Computer Notes for ADBL , RBB and NRB

 

Unit 1: Computer system

 

Introduction To Computer Technology

A computer is a multipurpose programmable electronic device that can receive data from the user, process them according to set of commands given to it, provides accurate result and store data permanently. The principal characteristics are:

·         It responds to a specific set of instructions in a well-defined manner.

·         It can execute a prerecorded list of instructions (a program).

·         It can quickly store and retrieve large amounts of data, whenever required.

 

Computer technology is the activity of designing, constructing and programming computers. Computer technology has affected virtually all aspects of life, including the way people communicate ideas, conduct business, and provide education.

 

Types of Computer Systems

There is no clear cut classification of computer. The computers are classified on following four bases.

1.       Working principle

Computers are classified according to how it works i.e. according to the input / output receives / produces by the computer. There are three types of computer and they are:

a)       Analog computer

·         Analog means continuity of associated quantity.

·         A computer that uses the continuously-changeable aspects of physical fact such as electrical, mechanical, or hydraulic quantities to solve the problem.

·         It is designed to process data in which the variable quantities vary continuously.

·         The Speed of analog computer is relatively slow.

·         These computers are not reliable

·         These computers are difficult to operate and use

·         These computers have small or limited memory

·         Generally such computers are very expensive.

·         Such computers were especially useful in the simulation and evaluation of dynamic situations

·         Example: Plesely

b)       Digital computer

·         Digital computers are the computer that performs calculations and logical operations with quantities represented as digits, usually in the binary number system of “0” and “1”

·         Computer capable of solving problems by processing information expressed in discrete form is called digital computer.

·         It can perform mathematical calculations, organize and analyze data, control industrial and other processes.

·         These computers are reliable because it provides accurate result if correct inputs are provided.

·         Digital computers have big memory.

 

·         These computers are easy to use.

·         The processing speed of such computers is very fast.

·         Example: IBM computers

 

c)       Hybrid computer

·         A computer that processes both analog and digital data is called hybrid computer.

·         Hybrid computer is a digital computer that accepts analog signals, converts them to digital and processes them in digital form.

·         A hybrid computer may use or produce analog data or digital data. It accepts a continuously varying input, which is then converted into a set of discrete values for digital processing.

·         Hybrid computers are generally used in scientific applications or in controlling industrial processes

·         These computers are reliable and provide accurate result.

·         These computers are fast and speedy.

·          

2.       Size of computer

a)       Super computer

·         Such computers are fastest, most powerful (in terms of performance and data processing) and most expensive computers.

·         These huge computers are used to solve very complex science and engineering problems.

·         Supercomputer uses parallel processing method to get their processing power i.e. it uses multiple CPUs at the same time on one problem.

·         These are specialized and task specific computers used by large organizations.

·         These computers are used for research and exploration purposes, like NASA uses supercomputers for launching space shuttles, controlling them and for space exploration purpose.

·         Example: CRAY 1, CRAY – 2, Control Data Cyber 205, K Computer, Jaguar, etc

b)       Mainframe computer

·         It is a powerful multi-user computer capable of supporting many hundreds or thousands of users simultaneously.

·         It contains two types of terminals: dumb terminal and intelligent terminal.

·         The dumb terminal doesn’t have its own CPU and storage and generally uses the CPU and storage devices of mainframe system. It consists of monitor and a keyboard to interact with the system.

·         The intelligent terminal has its own processor and can perform some processing operations.

·         Such computers are used in large organizations like banks, airlines, universities as a central host computer; where many users needs frequent access to the same data.

·         Example: IBM S/390, Control Data Cyber 176, UNIVAC 1100/60, etc

c)       Mini computer

·         It is a multiprocessing system capable of supporting from up to 100 users simultaneously

·         It is medium sized computer having lower processing speed and cheaper than mainframe computers.

·         The first minicomputer was introduced in the mid 1960s by Digital Equipment Corporation (DEC)

·         Mini computers are a little slower than mainframe.

·         Mini computers are commonly used as a server in network environment or data processing system in large organizations and hundreds of personal computers can be connected to the network.

·         Generally 3^rd generation computers are mini computers.

·         Example: IBM AS/400,  IBM SYSTEM 360,  HP 3000,  PRIME 9755, etc

d)       Micro computer

·         Microcomputers are the smallest and cheapest of these and are used at home, in schools and in some businesses

·         Such computers are also known as personal computer or simply PC.

·         Microprocessor is used as a main component

·         Micro computers are further divided into three types: Desktop, laptop and palmtop computer.

·         Desktop computers are designed to fit comfortably on top of a desk, typically with the monitor sitting on top of the computer.

·         A small computer that literally fits in our palm is called palmtop computer. The function of such computers are strictly limited, they are used for certain functions such as phone books and calendars.

 

 

 

 

 

Computer Systems concept

Computer system is an organized collection of different components such as input devices, output devices, software etc. in order to operate a computer. The block diagram of a computer system is as follows:

 

A computer system consists of various components. The essential components of computer system are:

1.       Power Supply:

Computer is an electronic device which needs a constant power supply (220 volts) to operate. Generally stabilizer, volt guard or UPS (Uninterruptible Power Supply) are used to regulate power supply. The stabilizer or volt guard are used to amplify the current but doesn’t stores electricity. On the other hand a UPS stores electricity and provides a constant power supply to the computer system for few minutes, even the main power supply has been cut off.

2.       Hardware component:

A computer system consists of many physical parts working together and those physical components, which are visible, touchable and breakable, are collectively known as hardware components. The major hardware components of a computer system are:

a)       Input:

Any device that allows users to communicate and feed data or instruction into a computer is called input device. Data or instructions can be feed in the form of text, audio, video or graphics. It converts human readable signals into its appropriate machine readable signals which can be processed by computer.

 

b)       Output:

Any device which displays or outputs data which has been processed or has been stored on the computer is called output device. It converts machine readable codes into human readable forms. Output devices can provide result in the form of text, audio, video or graphics.

c)       Processor:

The CPU is the main component of a computer system which performs arithmetic and logical calculations as well as controls all the components. A CPU consists of three components: Control unit, register array and arithmetic and logic unit (ALU).

d)       Storage:

Memory devices are used to store data either permanently or temporary. The memory divides are categorized in two groups: Main memory, secondary memory.

e)       Other devices:

Some other devices are: Mother board, Bus, cables, IC, cooling fans, CMOS battery, etc.

3.       Software component:

Software is a collection of interrelated program in order to perform certain task. Computer software can be classified into three groups and they are: system software, application software and programming language and scripting.

a)       System Software

It is essential software which controls the overall activities of a computer system. It is further sub-divided into three groups: operating system, utility software and translator: assembler, interpreter and compiler.

b)       Application Software:

The software which is used to fulfill the requirements of users is known as application software. There are various kinds of application software available in the market and these software’s are classified into two groups: packaged application software and tailored application software.

                  i.            Packaged application software

The software which is developed for targeting some groups are known as packaged application software. Generally such software’s are general purpose application software’s. There are varieties of packaged application software’s and some of them are:

·         Word processing software: MS-Word, Word perfect, Adobe page maker, etc

·         Spreadsheet package: MS-Excel, Lotus 123, etc.

·         Database package: MS-Access, Dbase, Fox Pro, etc

·         Entertainment software: Windows Media Player, etc

                ii.            Tailored application software

The application software developed by a programmer or software expert as per their requirements or demand of individual or an organization is known as tailored application software. Such software’s are also known as customer application software.

Example: Tally, School billing software’s, etc

 

c)       Programming Language and Scripting:

Programming language consists of set of codes in order to write program or software’s. In a computer system there are three kinds of programming language and they are: Machine level language, Low level language and High level language.

 

4.       Humanware:

It is also an essential component of a computer system. A humnaware is a person who operates the computer to perform certain task. S/he may be a software expert, an IT specialist, a programmer, a system analyst or even a naïve user.

Memory (Primary Storage, Secondary Storage, Cache)

A memory is a device which is used to store the data or information’s permanently or temporarily as well as the working area of CPU. There are different kinds of memories used in a computer system and they are classified in two groups. The classification of memory is given in following diagram.

·         Primary memory

·         Secondary memory

1)       Primary memory

The memory which directly interacts with the CPU or the working space of CPU is called main memory. Main memory is used to store:

·         Instruction waiting to be executed

·         Instruction currently being executed

·         Data waiting processing.

·         Data currently being processed.

·         Intermediate data

 

There are two types of primary memories and they are: RAM and ROM.

a)       RAM (Random Access Memory)

RAM stands for Random Access Memory which is made up of semiconductor chip. It is a working space of CPU which holds the program that is currently being running along with the necessary data and instruction. It is a volatile memory because the data remains inside the RAM until the power supply is provided to the computer, when the power supply is cut off the data automatically erases from the memory. It is called Random Access memory because the data can be read from or writes into the memory in random order. We can read data from RAM as well as write into it, so it is also called “read-write” memory. The RAM is again sub-divided into two groups: SRAM and DRAM.

SRAM

·         It stands for “Static Random Access Memory”.

·         The main component of SRAM is flip flop, which doesn’t require a periodic refresh.

·         It is less dense (thick),  and less expensive as compared to DRAM.

·         However, SRAM is much faster than DRAM.

DRAM

·         It stands for Dynamic Random Access memory.

·         Its main storage unit is capacitor, which stores data in the form of charge.

·         The DRAM is dynamic, so it has to be constantly refreshed otherwise the charge will drain and the data will be lost. However we can pack a lot of bits in a very small chip.

·         It is inexpensive memory as compared to SRAM, so it is affordable.

·         It is highly dense, so that it can store lots of bit into a very small chip

·         Commercial implementations of DRAM are: EDORAM, SDRAM, DDR1, DDR2, and DDR3.

Comparison between SRAM and DRAM

SRAM	DRAM
It stands for Static Random Access Memory.	It stands for Dynamic Random Access Memory.
It contains a flip-flop to store data	It contains number of capacitors to store data
It is static because it doesn’t require refreshing circuit to retain data.	It is dynamic so, it requires a refreshing circuit periodically to retain data.
It is used for cache memory	It is used as main memory
It is expensive than DRAM.	It is relatively inexpensive than SRAM.
It is less dense.	It is high dense.
The processing speed is slight slow.	The processing is high.
The memory capacity is very low.	The memory capacity is low
It consumes slight high electricity.	It consumes less electricity

 

b)       ROM (Read Only Memory)

It stands for Read Only Memory that means the contents of such memories are only readable and we can’t write into the memory. It is also made up of semiconductor chips. The data or information’s are stored permanently and can’t be deleted even the power supply has been cut off. So it is also known Non-Volatile memory. It stores such software’s which enables the computer to boot up. There are some programmable memories and they are described in following section.

