Chapter 1 Notes
Chapter 1 – Management Information Systems
1. 1 Information System
Meaning of Information System:
- The information systems of automated hotels and restaurants can produce literally hundreds of reports for managers.
- To achieve the full potential of an automated information system, system functions must align with management's information needs.
- Information systems also streamline the process of collecting and recording data and expand the ways in which information is organized and reported.
- These systems enable management to speed up the process by which useful information is made available to those who make decisions.
Typical Components of Information SystemsThe typical components of Information System are as follows-
- Hardware :
Computer-based information systems use computer hardware, such as processors, monitors, keyboard and printers.
- Software :
These are the programs used to organize, process and analyze data.
- Databases :
Information systems work with data, organized into tables and files.
- Network :
Different elements need to be connected to each other, especially if many different people in an organization use the same information system.
- Procedures :
These describe how specific data are processed and analyzed in order to get the answers for which the information system is designed.
Types of Information SystemsThe type of information system that a user uses depends on their level in an organization.
- Transaction Processing Systems (TPS)
This type of information system is used to record the day to day transactions of a business. An example of a Transaction Processing System is a Point of Sale (POS) system. A POS system is used to record the daily sales.
- Management Information Systems (MIS)
Management Information Systems are used to guide tactic managers to make semi-structured decisions. The output from the transaction processing system is used as input to the MIS system.
- Decision Support Systems (DSS)
Decision support systems are used by top level managers to make semi-structured decisions. The output from the Management Information System is used as input to the decision support system. DSS systems also get data input from external sources such as current market forces, competition, etc.
1.2 Management Information System (MIS)
Definition of MIS
A management information system (MIS) is an integrated man-and-machine system that provides the basic information that is necessary for supporting, planning, and controlling an organization.
Meaning of MIS
MIS is a combination of human and computer-based resources that results in collection, storage, retrieval, communication, and use of data for efficient management operations. Management information system is used for supplying information that can be used for arriving at an effective decision. Computerization has helped in increasing the speed and accuracy of processing data, which in turn has led to better decision-making. The term 'management information system' is made up of three words—management, information, and system.
Management is the process of achieving organizational goals and objectives by using manpower, materials, machines, money, and methods. The various functions of management are planning, organizing, staffing, controlling, and directing.
It is defined as data that is organized and presented at a particular time and place so that the decision-maker can take the necessary action.
It is a group of elements or components that are joined together to fulfill certain functions. It is an assemblage of procedures, processes, methods, and routine techniques that are united in some form to form an organized whole. A system has three basic parts, which are set in an orderly manner.
Uses of Management Information System (MIS)
A management information system (MIS) is designed to provide managers with the information necessary to plan, organize, staff, direct, and control operations. An effective MIS is built around the information needs of managers. It can be designed so that system applications support decision-making activities at all levels within the organization.
An effective MIS extends its power beyond routine report generation and provides managers with the information they need to:
- a) Measure performance.
- b) Identify trends and patterns.
- c) Evaluate alternatives.
- d) Support decision-making.
- e) Assist in the identification of corrective action.
- f) Monitor progress toward achieving organizational goals.
Functions of Management Information System (MIS)
An MIS supports strategic planning, tactical decision-making, and operational decision-making. Strategic planning refers to decision-making activities through which future-oriented goals and objectives of an organization are established. Tactical decisions relate to activities required to implement strategic planning decisions. Operational decisions address specific tasks that normally follow previously established rules and patterns.Once the information needs of managers have been identified, an MIS is designed to perform the following functions:
- Better monitoring
Enable managers to better monitor and administer business transactions and activities.
- High Level Control
Provide a high level of operational and internal control over business resources.
- Meet Specific Needs
Produce timely and comprehensive reports formatted to the specific needs of management
- Reduce Paperwork & Expenses Reduce managerial paperwork and operational expenses by eliminating unnecessary source documents and streamlining data transfer and recording procedures.
Manual Information Systems VS Computerized Information Systems (MIS)
Data is the bloodstream of any business entity. Everyone in an organization needs information to make decisions. An information system is an organized way of recording, storing data, and retrieving information.
