creation of the design without giving up control over the development of the project to parochial interests. Recruiting a wide range of local individuals to transnational centers of excellence helps send the message that all significant groups are involved in the design and will have an influence. These centers draw heavily from local national units, are based on multinational teams, and must report to worldwide management—their first line of responsibility is to the core applications.

International Information System Issues

1 .Intracorporate IS Issues

a. Organizational linkage b. Architectural linkage c. Personnel linkage

2. Intergovernmental IS Issues

3. Host Government IS Issuesa. Political issues b. Economic issues c. Technological issues d. sociocultural issues

4. Reactive International IS IssuesWhy is International IS Important?

For an organisation to survive and prosper

****More locations (networking, Internet)****New products and services****Improve jobs and work flows:


Efficiency Cost Ethical and social issues

Worldwide changes:

Global economy Knowledge- or information-based society Business enterprise Digital firm

Global Economy

Growing percentage of economy relies upon import and export Need to operate globally IS can provide global trading infrastructure

Introduction to Expert Systems

Definition: An expert system is a computer programme where data is stored and manipulated by the programme to come up with advises, hints, directions in reaction of input by users of data acquisition devices.

An expert system is software that attempts to provide an answer to a problem, or clarify uncertainties where normally one or more human experts would need to be consulted

A knowledge-based information system (KBIS) that uses its knowledge about a specific, complex application to act as an expert consultant to end users

An expert system is software that attempts to provide an answer to a problem, or clarify uncertainties where normally one or more human experts would need to be consulted. Expert systems are most common in a specific problem domain, and is a traditional application and/or subfield of artificial intelligence (AI)

An expert system is a computer program that simulates the judgement and behavior of a human or an organization that has expert knowledge and experience in a particular field.

Components of Expert system


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The advantage of an expert system can be seen in the fact that a separation takes place between collected knowledge and Problem Solving Strategy. Because of this differentiation maintenance costs of the system can be at a minimum. A complete Expert System consists of the following components:

1. KNOWLEDGE BASE composed by experts in a particular field

2. COMMUNICATION components3. SITUATION dependent or CONTEXT related HELP system4. PROBLEM SOLVING components. (line interpreter)

Only a combination of all these components allows the system to be called an EXPERT SYSTEM or KNOWLEDGE BASED SYSTEM.

Advantages:

Provides consistent answers for repetitive decisions, processes and tasks

Holds and maintains significant levels of information

Encourages organizations to clarify the logic of their decision-making

Always asks a question, that a human might forget to ask

Can work continuously (no human needs)

Can be used by the user more frequently

A multi-user expert system can serve more users at a time


Disadvantages:

Lacks common sense needed in some decision making

Cannot respond creatively like a human expert

Domain experts not always able to explain their logic and reasoning

Errors may occur in the knowledge base, and lead to wrong decisions

Cannot adapt to changing environments, unless knowledge