PROM (Programmable Read Only Memory)

·         It is type of ROM which is blank chip at new and must be programmed.

·         It is programmed by using a special machine called ROM programmer or ROM burner only one time after the manufacturing process by the supplier or the programmer.

·         Once the PROM is written, it can’t be modified and becomes ROM. So it is also called as programmed once and never erased.

·         It is slightly expensive.

EPROM (Erasable and Programmable Read Only Memory)

·         An EPROM is a programmable ROM which is erasable.

·          EPROM is erased by the exposing it to the ultraviolet (UV) light.

·         The erasing process takes about 20 minutes. While erasing the complete data are erased for modification.

·         It is expensive memory.

EEPROM (Electrically Erasable and Programmable Read Only Memory)

·         It is also another kind of programmable ROM which is erasable.

·         This type of chip can be erased and reprogrammed repeatedly with special electrical pulses i.e. the contents are erased with electrical signals instead of UV light.

·         The erasing process is bit/ byte level.

·         It can be erased and reprogrammed directly in the circuit board in which they are installed.

·         It is highly expensive.

Flash memory

·         It is another type of read mostly memory.

·         It is intermediate memory of EPROM and EEPROM in both cost and function.

·         Like EEPROM, flash memory can be erased with electrical signal. The erasing process is block level i.e. the complete block is erased for modification in one or few seconds.

Cache Memory

A cache memory is a small and fast processing memory in memory hierarchy which is placed some where in between main memory and CPU. The access time of RAM (main memory) is not very high as compared to the processing speed of CPU. The CPU has to wait for a long period of time if it would have to fetch data and instructions form main memory. Such waiting time slows downs the performance of the system. Such problem is over come by using a high speed memory called cache memory which is pronounced as “cash”. The access time of a cache memory is closer to the processing speed of CPU. It acts as a high speed buffer between CPU and main memory.

A cache memory may be and internal or external. The internal cache memory is placed inside the CPU whereas the external cache memory is placed outside the CPU. The cache memory holds frequently used data and instructions and so that it can provide CPU at the fast rate. The cache memory is shown in following figure. In this figure, we can see that the cache memory is placed between main memory and CPU.

The cache memory is also made up of semi-conductor chips. It is a volatile memory and the contents can be accessed randomly.

Modern computer systems are also designed to have multiple levels of caches: Level 1, Level 2 and level 3 caches also called L1, L2 and L3 respectively. L1 cache is smaller than L2 cache and it is the fastest cache and it usually contains inside the CPU and is used to store more frequently accessed data and information’s as compared to those in L2 cache. The L1 cache is typically smaller in size than other caches and uses high speed SRAM. The L2 cache comes in between L1 and L3 cache.

 

CPU – Central Processing Unit

CPU is a device that organizes and executes the instructions. The central processing unit (CPU) of a computer is a piece of hardware that carries out the instructions of a computer program. It performs the basic arithmetical, logical, and input/output operations of a computer system. The working mechanism of a CPU is similar to the brain of human. The primary goal of CPU is to execute instructions and control the operation of all other components such as: main memory, input devices and output devices.

Function of CPU:

CPU has four primary functions: fetch, decode, execute and writeback.

·         It receives data as input.

·         Follows instruction, and processes data accordingly.

·         Presents the information as output to the user.

·         Its primary function is to execute programs.

·         It controls and coordinates all components such as memory, input and output devices.

 

Components of Processor

A CPU consists of three main components and they are:

a)       Arithmetic and Logic Unit (ALU)

It performs arithmetic and logical calculations and controls the speed of those operations as directed by CPU.

b)       Register array

Registers are small and speedy memory units inside a CPU which stores data temporarily. There are number of registers in a CPU and some of them are:

·         MAR (Memory Address Register): It holds the memory locations addresses.

·         MBR (Memory Buffer Register): It holds the contents of active memory locations.

·         AR (Accumulator Register): It holds the data to be operated, intermediate results, and results of processing.

·         IR (Instruction Register): It holds current instruction being executed.

·         IOR (Input Output Register): It is used to communicate with input and output devices.

 

c)       Control Unit (CU)

·         It directs the movement of electrical signals between main memory and ALU.

·         It controls and manages all other devices connected to the CPU.

·         It also co-ordinates and controls the flow of manipulation of all data and information’s i.e. it acts as nerve center of computer system.

·         The control unit calls upon the arithmetic logic unit to perform the necessary calculations.

Hardware (Input Devices, Output Devices)

Keyboard

• It is a primary input device.
• The keyboards are used to input data as well as instructions.
• It is similar to typewriter, which consists of various kinds of keys mounted on a board.
• A keyboard consists of at least following keys:

Ø  Alphanumeric keys: A to Z and 0 to 9

Ø  Function keys: F1, F2, …., F12

Ø  Navigation keys: Arrows, Delete, Insert, Pg Up, Pg Down, etc

Ø  Control keys: Alt, Ctrl, enter, Shift, tab, space, etc

• According to the connection point, a keyboard may be: serial keyboard, PS/2 Keyboard, USB keyboard, Wireless keyboard

Mouse

·         It is a small hand held input device, which is used to point any computer components as well as to activate the buttons.

·         At upper part of a mouse there are at least two buttons and a rubber ball, wheels or axels at the bottom of the mouse.

·         According to the connection point, a keyboard may be: serial mouse, PS/2 mouse, USB mouse, Wireless mouse.

·         It may be used fro design works such as drawing.

Joystick:

·         It is also a pointing device which is used to move the cursor around screen.

·         It consists of a fixed base and a movable stick in which button is mounted to active the buttons.

·         The stick or liver can be rotated in any direction: left right, up or down from the center.

·         It is used for playing games.

Track Ball:

·         It is also a pointing device.

·         It consists of fixed base and a movable ball which is spinned by finger tip or palm in any direction to move the cursor around the monitor.

·         Generally it is attached with a mouse or keyboard.

Light Pen

·         It is a pencil shaped device that is used to select screen position.

·         It is an input device that utilizes a light-sensitive detector to select objects on a display screen.

·         We can draw any objects directly onto the screen, but this can become uncomfortable,

·         The pen works with CRT monitors but is not as compatible with projectors, LCD screens and other display devices.

·         They are ergonomically designed for ease of hand movement and are excellent for all drawing and pointing tasks.

·         They can be very tiring to the hand if overused.

OMR

·         It stands for Optical Mark Reader.

·         It is used to scan the presence of the marks: circle, square, etc created by pens or pencils.

·         It reads the marks using light concept.

·         It records the date data

OCR

·         It stands for Optical character reader

·         It is used to scan text written on a paper.

·         It can scan or read only special type of fonts. Such patterns are stored in the program and scanned texts are compared with those patterns, it accepts the text if it matches, otherwise rejected.

·         It is used in airlines, post office, banks etc to read the codes.

MICR:

·         It stands for magnetic ink character reader.

·         It is similar to OCR, but it reads the texts, which are written by using special ink called magnetic ink.

·         It can scan or read only special type of fonts, such patterns are stored in the program and scanned ink are compared with those patterns, it accepts the text if it matches, otherwise rejects.

 

BCR

·         It is an electronic device that can read and output printed barcodes to a computer.

·         The most commonly used bar code is Universal Product Code (UPC). The UPC codes uses a series of vertical bars of varying width. These bars are detected as ten digits. The first five digits identify the suppliers or manufacturers of the item and the second five digits identify individual product. The code also contains a check digit to ensure that the information read is correct or not.

Output device:

An output device is a device which receipts information’s from CPU and displays those information’s either on printed or non-printed form. In other words a device which converts the information of machine readable form into human readable form is known as output device. There are two types of output device and they are: soft-copy output device and Hard-copy output device.

Monitor

A monitor is a primary output device which can provide all the form of outputs. A monitor may be either monochrome or color. There are different kinds of monitors. Some commonly used monitors are:

·         CRT monitor

·         LCD Monitor

·         LED Monitor

a)       CRT Monitor:

·         It is commonly used output device which is generally used in desktop computer.

·         It consists of a vacuum tube and its basic structure is shown in following diagram.

·         When electricity is provided to the monitor, the electron gun produces the beams of rays which passes through the focusing elements and deflecting coil and strikes on the phosphorous coated screen. The part, where the ray strikes, are only visible to the users.

·         According to the number of phosphorous layers a monitor may be monochrome or color. In a monochrome screen, only a single colored layer of phosphorous is coated where as RGB colored layer are present on the color monitor.

 

b)       LCD Monitor:

·         LCDs (Liquid Crystal Display) are displays that use liquid crystals sandwiched between two sheets of polarizing material. The images are displayed when electrical charge is applied to the crystals. The front plate is transparent and the back plate is reflective in nature.

·         When electricity is provided between the segments, the back plate creates an electric field that makes a change in the transmission of light through the reason under those segments.

·         The basic structure of a LCD monitor is shown in following diagram.

c)       LED Monitor:

It consist number of light emitting diodes which are arranged in a specific structure. The LED monitors may be of: 7^th segment LED monitor, 18^th segment LED monitor, Dot matrix LED monitor

Comparison between CRT and LCD monitor:

Characteristics	LCD Monitor	CRT Monitor
Thickness	Minimum 1 inch; Pretty slim	Bulky due to the heavy back
Weight	Lighter	Heavier
Image quality	Slight less sharp images	Sharper images
Energy consumption	Less	More
Refresh rate	Needs refresh rate (72Hz minimum)	No refresh rate (fixed at 7 Hz)
Price	Expensive compared to CRT	Less expensive
Effect on eye	Doesn’t effect	Effects
View angle	Depends on technology	Wide

 

 

 

 

Printer

A printer is a hard copy output device which is used to print data or information on a paper. Such devices are computer controlled devices.

A printer can be classified on following basic:

·         Speed of the printer

·         Technology used to print

1.       Speed of the printer

According to the number of characters printing at a time, a printer is classified into following three groups:

·         Character printer

·         Line printer

·         Page printer

a)       Character printer

·         It prints a character at a time

·         It is non-flexible printer.

·         The speed lies in between 30 to 600 cpm.

·         Examples: chain printer, drum printer, daisy printer

b)       Line printer

·         It prints a line of characters at a time

·         It is non-flexible printer.