Manual Information System
A manual information system does not use any computerized devices. The recording, storing and retrieving of data is done manually by the people, who are responsible for the information system. The following are the major components of a manual information system
- People –
People are the recipients of information system
- Business Procedures – These are measures put in place that define the rules for processing data, storing it, analyzing it and producing information
- Data –
These are the recorded day to day transactions
- Filing system –
This is an organized way of storing information
- Reports –
The reports are generated after manually analyzing the data from the filing system and compiling it.
Advantages and Dis-advantages of a Manual Information System
Advantages of Manual Information System:The following are the advantages of manual information systems
- Cost effective –
It is cheaper compared to a computerized system because there is no need to purchase expensive equipment such as servers, workstations, printers, etc.
- Flexible –
Evolving business requirements can easily be implemented into the business procedures and implemented immediately
Disadvantages of Manual Information System:The following are some of the disadvantages of a manual information system.
- Time consuming –
All data entries need to be verified before filing, this is a time consuming task when done by humans. Retrieving data from the filing system also takes a considerable amount of time
- Prone to error –
The accuracy of the data when verified and validated by human beings is more prone to errors compared to verification and validation done by computerized systems.
- Lack of security –
The security of manual systems is implemented by restricting access to the file room. Experience shows unauthorized people can easily gain access to the filing room
- Duplication of data –
Most departments in an organization need to have access to the same data. In a manual system, it is common to duplicate this data to make it easy to accessible to all authorized users. The challenge comes in when the same data needs to be updated
- Data inconsistency –
Due to the duplication of data, it is very common to update data in one file and not update the other files. This leads to data inconsistency
- Lack of backups –
If the file get lost or mishandled, the chances of recovering the computerized systems data are almost zero.
Computerized Information System
Computerized information were developed to address the challenges of manual information systems. The major difference between a manual and computerized information system is a computerized system uses a combination of software and hardware to record, store, analyze and retrieve information.
Advantages and Disadvantages of a Computerized Information System (MIS)
Advantages of a Computerized Information System:The following are the advantages of computerized information systems
- Fast data processing and information retrieval –
This is one of the biggest advantages of a computerized information system. It processes data and retrieves information at a faster rate. This leads to improved client/customer service
- Improved data accuracy –
Easy to implement data validation and verification checks in a computerized system compared to a manual system.
- Improved security –
In addition to restricting access to the database server, the computerized information system can implement other security controls such as user’s authentication, biometric authentication systems, access rights control, etc.
- Reduced data duplication –
Database systems are designed in such a way that minimized duplication of data. This means updating data in one department automatically makes it available to the other departments
- Improved backup systems –
With modern day technology, backups can be stored in the cloud which makes it easy to recover the data if something happened to the hardware and software used to store the data
- Easy access to information –
Most business executives need to travel and still be able to make a decision based on the information. The web and Mobile technologies make accessing data from anywhere possible.
Disadvantages of a Computerized Information System:
- It is expensive to set up and configure –
The organization has to buy hardware and the required software to run the information system. In addition to that, business procedures will need to be revised, and the staff will need to be trained on how to use the computerized information system.
- Heavy reliance on technology –
If something happens to the hardware or software that makes it stop functioning, then the information cannot be accessed until the required hardware or software has been replaced.
- Risk of fraud –
If proper controls and checks are not in place, an intruder can post unauthorized transactions such as an invoice for goods that were never delivered, etc.
1. 5 Multi-Processor Environments
Managing Multi Processor Environments:Electronic Data Processing:
- Data are facts and/or figures to be processed into useful information.
- Data processing involves transforming raw facts and isolated figures into timely, accurate, and useful information.
- Every day, hospitality managers are bombarded with facts and figures about the results of operations. These individual pieces of data are relatively meaningless until they are organized or manipulated into useful information.
- Information, the result of data processing, is clearly one of the most valuable resources of a hospitality business.
- Information can increase a manager's knowledge regarding guests, service, labor, finance, and other areas of concern.
- Information may reduce the uncertainty that managers may experience when making decisions. And, after decisions have been made, information can provide managers with important feedback on the effectiveness of their decisions and may indicate new areas of concern that call for corrective action.
- Data processing is not unique to the world of business; it is an important function that occurs in everyday life as well. Everyone processes data.
Types of Data:There are three distinct types of data.