·         The speed lies in between 40 to 2400 lpm.

·         Examples: chain printer, drum printer, daisy printer

c)       Page printer

·         It prints a page of characters at a time

·         It is a flexible printer.

·         The speed lies in between 14 to 24 ppm.

·         Examples: laser printer

2.       Technology used to print

According to the technology used, a printer can be classified into two groups and they are:

a)       Impact printer

b)       Non-impact printer

Comparison between Impact and non impact printer:

Characteristics	Impact Printer	Non-impact printer
Printing method	It consists of a hammer or pins which strikes against the ink filled ribbon and the corresponding text are formed on a paper backside the ribbon	It uses ink spray, laser beam, heating or light technology to produce text or image on a paper
Printing quality	Relatively low	High
Flexibility	Non-flexible	Flexible
Noise	Very noise	Less noisy or noiseless
Printing speed	Relatively low	High
No of copies	Multiple copies at a time using carbon paper	Single copy
Cost (including additional cost)	Less expensive	Expensive
Examples	Dot matrix printer, drum printer, chain printer	Inkjet printer, laser printer, etc

 

Software and Its Classification

Software, also called a program, consists of a series of related instructions, organized to full fill the requirements of the user. It also tells the computer what tasks to perform and how to perform them. The classification of software is shown in following diagram

System Software: OS, Language Processor

System software consists of the programs that control or maintain the operations of the computer and its devices. System software serves as the interface between the user, the application software, and the computer’s hardware.

a)       Operating System An operating system is a set of programs that coordinates all the activities among computer hardware devices. It provides a means for users to communicate with the computer and other software. Many of today’s computers use Microsoft’s Windows, or Mac OS, Apple’s operating system. When a user starts a computer, portions of the operating system are copied into memory from the computer’s hard disk. These parts of the operating system remain in memory while the computer is on.

 

b)       System utilities are programs that have been written to complete common tasks such as sorting records, checking the reliability of diskettes, and creating directories and subdirectories. They also restore accidentally erased files, locate files within the directory structure, manage memory usage, and redirect output.

 

c)       Language processor or translator is a system program that is used to translate any other programming languages into its equivalent machine level codes. There are three types of language processors. They are: assembler, interpreter and compiler.

Operating system

Operating system is a set of program that manages computer hardware resources and provides common services for application program. In other words, an OS is defined as set of programs that controls the overall operation of the computer. It manages the resources of a computer system and schedules its operation. It also acts as a mediator between the user and computer hardware. An OS hides the complexity about hardware and presents a simple interface to the user or programmer i.e. it interprets the commands of user to the hardware and presents the output to the user in suitable format provided by the hardware. It is a backbone of a computer system.

Operating Systems have been developed for two main purposes:

·         To schedule computational activities for good performance of the computing system i.e. it allows the computer system resources to be used in an efficient manner (Resource Manager)

·         To provide a convenient environment for the development and execution of the programs i.e. user (extended) machine.

OS as a Resource manager:

A computer consists a set of resources for the movement, storage, and processing of data and for the control of these functions. The OS is responsible for managing these resources. Many resources can be conflicted while requested by various users; the OS is responsible how to allocate them to specific programs and users so that it can operate the computer system efficiently and fairly i.e. To manage the computer resources most effectively the OS decides which program should run at what time, how much memory should be allocated for an execution of a program, where to save the file so that disk space can be optimally utilized etc

Summary:

·         The primary task of OS is to keep track of who is using which resource, to grant resource requests, to mediate conflicting requests from different programs etc.

·         Users often need to share not only hardware, but information (File, Database) as well.

OS as a user (Virtual) Machine:

A computer system consists of one or more processors, main memory and many types of I/O devices such as disk, tapes, terminals, network interfaces, etc. Writing programs for using these hardware resources correctly and efficiently is an extremely difficult job, requires depth knowledge of functions of such resources. Hence to make computer systems usable by a large number of users, OS provides a mechanism to shield programmers and other users from the complexity of hardware resources. This problem is solved by putting a layer of software on top of the bare hardware. This layer of hardware manages all hardware resources of the system, and presents the user with an interface or virtual machine that is easier, safer and efficient to program and use i.e. an OS hides details of hardware resources from programmers and other users.  It provides a high level interface to low-level hardware resources, making it easier for programmers and other users to use a computer system.

In above figure, OS layer surrounds hardware resources. Then a layer of other system software (such as compiler, interpreter, editors, utilities, etc) and a set of application software (such as commercial data processing applications, scientific and engineering applications, entertainment and educational applications, etc) surrounds OS layer. Finally end users view the computer in terms of the user interfaces of the application programs.

 

Function of Operating System

a)       Job Scheduling

Job is a collection of one or more related programs and their data. An OS prepares schedules, controls and monitors the jobs submitted for execution in an efficient manner. It can adopt various job scheduling strategies such as: LIFO, FIFO, MRU, LRU, Round robin etc.

 

b)       Interrupt handling

An interrupt is signal to a computer that stops the execution of running programs so that another program can be executed. An OS manages various kinds of interrupts generated by hardware or software components.

The interrupt signals that can be masked i.e. ignored by the processor while performing its operations is called mask able interrupt. Generally the maskable interrupts are the interrupts that comes form the peripheral device e.g. Mouse click, memory read etc. The non-maskable interrupts are the interrupts that can not be ignored they need to serviced. Generally such types of interrupts are specified to be software interrupts. Example: power failure, software corrupted etc

 

c)       Memory management

A computer system consist number of memories which has to be managed efficiently. OS has a part called memory manager for managing all memories. It allocates main memory and second memory to the system programs or any other programs whenever required for execution. For any program to run, it must be loaded into the main memory but the main memory has limited storage capacity. In multiprogramming system, multiple jobs are executed simultaneously, which has unlimited size and main memory is unable to load all the programs at once. An OS uses the secondary memory storage device for few time period, which acts as a main memory and programs are executed through it. This process is known as virtual memory.

 

d)       Process management:

In multiprocessing environment, operating system allows more than one application (or process) to run simultaneously. Process management is a part of an operating system which manages the processes in such a way that system performance can be enhanced.

A process is an activity that needs certain resources to complete its task. Various computer resources are CPU time, main memory, and I/O devices. These resources are allocated to the processes and based on decision that which process should be assigned for the allocation of resource and this decision is taken by process management implementing the process scheduling algorithm.

The five major activities of an operating system in regard to process management are:

·         Creation and deletion of user and system processes.

·         Suspension and re-activation of processes.

·         A mechanism for process synchronization.

·         A mechanism for process communication.

·         A mechanism for deadlock handling.

 

e)       Swapping:

It is a process of transferring a block of data from secondary storage to main memory or vice-versa. When data are transferred from secondary storage to main memory is called swap in of data and when data is transferred from main memory to the secondary storage is called swap out of data. It is an application of virtual memory.

 

f)        Paging

Paging is the mechanism of partitioning all the processes and physical memory in equal sized page frames and pages. In this mechanism all processes are partitioned into pages and reside on secondary storage. The physical memory is also partitioned into page frames of same size. Now the swapping is used to swap in the pages into respective page frames for execution and after certain time period they are again swapped out to the secondary storage. There is another concept called demand paging in which only the process that are currently needed in memory for its execution are swapped in instead of loading an entire process before its execution.

 

 

 

 

g)       Security / Protection

Protection refers to mechanism for controlling the access of programs, processes, or users to the resources defined by a computer system i.e. It is an ability to authenticate the users for an illegal access of data as well as system. It is the most demanding feature of an operating system.

Operating system provides various services for data and system security by the means of passwords, file permissions and data encryption. Generally computers are connected through a network or Internet link, allowing the users for sharing their files accessing web sites and transferring their files over the network. For these situations a high level security is expected. E.g. software firewalls.

If a computer system has multiple users and allows the concurrent execution of multiple processes, then the various processes must be protected from one another's activities.

 

h)       File management

A file is a collection of related information defined by its creator. Computer can store files on the disk (secondary storage), which provide long term storage. Some examples of storage media are magnetic tape, magnetic disk and optical disk. Each of these media has its own properties like speed, capacity, and data transfer rate and access methods.

A file system is normally organized into directories to make ease of their use. These directories may contain files and other directories. Every file system is made up of similar directories and subdirectories. Microsoft separates its directories with a back slash and its file names aren't case sensitive whereas Unix-derived operating systems (including Linux) use the forward slash and their file names generally are case sensitive.

 

The main activities of an operating system in regard to file management are creation and deletion of files/ folders, support of manipulating files/ folders, mapping of files onto secondary storage and taking back up of files.

 

i)        Input Output device management

Input/ Output device management is a part of an operating system that provides an environment for the better interaction between system and the I/O devices (such as printers, scanners tape drives etc.). To interact with I/O devices in an effective manner, the operating system uses some special programs known as device driver. The device drivers take the data that operating system has defined as a file and then translate them into streams of bits or a series of laser pulses (in regard with laser printer).

A device driver is a specific type of computer software that is developed to allow interaction with hardware devices. Typically this constitutes an interface for, communicating with the I/O device, through the specific computer bus or communication subsystem that the hardware is connected with. The device driver is a specialized hardware dependent computer program that enables another program, typically an operating system to interact transparently with a hardware device, and usually provides the required interrupt handling necessary for the time dependent hardware interfacing.

 

Unit 2: Foundation of information system

 

Data and Information

Data is a collection of facts, such as numbers, words, measurements, observations or even just descriptions of things i.e. data is raw (unprocessed), unorganized facts and figures without any added interpretation or analysis that need to be processed. Data can be something simple and actually random and useless until it is organized. Data can be qualitative or quantitative.

The Oxford American Dictionary defines data as: "facts or information to be used as a basis of discussing or deciding something."  At the same time information is defined as "facts told or discovered or facts to be fed to a computer". 

Information are the data that are processed, interpreted, organized, structured or presented so as to make them meaningful or useful i.e. information is data that has been interpreted so that it has meaning for the user. According to Davis and Olson - "Information is a data that has been processed into a form that is meaningful to recipient and is of real or perceived value in the current or the prospective action or decision of recipient."

 

But these terms have radically different meanings in the information processing or management literature.  Data are collection of observations, which may or may not be true.  Thus data may not be facts.  Data become information when they are processed.  To process data one needs to:

·         Clean the data from errors and reduce sources of unreliability,

·         Analyze data to make it relevant to decision at hand, and

·         Organize data in ways that help understanding. 