- Alpha Data:
It consists only of letters of the alphabet.
For example: the names of menu items, employees, and hotel guests are examples of alpha data.
- Numeric data:
It consists only of numbers. Menu prices, room numbers, transaction amounts, and occupancy percentages are numeric data.
- Alphanumeric data:
It is composed of both letters and numbers.
A hotel's street address, a menu item's description, and personnel records are examples of alphanumeric data
1. 3 Data Base Management System (DBMS)
Meaning of Database Management System:
A Database is a collection of related data organized in a way that data can be easily accessed, managed and updated. Any piece of information can be a data, for example name of your school. Database is actually a place where related piece of information is stored and various operations can be performed on it.
A DBMS is a software that allows creation, definition and manipulation of database. DBMS is actually a tool used to perform any kind of operation on data in database. DBMS also provides protection and security to database. It maintains data consistency in case of multiple users. Here are some examples of popular dbms, MySQL, Oracle, Sybase, Microsoft Access and IBM DB2 etc.
Files, Records, and Fields:
In a database management system, fields are labeled by categories that identify the kind of information they contain. Records are identified in terms of a primary key field, which contains unique information. The name of the primary key field becomes the basis for searches through a data file for a particular record.
The database of a hospitality business may be organized into many data files (such as personnel files, financial data files, guest history files, etc.). These files may contain dozens of records and scores of fields containing thousands of pieces of data. Database management applications structure the relationships among files, records, and fields in a way that ensures rapid access to information. However, not all database management software applications structure a database in the same manner.
Database management applications structure a database by organizing data files, records, and fields in ways that facilitate searching for data, updating data, and generating reports for management. Database applications manage databases through either hierarchical structures or relational structures. A hierarchical database structure arranges data files, records, and fields into formations that resemble the structure of the roots of a tree. As the trunk of a tree leads into major roots, which in turn branch off into entire networks of roots, so a hierarchically structured database begins with a data file (the trunk), which opens onto a number of master records (the major roots), which in turn lead to intricate networks of
other subordinate records.
Input / Output Specifications:
Database applications require users to define an input area for data entry, a criteria area for directing queries, and an output area for directing results. Although database applications usually provide predetermined specifications (also referred to as default settings), users are encouraged to define specifications for these areas that best meet their needs. Input area specifications define data entry procedures. Screen templates can be designed to guide users with data input responsibilities.
Components of Database SystemThe database system can be divided into four components.
Users may be of various type such as DB administrator, System developer and End users.
- Database application:
Database application may be Personal, Departmental, Enterprise and Internal
Software that allow users to define, create and manages database access, Ex: MySQL, Oracle etc.
Collection of logical data.
|Functions of DBMS||Advantages of DBMS||Disadvantages of DBMS|
|1. Provides data Independence||1. Segregation of application program.||1. Complexity|
|2. Concurrency Control||2. Minimal data duplicity.||2. Costly|
|3. Provides Recovery services||3. Easy retrieval of data.||3. Large in size|
|4. Provides Utility services||4. Reduced development time and maintenance need.|
|5. Provides a clear and logical view of the process that manipulates data|
1. 4 MIS Personnel
In large, fully automated hospitality properties, the MIS management staff may consist of a property systems manager and department systems supervisors. Generally, the property systems manager participates in the evaluation, selection, and installation of system hardware and is trained in network operations for specific software applications used throughout the property. The property systems manager, also known simply as the systems manager, provides on-premises systems support and, when necessary, functions as a network administrator and/or an applications software analyst.
Department systems supervisors are typically individuals already employed within a specific department who receive extensive training in the operation of specialty hardware, software, and network components used in the operating departments. Department systems supervisors train others within their operating departments and provide technical support services as appropriate.
The property systems manager has a wide range of responsibilities. More often a generalist than a technician, the systems manager must understand advanced technology (including hardware, software, network, and security components), information processing techniques, and inter-relations of functional areas within the property. Without this understanding, it would be difficult to direct the MIS to meet the specific information needs of managers throughout the property. The systems manager must also be skilled in system vendor relations and provide a reliable and efficient information distribution system for management and staff.
Other duties of a property systems manager include:
- Planning and controlling MIS activities, which include identifying the processing priorities within the system.
- Selecting department systems managers and establishing training programs.
- Managing multi-processor environments, which include developing system configuration and design alternatives in relation to the placement and processing capabilities of system components.
- Designing and implementing information back-up and security controls.
- Oversight of local and wide area networks, including elements of access and security.
1. 6 MIS Security Issues
There are three major areas of MIS security—power backup systems, information backup systems, and information protection. The management of an organization focuses on the risks involved during power failure, information backup procedures, and unprotected information that might pose a potential threat to the hospitality operations. It may so happen that a competing hotel might gain access to the guest history files, which could lead to a hotel losing revenue. However, these can be avoided with proper security systems.
1. Power Backup Systems:
Fluctuation or interruption of power supply can lead to problems in working with computers. This problem can be significantly reduced by using an uninterruptible power supply (UPS). The UPS is equipped with a battery that is placed on the computer's electric line so that if there is any fluctuation in the power line of the computer, it would activate the battery, which would compensate for the energy deficiencies. This battery backup gives the computer continuous power supply. The system automatically recharges the battery as and when a normal power source becomes available.
A preventive maintenance programme is also necessary to protect against system breakdown. There should also be a predetermined emergency maintenance plan, outlining the steps to be followed during a crisis. For example, in addition to power backup systems, there should also be plans for hardware backup availability, that is, sources for quickly obtaining essential parts such as a printer or keyboard.
2. Information Backup Procedures:
Information backup should be a standard operating procedure to ensure that no data is ever lost. There are three main ways of maintaining information backup:
- Redundant copy
- Duplicate copy
- Hard copy
Though many computer manufacturers suggest using more than one backup procedure, it is for the management to ensure that at least one practice is being followed regularly. We will now discuss each procedure in detail.• Redundant copy:
This kind of copy is simultaneously prepared in two storage devices as and when transactions are carried out (the copies are saved in two external storage devices). Since an accounting system employs a disk drive as the base for one external storage device, it also requires a second disk drive. The data is stored in two separate disks, as and when data input is performed. It could be an expensive hardware configuration and requires more attention than other backup methods.• Duplicate copy:
This kind of copy is one of the most popular and efficient means of obtaining information backup. In a duplicate copy, the computer system records data in only one storage device; hence a second disk drive (as is necessary for a redundant copy) is not required. A copy of the data on the single drive can be later made on the same device using a blank disk. The backup tapes are stored and only used in case of disk error or failure; the orderly access to data does not reduce the property's ability to maintain efficient computer operations.• Hard copy:
Printouts from disk files can be used as a backup technique only in combination with either redundant or duplicate copy procedures. A user who relies on only hard copy information backup will face the difficult task of maintaining data files. In this situation, all the information stored on the hard copy has to be manually re-entered to restore the system's database. When a hard copy is used to supplement one of the other two methods of data storage it usually provides the means for troubleshooting any missing or incorrect transactional recording. A hard copy backup is usually taken by the hotels at the end of a day's procedures or after the night audit has been completed. The hard copies are usually filed and a copy is sent to the department heads.
3. Information Protection:
Information protection is much more complicated than power backup procedures or information backup procedures, and should involve strategic considerations. Information must be protected from two major threats—external and internal.• External threats:
Since an organization is connected to external devices through the Internet, there could be instances of some of the data being transferred from the hotel's system to an individual's system. Cybercrime is now a huge threat to society and is caused by criminal or irresponsible action by individuals, making the Internet and other networks vulnerable to its effects. Hacking can be carried out by either an outsider or an employee of the company, who uses the Internet and other networks to steal or damage data and programs.• Internal threats:
To reduce internal threats to the security of information, organizations have passwords and different authorization levels for accessing the data. Security codes (e.g., a multi¬level password system) are being used for security management. In this procedure, passwords are allotted to every individual using the system. Data would be provided as per the authorization level accessibility of the password. Hence, a waiter's password will not have the ability to void a sale or view the sales figures of an outlet, but the manager's password would have access to such data. Routine maintenance of the software and software updates are necessary to avoid transfer of information to unauthorized individuals.
A computer system may also be affected by a virus from either external or internal sources. A virus is an unauthorized programmed code that attaches itself to other programs. Viruses usually enter computer systems through external programs or files.