 

Knowledge is a combination of information, experience and insight that may benefit the individual or the organization

Example:

·         Each student's test score is one piece of data. The average score of a class or of the entire school is information that can be derived from the given data.

·         The history of temperature readings in dhangadhi for the past 5 years is data. If this data is organized and analyzed to find that rising temperature of dhangadhi, then that is information.

Information quality (characteristic):

The information should be reliable and valid. Some of the attributes of information are:

1.       Timeliness: - It means that the information must reach the recipient within the prescribed time frame. For effective decision- making, information must reach the decision-maker at right time. Delays of whatever nature destroys the value of information. Timely information means timely as well as up-to-date information.

2.       Relevance: - Information is said to be relevant if it answers especially for the receipt what, when, where, who and why? The available information needs to be updated all the time, so that it could match its current utility.

3.       Adequacy: - It means information must be sufficient in quantity. The information should not give inadequate or more than adequate information, which may create a difficult situation for the decision makers.

4.       Accuracy: - It means that information is free from mistakes & errors is clear and accurately reflects the meaning of data on which it is based. It conveys an accurate picture to the recipient. Accuracy also means that the information is free from bias. If MIS supplies accurate information the confidence of the managers will be strengthened and as a result, system implementation will be success.

Types of information:

Information could be classified on the basis of the purpose for which it is utilized, into 3 main categories:

·         Strategic information.

·         Tactical information.

·         Operational information.

1.       Strategic information: It is required by the managers at the strategic level of management for the formulation of organizational strategies. This relates to long term planning policies of organization as a whole.

For e.g.: Information pertaining to new technology, new products, competitors etc.

Top managers need following information:

·         Information to generate regular reports.

·         Information which would assist in identifying problem areas and opportunities.

Typically they need information which would assist in analysis, planning & reporting.

2.       Tactical information: Such information is used in short-term planning and is used at management control level. This type of information is generally based on data arising from current activities of the organization. However, some tactical information such as competitor information may arise from external sources to the organization.

For sales analysis and forecasts, production resource requirements, annual financial statements etc.

Middle managers need following information:

·         Information to identify factual (accurate) or non-factual details.

·         Information to generate exception reports.

3.       Operational information: It applies to short periods which may vary from an hour to few days. It is generally used by decision-makers at the operational level. It is often required for taking immediate actions. The source of such information is usually current activity data.

For e.g.: Current stocks in hand, work in progress levels, outstanding orders from customers etc.

It is for monitoring the firm's daily activities. Lower managers are concerned primarily with the result of past operation and with conducting current operations. Lower manager's decisions usually are repetitive & structured.

They need following information:

·         Information to obtain operational data.

·         Information to assist in scheduling of activities.

·         Information to identify out of control situations.

·         Information to generate performance & daily transaction report.

 

 

 

Data processing

Data processing is an operation performed on a given set of data to extract the required information in an appropriate form i.e. it is a process of manipulation of input data with an application program to obtain desired output as an audio, video, graphic or text data. In other words, data processing is manipulation of data by a computer. It includes the conversion of raw data to machine-readable form, flow of data through the CPU and memory to output devices, and formatting or transformation of output. Any use of computers to perform defined operations on data can be included under data processing. In the commercial world, data processing refers to the processing of data required to run organizations and businesses.

A data processing system is a combination of machines, people, and processes that for a set of inputs produces a defined set of outputs. The inputs and outputs are interpreted as data, facts, information. depending on the interpreter's relation to the system.

A data processing system may involve some combination of:

·         Conversion: converting data to another format.

·         Validation: – Ensuring that supplied data is "clean, correct and useful.

·         Sorting: arranging items in some sequence and/or in different sets.

·         Summarization: – reducing detail data to its main points.

·         Aggregation: – combining multiple pieces of data.

·         Analysis: – the collection, organization, analysis, interpretation and presentation of data.

·         Reporting – list detail or summary data or computed information.

·         Example: scientific data processing, commercial data processing, etc

Concept, Characteristics and need of IS

The word system is taken from Greek word "Systema" which means an "organized collection". Hence a system is a collection of elements or components that are organized for a common purpose. The elements are interrelated and interdependent. A system is a group of interrelated components working together towards a common goal by accepting inputs and producing outputs in an organized information process. For e.g.: A business organization can be considered as a system, in which the parts (division, departments, sections, units, etc) are joined together for common goal.

Human body represents a complete natural system. We are also bound by many national systems such as political system, economical system, educational system etc

Elements of a system:

Above figure illustrates a typical system having input, processor, output, feedback, environments as its elements i.e. a system consists of following basic elements:

a)       Input

Input may be defined as the start-up component on which the system operates.

 

b)       Process

The process is the transformation activity that converts the inputs into the output.

 

c)       Output

Output is defined as the result of an operation. It is the end result of a system, and it represents the objective of a system.

 

d)       Feedback

Feedback control is defined as the system function that compares output with a model or standard i.e. it is the function that provides information on the deviation between output and the prescribed standards and delivers this information as input the process form which output is obtained.

Let us consider a business organization system. The certain data about something such as customers, inventory etc is input for the system. Information such as number of customers, total sales, inventory status, etc is the output. The actual classification of the data, its sorting, summarizing and calculating by people or through some other means represents processing of the data. People, machines, functions, operations, and the combinations of these act as processors. The effectiveness of the decision is regarded as feedback of the system.

Fundamental resources (Components) of information system

Information system is on organized combination of people, hardware, software, communication networks and data resources that collects, stores, and process data as well as delivers information, knowledge in an organization. In other words, an information system is a combination of hardware, software, infrastructure, and trained personnel organized to facilitate planning, control, coordination and decision making in an organization. An effective IS (Information System) is needed for successful implementation of an organization. Because, an organization does not operates in a vacuum. It must coordinate its operation with the business universe. It is important to collect information about markets in which it operates, current knowledge of its customer and competitors, availability of capital, capabilities of available personnel and knowledge concerning source of supply i.e. business firms and other organizations rely on information systems to carry out and manage their operations, interact with their customers and suppliers, and compete in the marketplace.

 

An IS model that express a fundamental conceptual framework for the major components and activities of information systems.

An IS depends on following five essential components.

a)    People resources                  b)    software resources               c)     hardware resources

d)    Network resources               e)     Database and warehouse resources

a)       People resources:-

The primary purpose of an information system is to provide valuable information to managers and users within and outside the organization. The success or failure of a system usually depends on whether users are satisfied with the system’s output and operations. They are the users who uses the system normally, these are two types of users available to use the system according to they have.

·         IT specialist:         IT specialists are the persons who develop and operate information system. They includes: system analyst, programmer and it managers.

·         End user: - End users are people who use an information system or the information it produces.

i)         Internal users: - employee, customers, vendors, and others who interacts with IS.

ii)       External user: - customer who track their orders or the company’s website, Supplies that use a customer system to plan their manufacturing schedules,  Employees who log on the company’s intranet from home to check their e-mail messages.

b)       Hardware resources:

It is simply physical equipment that helps to process and store the required information of any type of system.

Machines      : -    It includes physical devices, peripherals devices, computers, scanners, digital capture devices printers etc.

Media            : -    It includes: floppy disk, magnetic disk, optical disks

c)       Software resources:

Software is a collection of computer programs and related data that provide the instructions telling a computer what to do. It comprises the entire set of programs, procedures and routines associated with the operation of a computer system. A set of instructions that directs computers hardware to perform a task is called a program or software. It is classified into 3 major classes:

·         System software:         It includes operating system, that is used to controls and supports the operation of computer system

·         Application software: It includes software’s that are used to store, manage, and operate information system i.e. to perform a particular task.

d)       Network / Telecommunication resources:

It is the path through which signals from one device to another.  Normally it consists of communications media (twisted pair cable, optical fiber, satellites, etc), communication processors, and network access and control software. Telecommunications are used to connect, or network, computer systems and transmit information. Such resources are essential to the successful e-business and commerce operations of all types of organization.

e)       Data / Database

Data are raw facts that are used by programs to produce useful information. Databases are organized collections of interrelated data used by applications software. Databases are managed by systems software known as database management systems (DBMS) and shared by multiple applications.

Potential risks of information system

Risk is the potential harm that may arise from some current process or from some future event.  Risk is present in every aspect of our lives and many different disciplines focus on risk as it applies to them. From the IT security perspective, risk management is the process of understanding and responding to factors that may lead to a failure in the confidentiality, integrity or availability of an information system. IT security risk is the harm to a process or the elated information resulting from some purposeful or accidental event that negatively impacts the process or the related information.

Risk management is nothing new. There are many tools and techniques available for managing organizational risks. There are even a number of tools and techniques that focus on managing risks to information systems.

Threats:

Information systems are frequently exposed to various types of threats which can cause different types of damages that might lead to significant financial losses. Information security damages can range from small losses to entire information system destruction. A threat can be caused by internal, external or both external and internal entities.

a)       Internal threats: It occurs when someone has authorized access to the network with either an account on a server or physical access to the network. A threat can be internal to the organization as the result of employee action or failure of an organization process.

b)       External threats: It can arise from individuals or organizations working outside of a company. They do not have authorized access to the computer systems or network. The most obvious external threats to computer systems and the resident data are natural disasters: hurricanes (storms), fires, floods and earthquakes. External attacks occur through connected networks (wired and wireless), physical intrusion, or a partner network

Threat agents

The threat agent is the actor that enforces the risk to the system. There are three classes of threat agents: humans, natural disasters and technological threats.

a)       Human Threats: This class includes threats caused by human actions such as insiders or hackers which cause harm or risk in systems.

b)       Environmental factors: Such threats are caused by non human agent such as natural disaster threats like earthquakes, flood, fire, lightning, wind or water and, also, due to animals and wildlife which cause severe damage to information systems. This class also includes other threats such as wars, and terrorist attacks

c)       Technological Threats: Technological threats are caused by physical and chemical processes on material. Physical processes include the use of physical means to gain entry into restricted areas such as building, compound room, or any other designated area like theft or damage of hardware and software. However, chemical processes include hardware and software technologies. It, also, includes indirect system support equipment like power supplies

Some of the possible threats related to the information system are:

a)       Accidental disclosure (leak): The unauthorized or accidental release of classified, personal, or sensitive information is known as accidental disclosure, which may create many serious problems in an organization.

b)       Acts of nature:  It relates to all types of natural occurrences such as earthquakes, storm, and floods etc that may damage or affect the system / application.

c)       Alteration of data / software: It refers to an intentional modification, insertion, deletion of any software’s; application software of operating software either by an authorized or unauthorized user. It is generally done to leak confidentiality, availability, or integrity of data, programs, system, or resources controlled by the system. This also includes malicious code, such as logic bombs, Trojan horses, trapdoors, and viruses.

d)       Bandwidth usage: The accidental or intentional use of communications bandwidth for other then intended purposes i.e. the illegal usage of bandwidth which disturb the smooth operation of the system when it requires full bandwidth to transfer or receive information’s.

e)       System configuration error: The error which may occur during the initial installation or upgrade of hardware, software, communication equipment is system configuration error. Such errors are due to illegal or pirated software.

f)        Telecommunication malfunction / interruption: Any communications link, unit or component failure sufficient to cause interruptions in the data transfer via telecommunications between computer terminals, remote or distributed processors, and host computing facility.

g)       Electrical Interference/ Disruption: An interference or fluctuation may occur as the result of a commercial power failure. This may cause denial of service to authorized users (failure) or a modification of data (fluctuation).

Vulnerability

It means error or weakness in system’s security procedures, design, implementation or internal controls that could be exercised and result in a security break or a violation of the system’s security policy. A threat is a person or event that has the potential for impacting a valuable resource in a negative manner. Vulnerability is that quality of a resource or its environment that allows the threat to be realized. An armed bank robber is an example of a threat. A bank teller is an example of a valuable resource that may be vulnerable during a bank robbery.

Vulnerability may also refer to any type of weakness in a computer system itself, in a set of procedures, or in anything that leaves information security exposed to a threat.

Vulnerability of Information Systems is a major concern these days in all spheres of Financial, government, private sectors. Security of the Information Systems is one of the biggest challenges faces by almost all the organizations in today's world. Even though most of the organizations have realized the value of information and the part it plays in the success of the business, yet only a few take adequate measures in ensuring the security of their information, preventing unauthorized access, securing data from intrusion and unapproved disclosures etc. The impact any business is going to bear, in case any of the information system is compromised or goes down, is great; hence ensuring stability and security of these information system is of paramount importance to these businesses.

Some example of vulnerabilities related to contingency planning / disaster recovery:

·         Lack of clearly defined, tested contingency plan

·         Lack of information backups

·         Inadequate information system recovery procedures, for all processing areas

Computer users and network personnel can protect computer systems from vulnerabilities by keeping software security patches (area) up to date. These patches can cure errors or security holes that were found in the initial release. Computer and network personnel should also stay informed about current vulnerabilities in the software they use and seek out ways to protect against them.

Risk Management:

There are four basic strategies for managing risk: mitigation, transference, acceptance and avoidance.

a)       Mitigation:  It is the most commonly considered risk management strategy. It involves fixing the flaw or providing some type of compensatory control to reduce the likelihood or impact associated with the flaw. A common mitigation for a technical security flaw is to install a patch provided by the vendor. Sometimes the process of determining mitigation strategies is called control analysis.

b)       Transference: Transference is the process of allowing another party to accept the risk on our behalf. Car, health and life insurance are all ways to transfer risk. In these cases, risk is transferred from the individual to a pool of insurance holders, including the insurance company. Note that this does not decrease the likelihood or fix any flaws, but it does reduce the overall impact (primarily financial) on the organization.

c)       Acceptance: Acceptance is the practice of simply allowing the system to operate with a known risk. Many low risks are simply accepted. Risks that have an extremely high cost to mitigate are also often accepted. Beware of high risks being accepted by management. Ensure that this strategy is in writing and accepted by the manager(s) making the decision. Often risks are accepted that should not have been accepted, and then when the penetration occurs, the IT security personnel are held responsible. Typically, business managers, not IT security personnel, are the ones authorized to accept risk on behalf of an organization.

 

 

Types of information system (TPS, DSS, ESS)

An information system is categorized as:

1.       Operational Information system:

Operational source is primary source of data for other system and includes much minute, specific information. Operational level systems supports, operational managers by keeping track of elementary activities and transmission of the organization such as cash deposit, cash withdrawal, balance transfer etc.

There are different activities on operational level major activities are process control systems and enterprises collaboration system.

There are two parts on operational IS and they are:

·         Transaction processing system (TPS) and

·         Knowledge work system (KWS) and Office Automation System (OAS)

 

a)       Transaction processing system (TPS)

TPS is a typical operational level system. A TPS is a computerized system that performs and records daily routine transaction necessary to conduct the business. The primary purpose of a transaction processing systems is to record, process, validate and store transaction that take place in various functional areas of business. Transaction can be internal or external.

There are six steps in processing transmissions. 

         i.            Data Entry: - Data entries to the transactions are taken as input by the system. Transaction data must be first entered into the systems. Transaction data must be first entered in to the systems. A number of input devices such as keyword and mouse are used for data entry. E.g.  A cash/cheque receipt for a bank transaction becomes the source document for updating a bank passbook.

        ii.            Data validation: - It is essential in TPS. It ensures the occurrence of data by companying actual data with pre determine standards or known results.  There are two steps in validation: error detection and error correction.

      iii.            Data processing and Revalidation: - The validity data taken as I/p are processed by the systems once it is complete, the o/p should be revalidated for accuracy and reliability. There for validation should be done before (to check I/p validity) & after (to check o/p validity) the data is processed.

      iv.            Data storage: - Data after being processed are stored systematically, so that they can be extracted whenever required. Magnetic tape, disc are used for data storage.

       v.            Output generation: - The o/p can be communicated to the decision maker. It generates outputs, which may be in the form of reports, lists, tables etc. the reports generated by TPS are fundamental source for other systems.

      vi.            Query report: - Query is the request send by the user to the database to get some specific information. It enables the user to get the required information that has been stored in the database.

Roles of TPS in organization: - 

The activities are needed to capture & process data or the operation of a business. So TPS plays a virtual role in supporting the operation of an organization. TPS update organizational file t& database and produce variety of information products for internal and external use.

Main activities of typical organization are:

ü  Pay checks are calculated, printed and distributed each weeks or days.

ü  Sales invoices are verified, calculated, printed and mailed each month.

ü  Purchase orders are verified, calculated, printed each day.

ü  Checks to vender are calculated, printed each day.

ü  Potential customers are identified and called each day.

ü  Parts manufactured are scanned, viewed and inspected for faults continuously.

b)       Knowledge work system (KWS) and Office Automation System (OAS)

It is the IS that helps knowledge worker in the creation and integration of new knowledge in the organization. It serves information needs at the knowledge level of organization. In general knowledge worker are peopled who hold formal university degrees and who are often member of recognized profession like engineers, doctors, lawyers, scientists, IT professionals, system analyst etc. The job is for creating the information and knowledge for scientific and engineering design. Data worker typically here less formal, advanced educational degrees and tend to process rather than create information. Office automation system is the IT to increase the productivity.

2.       Management Information system:

MIS is a computerized business processing system, generating information for the people in the organization to meet the information needs for decision making to achieve goals and objectives of an organization.

MIS is a computer based IS which deals with:-

·         Handling of a voluminous data

·         Quick search and retrieval

·         Mass storage

·         Complex processing of data and multidimensional analysis

·         Confirmation of the validity of data and transaction

·         Fulfilling the change needs of the information

·         It provides information to support managerial functions like planning, organizing, directing, controlling and staffing.

 

3.       Intelligent / Strategic Information system:

System which facilitates decisions for the strategic level of the organization requiring the use of knowledge, intuition, experience and expertise is called intelligent support system. Strategic information system (SIS) is adopted by senior managers to make decisions.

There are different kinds of SIS.

·         Decision Support System (DSS):

·         Executive Support System (ESS):

·         Artificial Intelligence (AI)

·         Expert System (ES):

a)       Decision Support System (DSS):

A DSS is highly flexible and interactive IT system that is designed to support decision making when the problem is not structured. A DSS is an association between us, the decision maker and specialized support provided by IT. IT brings speed, vast amount of information and sophisticated processing capabilities to help us to create information useful in making a decision.

The primary objective of a DSS is to improve efficiency of decision maker by using historical and current data from internal information systems and external sources. By combining massive amounts of data with sophisticated analytical models and tools and by making the system easy to use, they provide a much better sources of information to use in the decision making process.

DSS characteristics

·         It helps the decision maker in decision making process

·         It is designed to solve semi-structured and unstructured problems.

·         It provides the mechanism to enable a rapid response to a decision makers request for information.

·         It has the capability to interface with the corporate database.

·         It supports decision makers at all levels, but is most effective at the tactical and strategic levels.

·         It makes general purpose models, simulation capabilities ad other analytical tools available to the decision maker.

 

b)       Executive Support System (ESS):

It is also known as Executive Information System (EIS). It is a reporting tool (software) that allows us to transform our organizations’ data into useful executive (summarized) reports. In other words an EIS is a type of management information system intended to facilitate and support the information and decision making needs of senior executive by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization.

These reports are generally used by executive level managers for quick access to reports coming from all company levels and departments. It enhances decision making for executives. It mainly deals with data related to key departments like billing, accounting, scheduling, staffing, etc. in addition to providing quick access to the data; it also acts an analysis tool and provides good understanding of the various possible outcomes depending upon the changes in input data. ESS thus saves valuable time of the executive in digging the huge pile of information to identify the critical data and helps them spend more time on brainstorming and decision making by providing only the required data. It can be used to view and analyze both the present data and predicted future data.

Characteristic of ESS:

·         It is a computer based information system

·         It enables user to extract summary data and solve complex problem.

·         It provides rapid and direct access to timely information and management reports

·         It is capable of both accessing both internal and external data.

·         It can easily provide DSS support for decision making.

Components of ESS

i)         Hardware: The basic hardware needed for a typical EIS includes four components:

ü  Input data – entry devices: These devices allow the executive to enter, verify and update data immediately.

ü  CPU (Central Processing Unit): It is main component which controls the other components within a computer system.

ü  Data storage: It is used by the executives to save as well as search useful business information easily.

ü  Output device: It provides visual record for the executive to save or read.

ii)       Software: It is set of related programs. A typical EIS includes four software components:

ü  Text Handling software

ü  Database

ü  Graphic base

ü  Model base

iii)      User interface: It is an important component of EIS which must be efficient to retrieve relevant data fro decision maker. Several types of interfaces can be available to the ESS structure such as: scheduled reports, question / answers, menu driven, command language, natural language and input / output.

iv)     Telecommunication: The current trend in companies is decentralizing, so the telecommunication will play a vital role in networked information system. It is used for transmitting data from one place to another It is crucial for establishing a reliable network as well as to accelerate the need for access to distributed data.

c)       Expert system (ES)

An expert is a person that has the expertise and knowledge of his specialized field. He expands his skills to enable him to solve problems efficiently and effectively. Prof. Edward Feigenbaum from Stanford University defines – “Expert system as an intelligent computer program that uses knowledge and reasoning procedures to solve difficult problem that need certain expertise to solve the problems”.

ES is developed to model the ability of an expertise in solving problems. The expert system is used to:

·         Help experts in their routine to improve productivity

·         Help experts in some of more complex and difficult tasks so that the problem can be managed effectively.

·         Helps experts to obtain information need by other experts who have forgotten about it or who are too busy to search for it.

Application of Expert system:

It is widely used in all types of fields and sectors like education, marketing, banking and financial, medicine, engineering, and many more. Some of the applications of ES are as follows:

·         Banking and financial sector: It is used as an expert system that

ü  Helps bank managers in making decisions on granting loans.

ü  Advises bank managers in giving housing loans, hire purchase loans, etc.

ü  Advises insurance companies on the risk involved in insuring a customer or a company.

ü  Helps banks decide on whether a customer is entitled for a credit card or not.

ü  Identifies computer fraud and controls it.

·         Production industries and Military

ü  Capable of diagnosing some technical malfunctions in an airplane, gas turbines and helicopters.

ü  That helps to identify threats that may put security at risk

 

Architecture (Component) of expert system

The major components of an expert system are:

·         Knowledge base

·         Inference engine

·         Explanation facility

·         Knowledge acquisition facility

a)       Knowledge base

A model of human knowledge is used by an ES. Knowledge is a combination of information that is already known. A knowledge database is quite different from the conventional database. A knowledge database does not store information like numbers, text, and other. It stores concepts and dedicated procedures that need to be done in order to solve a problem. There are several different methods of storing knowledge in a database. Some of the methods are predicate calculus, semantic network, script and mainframe.  A knowledge database stores two important things: facts and rule or heuristic rules.

b)       Inference engine

Inference engine is a computer program that drives to the conclusion or solution and at the same time provides to the reasoning methodology for information stored in the knowledge database. It is an important component of ES. It is considered as the brain of ES. It is the knowledge process that is modeled on the methods of human expert reasoning. It is a process in the Expert system that pairs the facts stored in the working memory with the knowledge domain that is stored in the knowledge database, to get the method from the problem. It is also known as the control structure or the rule interpreter for an ES base rule.

It also provides a guideline on using the knowledge in ES by developing an agenda that manages and control the steps needed for solving a problem during the consultation process executed by the user. There are two strategies used by the inference engine when making decision or conclusion. They are: forward and backward chaining.

·         Forward chaining strategy: In this strategy the inference engine starts reasoning from the facts provided and moves on until it achieves its decision or conclusion. It can obtain a decision and produce more information with fewer questions compared to backward chaining. It is always used for large scale and complex ES. However it takes long duration for processing.

·         Backward chaining strategy: This strategy is the opposite of the forward chaining strategy. It starts from the decision and moves backward to obtain supporting facts for the decision made.

c)       Explanation facility

This component acts to help the user understand how an ES reaches a certain decision or conclusion for the problem that need to be solved. This component is capable of answering questions like:

ü  Why is this question being accessed by the system?

ü  How is a decision made?

ü  On what basis the decision made?

ü  Why are certain alternatives rejected from being a decision or solution?

d)       Knowledge acquisition facility

Knowledge acquisition is a process of gathering and transferring problem solving expertise from all sources of knowledge in a computer program. The expert information that has been acquired will be used to develop and expand the base knowledge. The source of knowledge includes experts, journals, the internet, online database or research reports and experiments.

e)       User interface: The user communicates with the expert system through the user interface. It enables the user to query the system, input information and receive advice.

MIS objectives

An effective MIS has:

·         Provide a system of people, computers, procedures, and interactive query facilities, documents for collecting, storing, retrieving and transmitting information to the users.

·         Facilitate the decision making process by providing information in the proper time frame.

·         Provide (requisite) necessary information at each level and might to carry out their functions.

·         Help in highlighting the critical factors to the closely monitored for successful function on the organization.

·         Support decision making in both structured and unstructured problem environments.

·         Allow all participants, both management and staff to view, analyze and interpret useful data to set goals and objectives.

·         Information of the organization are recorded into the digitized form. MIS system focuses on creating paperless industry so that information in the organization ca be created, recorded, maintained, updated and disseminated easily from one computer to rest of all other world.

Function of MIS:-

MIS is set up by an organization to obtain management information to be used by its managers in decision making. Thus MIS must perform following functions in order to meet its objectives.

a)      Data capturing:-

MIS captures data from various internal and external source of an organization. Data capturing may be manual or through computer terminals.

b)     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. These activities organize, analyze and manipulate data using various statistical, mathematical, operation research or other business models.

c)      Storage of information:-

MIS stores processed or unprocessed data for future use. If any information is not immediately required, it is stored as an organizational record.

d)     Retrieval of information :-

MIS retrieves information from its stores as and when required by various users. As per the requirements of users, the retrieved information is either disseminated or it is processed again to meet the exact MI demands.

e)      Dissemination of MI (data):-

Management information, which is finished product of MIS, is disseminated to the users of an organization. It could be periodic, through reports or on-line through computer terminals.

 

 

 

Role of Management Information System:-

The role of the MIS in an organization can be compared to the role of heart of the body. The information is the blood and MIS is the heart. In the body the heart plays role of supplying pure blood to all elements of body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the need of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in an organization.

a)    Functional support role:- 

The system ensures that an appropriate data is collected from the various sources, processed and sent further to all the required destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the managers and the top management.

b)    The decision-support role:-

It always users ask to very powerful “ What if….? ” questions: What if we increase the price by 5%, what if we increase price by 10%, what if we increase by 10% now, then decrease it by 5% in three months? It also allows users to deal with contingencies (a possible but unpredictable future event): what we do if we are faced with strike or a new competitive threat? If inflation increases by 5% (instead of 2% as we are assuming), then what we do? An organization succeeds or fails based on the quality of its decisions. The enhanced ability to explore “what if" a question is central to analyzing the likely results of possible decisions and selecting those most likely to shape the future as desired.

 c)    Communication decision support role:-

 Information System can support a company’s competitive positioning to adopt in dynamic environment organization makes different interactive systems and integrated together to make fruitful decision towards organizational benefits. The MIS supports the diverse (widely) needs through a variety of systems such as: query systems, analysis systems, modeling systems and decision support systems. The MIS helps in strategic planning, management control, operational control and transaction processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data related to the transaction, the states of a particular record and reference on variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control and helps in decision in making at operation level to correct an out of control situations. The MIS helps the middle management in short-term planning target setting, controlling the business functions. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation.

d)    The performance monitoring role:-

The performance monitoring role helps:

·         To establish relevant and measurable objectives.

·         To monitor results and performance.

·         To send alerts to managers at each level of the organization, on all deviations between results and pre established objectives and budgets.

 

Impact of MIS:-

Since MIS plays a very important role in an organization, it creates an impact on the organizations, functions, performance and productivity. It plays positive impact on the organization. How much impact MIS has, it depends upon how it is formed and maintained. Some of the major impacts are:

a.       Impact on functional areas of business:-

The impact of MIS on the functions is in its management. With a good MIS Support, the management of marketing, finance, production and personnel become more efficient. The tracking and monitoring of the functional target become easy. The functional managers are informed about the progress, achievements and shortfalls in the activity and the targets. The manager is kept alert by providing certain information indicating and probable trends in various aspects of business, which helps in forecasting long-term planning. An MIS creates a structured database and a knowledgebase for all the people in an organization. The information is available in such a form that can be used straight away, saving the manager’s valuable time.

 

b)       Impact on organizational procedure:-

The MIS creates another impact in the organization, which relates to the understanding of the business itself. The MIS begins with the definition of a data entity and its attributes. It uses a dictionary of data, entity and attributes, respectively designed for information generation in the organization.

 

 

 

 

c)       Impact on business operations:-

The MIS calls for a systemization of the business operations for an effective system design. This leads to make more efficient of operations, which complicate the system design. It improves the administration of the business by bringing a discipline in its operation. This process brings a high degree of professionalism in the business operation.  

 

d)       Impact on organizational goals and objectives:-

Goals and objectives of the MIS are the product of business goals and objectives; it helps indirectly to pull the entire organization in one direction towards the corporate goals and objectives by providing the relevant information to the people in the organization.

MIS Characteristics

MIS Characteristics are as follows:-

a)      Management oriented and directed:-

For designing of MIS, top-down approach should be followed. Top-down approach suggests that the system development starts from the determination of management needs and overall business objectives. The MIS development plan should be derived from the overall business plan. It also implies that the management actively directs the system development efforts. In MIS development, a manager should spend a good amount of his/her time in system design. To ensure that the implemented system meets the specification of the system continued review and participation of the manager in necessary.

b)      Need based:-

MIS design and development should be as per the information needs of managers at different levels, strategic planning level, management control level and operational control level.

c)      Exception based:-

MIS should be developed on the exception based reporting principle, which means an abnormal situation, i.e. the maximum, minimum or expected values vary beyond to hence limit. In such situations, there should be exception reporting to the decision maker at the required level.

d)      Integrated:-

Integration means that the system has to cover all the functional areas of an organization so as to produce more meaningful management information, to achieve the objectives of the organizations.

It has to consider various sub-system, their objectives information needs, etc so that common areas of information are identified and processed without repetition and overlapping. For example in the development of an effective production scheduling system, a problem balance among following factors is desired.

*      set up costs                                           *      man power                                    *      over time

*      Money available                                 *      production capacity

*      Customer service                                 *      inventory level.  Etc.

e)      Common data flow:-

It avoids repetition of overlapping in data collection and storage, combining similar functions and simplifying operations where are possible. It supports several of the basic (tenets) central principle of system analysis. The development of common data flow is an economically sound and logical concept.  

f)       Long-term planning:-

Long term planning is required for MIS development in order to fulfill the future needs of objectives of the organization. A MIS system can not be established overnight. It takes almost 2 to 4 years to establish it successfully in an organization. The designer must avoid the possibility of the system going obsolete (out of data) before its time.

For example a transportation system where a highway is designed not to handle today’s traffic requirements but to handle traffic requirements 5 to 10 years.

g)      Flexibility and easy use:-

All the possible means which may occur in future should be added, while developing an MIS system. The MIS should be able to incorporate all those features that make it readily accessible to a wide range of users with easy usability.

MIS Applications

Management Information Systems (MIS) is the study of people, technology, and organizations. The role of the MIS in an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart work faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processed it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed and send further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and top management.

A Management Information System is an information system that evaluates, analyzes, and processes an organization's data to produce meaningful and useful information based on which the management can take right decisions to ensure future growth of the organization.

Some of the major areas of MIS applications are:

·         Planning:      MIS is most important ingredient at the planning phase which provides specific information’s such as business resources, assets, liabilities, plants and machineries, suppliers, customers, competitors, market and market dynamics, fiscal policy changes of the Government, emerging technologies, etc. to the organization.

·         Controlling: An organization need to set up an information filter, so that only filtered data is presented to the middle and top management. This ensures efficiency at the operational level and effectiveness at the tactical and strategic level

·         Decision making: MIS is primarily concerned with managerial decision-making. To make decision by the decision makers needs they require variety of information and MIS is the main sources of acquiring information. Decision-making information includes the socio-economic impact of competition, globalization, democratization, and the effects of all these factors on an organizational structure.

·         Measuring: A business measures its performance metrics by collecting and analyzing sales data, cost of manufacturing, and profit earned.

·         Policy making: MIS helps in policy making process. Different information is needed to form the policy of an organization. The information source is obtained from the rich of MIS to form the new policy of an organization for the betterment.

MIS Benefits and limitations

Limitation of MIS:-

MIS a method a company uses to obtain reliable information regarding its business operations.

Some of the major limitation of MIS:

a)       Expensive:-

MIS implementation can be very expensive for organizations looking to manage their operations more effectively. All divisions and processes must be reviewed when determining what information management wants extracted for decision support. The cost of this review followed by the installation costs can be extremely expensive for large organizations. Additionally, new employee hiring or employee training related to the MIS can also add to the implementation costs.

b)       MIS flexibility:-

Once an MIS is created and installed in an organization, it may be prove to be an inflexible system. Major changes will require major changes to the MIS, leading to increased costs and down time of information reporting.

c)       Employee training:-

Properly trained employees are a critical part of an MIS. Employees are at the front lines of business operations and create or manage the daily activities of an organization. If an MIS finds a system flaw (fault that spoils something, mistake) or management desists to change a process based on the MIS information, re-training employees will usually required. The length and depth of training may vary, making it difficult to estimate the cost of training. Management will also have to account for the lost productivity during this training period.

d)       Information Flaw (Fault):-

The MIS is designed to provide information to management, sound decisions can be made regarding organizations operations. The biggest flaw (mistake) an MIS can have is pulling incorrect or inadequate information for management. This problem results in wasted time and money for the organization leading to another review of the MIS to correct the information flaws.

 

 

 

 

Implementations of MIS

Implementation is also a process that has a series of sequential steps which makes operational the new system. Implementation of a system is also an important task which requires technical and managerial skills. Implementation as an activity has to be carefully managed. It requires client interaction at every stage.

The MIS implementation process which can be seen as a vital stage in the deployment of information technology to support the business information systems that are developed by the organization for employees, customers, and other business stakeholders

The implementation of new information systems is a significant investment for organizations. Since information systems are socio-technical systems, development involves the joint design of activity systems and ICT systems. It is important to define the key stages of the information system implementation process. Consequently, Davies (2009) presented information system implementation stages which are concerned with a number of key activities in the process. In addition, this information system implementation process concept is similar to O’Brien (2004) who explained a five- step process called the information systems development cycle which includes the steps of

 

System Development Life Cycle (SDLC) and its stages

The systems development life cycle (SDLC) is a conceptual model used in project management that describes the stages involved in an information system development project, from an initial feasibility study through maintenance of the completed application. In other words it is a process of creating or altering information systems, and the models and methodologies used to develop the systems.

Software life cycle models describe phases of the software cycle and the order in which those phases are executed. Each phase produces deliverables required by the next phase in the life cycle. Requirements are translated into design. Code is produced according to the design which is called development phase. After coding and development the testing verifies the deliverable of the implementation phase against requirements.

There are following six phases in every Software development life cycle model:

·         Requirement gathering and analysis

·         Design

·         Implementation or coding

·         Testing

·         Deployment

·         Maintenance

1)       Requirement gathering and analysis:  Business requirements are gathered in this phase. This phase is the main focus of the project managers and stake holders. Meetings with managers, stake holders and users are held in order to determine the requirements like; 

·         Who is going to use the system? 

·         How will they use the system? 

·         What data should be input into the system? 

·         What data should be output by the system? 

These are general questions that get answered during a requirements gathering phase. After requirement gathering these requirements are analyzed for their validity and the possibility of incorporating the requirements in the system to be development is also studied.

Finally, a Requirement Specification document is created which serves the purpose of guideline for the next phase of the model.

2)       Design:  In this phase the system and software design is prepared from the requirement specifications which were studied in the first phase. System Design helps in specifying hardware and system requirements and also helps in defining overall system architecture. The system design specifications serve as input for the next phase of the model.

In this phase the testers comes up with the test strategy, where they mention what to test, how to test.

3)       Implementation / Coding:  On receiving system design documents, the work is divided in modules/units and actual coding is started. Since, in this phase the code is produced so it is the main focus for the developer. This is the longest phase of the software development life cycle.

4)       Testing:  After the code is developed it is tested against the requirements to make sure that the product is actually solving the needs addressed and gathered during the requirements phase. During this phase all types of functional testing like unit testing, integration testing, system testing, acceptance testing are done as well as non-functional testing are also done.

5)       Deployment: After successful testing the product is delivered / deployed to the customer for their use. As soon as the product is given to the customers they will first do the beta testing. If any changes are required or if any bugs are caught, then they will report it to the engineering team. Once those changes are made or the bugs are fixed then the final deployment will happen.

6)       Maintenance: Once when the customers starts using the developed system then the actual problems comes up and needs to be solved from time to time. This process where the care is taken for the developed product is known as maintenance.

Different SDLC Models:

Waterfall model:

The waterfall model, also known as the linear sequential model, is shown in following figure with its major phases, milestones, and products. It is a highly structured development process. It is the “traditional” approach to software development and was derived from defense and aerospace project lifecycles. The waterfall model is documentation-intensive, with earlier phases documenting what must be done and subsequent phases adding greater detail and defining how it should be done. The output from one phase serves as the input to the next phase, with the project flowing from one step to the next in a waterfall fashion. Phases are assumed to be sequential, with only localized feedback during the transition between phases. This is accomplished by using reviews as gates. Comprehensive reviews validate the work of one phase, and require the resolution of any problems before development is allowed to proceed to the next phase.

An important consideration for the Waterfall model is that fixes or modifications are often put off until the maintenance phase. This can be very costly, as the cost to correct a problem gets higher with each successive phase.

Fig: Waterfall Model

a)       Requirements Specification and analysis

·         It is the first phase of the SDLC

·         In this phase, the software developer and the user sits together and discuss their problems. User explains his needs and expectations from the new system that is being developed. The developer either agrees upon the requirements or shows his problem for such system.

·         Since all the requirements and specifications are discussed in this phase, this phase is also known as system requirement and specification (SRS) phase.

·         It is a complete description of the behavior of a system to be developed.

·         A system analyst also analysis the proposed system by performing feasibility analysis regarding to the system

·         The output of this phase is clear cut document of user requirements.

 

b)       System analysis and design

·         This is the second phase of SDLC.

·         In this phase the problem studied and analyzed in the first phase is converted into a design frame.

·         Determines the software framework of a system to meet the specific requirements. This design defines the major components and the interaction of those components,

·         It is a process of problem solving and planning for software solution.

·         Different kinds of techniques and tools such as: algorithm, flowchart, decision tables, etc are used for this phase for designing

·         The output of this phase becomes the base for the third phase.

 

 

c)       Implementation and unit testing

·         This is the third phase of SDLC.

·         It is execution of plan.

·         A programmer selects an appropriate programming language and starts coding.

·         After coding the individual coding called modules are tested and verified.

 

d)       Integration and system testing

·         This is the fourth phase of SDLC

·         All the individual modules are integrated as a whole system and tested as a complete system and verified.

·         This phase determines whether the software meets the specified requirements and finds any errors present in the code.

·         Generally there are two types of testing methods: top down approach and bottom up approach. Both testing methods can again sub divided into two categories: black box testing and white box testing.

·         The output of this phase is a complete verified system.

 

e)       System delivery and maintenance

·         This is the final phase of SDLC.

·         After the final test has been performed, it is delivered to the market or installed to the user’s machine.

·         User starts using the system. If any deviation arises during such use, it is reported to the developer and maintenance is done. Maintenance involves correcting errors which were not discovered in earlier stages of the life cycle. All the feedbacks of the users are collected; the system is modified and again lunched in the market.

·         It is the continuous process and is done through out the life of the system.

Prototype Model:

A prototype is a working model that is functionally equivalent to a component of the product.
In many instances the client only has a general view of what is expected from the software product. In such a scenario where there is an absence of detailed information regarding the input to the system, the processing needs and the output requirements, the prototyping model may be employed.

This model reflects an attempt to increase the flexibility of the development process by allowing the client to interact and experiment with a working representation of the product. The developmental process only continues once the client is satisfied with the functioning of the prototype. At that stage the developer determines the specifications of the client’s real needs.

 

Prototyping is an attractive idea for complicated and large systems for which there is no manual process or existing system to help determining the requirements. In such situations letting the client "plan" with the prototype provides invaluable and intangible inputs which helps in determining the requirements for the system. It is also an effective method to demonstrate the feasibility of a certain approach. This might be needed for novel systems where it is not clear those constraints can be met or that algorithms can be developed to implement the requirements. The process model of the prototyping approach is shown in the figure below.

 

The process of prototyping involves the following steps:

Step 1: Identify basic requirements

Determine basic requirements including the input and output information desired. Details, such as security, can typically be ignored.

Step 2: Develop Initial Prototype

The initial prototype is developed that includes only user interfaces.

Step 3: Review and User Evaluation

The customers, including end-users, examine the prototype and provide feedback on additions or changes.

Step 4: Revise and Enhancing the Prototype

Using the feedback both the specifications and the prototype can be improved. Negotiation about what is within the scope of the contract/product may be necessary. If changes are introduced then a repeat of steps 3 and step 4 may be needed. This process is continued until the complete user satisfaction.

Iterative Enhancement Model:

The iterative enhancement life cycle model is a combination of both prototyping and the waterfall model. The basic idea is that the software should be developed in increments, where each increment adds some functional capability to the system until the full system is implemented. At each step extensions and design modifications can be made. An advantage of this approach is that it can result in better testing, since testing each increment is likely to be easier than testing entire system like in the waterfall model. Furthermore, as in prototyping, the increment provides feedback to the client which is useful for determining the final requirements of the system.

In the first step of iterative enhancement model, a simple initial implementation is done for a subset of the overall problem. This subset is the one that contains some of the key aspects of the problem which are easy to understand and implement, and which forms a useful and usable system. A project control list is created which contains, in an order, all the tasks that must be performed to obtain the final implementation. This project control list gives an idea of how far the project is at any given step from the final system.

Each step consists of removing the next step from the list. The steps: Designing the implementation for the selected task, coding and testing the implementation, and performing an analysis of the partial system obtained after this step and updating the list as a result of the analysis. These three phases are called the design phase, implementation phase and analysis phase. The process is iterated until the project control list is empty, at the time the final implementation of the system will be available. The process involved in iterative enhancement model is shown in the figure below.

The Iterative Enhancement Model

The project control list guides the iteration steps and keeps track of all tasks that must be done. The tasks in the list can be including redesign of defective components found during analysis. Each entry in that list is a task that should be performed in one step of the iterative enhancement process, and should be simple enough to be completely understood. Selecting tasks in this manner will minimize the chances of errors and reduce the redesign work.

Spiral model:

The spiral model was defined by Barry Boehm in his 1986 article "A Spiral Model of Software Development and Enhancement". The spiral model was developed with the goal of reducing risk in the software life cycle. It combines elements of the waterfall, evolutionary, and incremental models, and depending on how it is implemented can strongly resemble any combination of the others. The spiral model is similar to the incremental model, with more emphases placed on risk analysis. The spiral model has four phases: Planning, Risk Analysis, Engineering and Evaluation. A software project repeatedly passes through these phases in iterations. The baseline of spiral starts in the planning phase, requirements are gathered and risk is assessed. Each subsequent spiral builds on the baseline spiral. Requirements are gathered during the planning phase. In the risk analysis phase, a process is undertaken to identify risk and alternate solutions. A prototype is produced at the end of the risk analysis phase. Software is produced in the engineering phase, along with testing at the end of the phase. The evaluation phase allows the customer to evaluate the output of the project to date before the project continues to the next spiral.

 

Steps

The steps in the spiral model iteration can be generalized as follows:-

·         The system requirements are defined in as much detail as possible. This usually involves interviewing a number of users representing all the external or internal users and other aspects of the existing system.

·         A preliminary design is created for the new system. This phase is the most important part of "Spiral Model". In this phase all possible (and available) alternatives which can help in developing a cost effective project are analyzed and strategies to use them are decided. This phase has been added specially in order to identify and resolve all the possible risks in the project development. If risks indicate any kind of uncertainty in requirements, prototyping may be used to proceed with the available data and find out possible solution in order to deal with the potential changes in the requirements.

·         A first prototype of the new system is constructed from the preliminary design. This is usually a scaled-down system, and represents an approximation of the characteristics of the final product.

·         A second prototype is evolved by a four fold procedure:

·         evaluating the first prototype in terms of its strengths, weaknesses, and risks;

·         defining the requirements of the second prototype;

·         planning and designing the second prototype;

·         Constructing and testing the second prototype.

Feasibility Analysis:

Feasibility analysis is the process to determine whether the solution or system development is feasible according to the organization resources. It is a process which examines the system that is going to be developed and it covers the strength and weakness of the existing system, opportunities as well as threat by the environments and other factors. The resource required to carry the prospects for success. A well designed feasibility study should provide a historical background of the system. A feasibility study is conducted by highly skilled personnel called system analyst, to assist decision maker in deterring whether or not to implement a particular system. It also allows project manger to investigate the possible negative and positive outcome of a project before investing too much time and money.

A feasibility analysis of a proposed system is undertaken in following headings

a)       Technical feasibility analysis

b)       Economical feasibility analysis

c)       Behavioral feasibility analysis

d)       Legal feasibility analysis

e)       Operational feasibility analysis

f)        Scheduled feasibility analysis

a)       Technical feasibility analysis

Technical feasibility analysis consists: hardware, software and human-ware. In technical feasibility the following issues are taking into consideration

·         Whether the required technology is available or not?

·         Whether the required resources (software and human-ware) is available or not?

Once the technical feasibility is established, it is important to consider the monitory factor also. Since, it might happen that developing a particular system may be possible but it may require huge investment and benefits may be less.

b)       Economical feasibility analysis

Economical feasibility analysis is most frequently used method for evaluating effectiveness of new system. It is also known as cost-benefit analysis (C/B analysis). It is used to determine the benefits and saving that are expected from the new system and compares them with cost, the system is designed and implemented otherwise the system is rejected.

c)       Behavioral feasibility analysis

This legal feasibility is performed to analyze the conflicts arises between system under consideration and the organization. It also considers any legal aspect from the society and government rules. If the proposed system is legally feasible, the new system is adopted otherwise the system is rejected.

d)       Legal feasibility analysis

This legal feasibility is performed to analyze the conflicts arises between system under consideration and the organization. It also considers any legal aspect from the society and government rules. If the proposed system is legally feasible, the new system is adopted otherwise the system is rejected.

e)       Operational feasibility analysis

It is mainly concerned with issue like whether the system will be used if it’s developed and implemented whether there will be resistance from users etc. will affect the possible benefits from the system. The operational aspects are really a human related problem. For better operation of the proposed system, training should be given to the users who are performing the function of new system.

f)        Scheduled feasibility analysis

A project or a system will fail if it takes too long time to be completed. Typically schedule feasibility means estimating how long the system will take to develop? It is a measure of how reasonable the project time4 table is? If the system cannot deliver in the scheduled time then it can be outdated and the goodwill of the system developing institution will be decreased.

 

 

 

 

 

 

 

Unit 3: Telecommunication and Network

 

Networking the Enterprise

An enterprise network is a computer network built by a business to interconnect its various company sites in order to share computer resources.

Telecommunication system:

A telecommunications system is a communication system for communicating at a distance using electrical signals or electromagnetic waves. A telecommunications system is a collection of nodes and links to enable telecommunication i.e. it is a collection of compatible hardware and software arranged to communicate information from one location to other. The IEEE dictionary defines telecommunications as “the transmission of signals over long distance, such as by telegraph, radio or television.”

 

The purpose of any telecommunications system is to transfer information from the sender to the receiver by a means of a communication channel.

Examples of telecommunications systems:

·         Telephone network

·         Radio broadcasting system

·         Computer networks

·         Internet.

A telecommunication system includes a transmitter to take information and convert it to a signal, a transmission medium to carry the signal and a receiver to take the signal and convert it back into usable information.

Basic components of telecommunication system:

There are six basic components to a telecommunications network.

1.       Input and output devices: These provide the starting and stopping points of all communication that is used to send and receive information’s. A telephone is an example of a terminal. In computer networks, these devices are commonly referred to as 'nodes' and consist of computer and peripheral devices. It is also known as 'terminals'.

2.       Telecommunication channels: It is a link through which data or voices are transmitted between sending and receiving devices in a network. It transmits and receives data. It includes various types of cables and wireless radio frequencies.

3.       Telecommunication processors: It provides a number of control and support functions for data transmission and reception. For example, in many systems, data needs to be converted from analog to digital and digital to analog (MODEM).

4.       Control software: It is responsible for controlling the functionality and activities of the network

5.       Messages: It represents the actual data that is being transmitted. In the case of a telephone network, the messages would consist of audio as well as data.

6.       Protocols: It specifies how each type of telecommunication systems handles the messages.  

The concept of a Network

Computer network is a collection of computers and devices interconnected by means of communication channels that provides communication among users and allows users to share resources. In other words, a computer network is a group of computer systems and other computing hardware devices that are linked together through communication channels to facilitate communication and resource-sharing among a wide range of users.

Computer networking is the process of linking two or more computing devices together for the purpose of sharing data.

Networks are used to (Purpose of computer networking):

·         Facilitate communication via email, video conferencing, instant messaging, etc.

·         Enable multiple users to share a single hardware device like a printer or scanner

·         Enable file sharing across the network

·         Allow for the sharing of software or operating programs on remote systems

·         Make information easier to access and maintain among network users

·         Centralizing administration and support

 

Note: Copying files onto floppy disks and giving them to others to copy onto their computers was sometimes referred to as the "sneakernet"

Advantages

a)       Sharing of resource

Computer system consists of different kinds of resources: hardware and software. Using computer network, it is possible to share resources like files, data, software or hardware. A single file can be shared and used by multiple users at the same time. Similarly a single hardware like printer can be used by multiple users in computer network.

File sharing: it allows files sharing and remote file access. And authorized person sitting at a workstation of a network can easily see the files present on the other workstation. Its saves time, which is wasted in copying a file form system to another, by using a storage devise. Any people can access or update the information stored in a database, making it up-to-date and accurate.

b)       Increased storage capacity

In a network there are multiple computers, which can easily share files. A stand alone computer might fall short of memory storage, but when many computes in a network, memory of many computes can be used for storage. We can also design a storage server in a network in order to have huge storage capacity.

c)       Increased cost efficiency

There are many software’s available in the market, which are very costly and take time for installation. Computer networks resolve this issue as the software can be stored or installed on a system or a server and can be used by the different workstations.

d)       Cheaper and faster communication

Data, information’s and messages can be passed from one compute to another computer with in a second. It the messages are to be passed to long distance, then is saves time as well as cost of message transfer.

e)       Centralized control

All the computers in a network are connected to a main computer called server. There are many essential networking policies, rules or security issues for a successful networking that must be implemented which are applied in the server. Such rules are automatically transferred or applied in the clients connected to the server i.e. all the controlling issues of all the computer and resources are possible form the server.

f)        Backup and recovery

Generally, a powerful computer is used as server and it is placed in a secured place and good mechanism is provided for backup of the data. If the data is lost in the clients, then it is possible to restore those data from the server.

Disadvantages

a)       Security issue

The major problem associated with computer network is its security issue. If a computer is on a network, a computer hacker can get unauthorized access by using different tools. In case of big organizations, various networking security software’s are used to prevent the theft of any confidential and classified data.

b)       Rapid spread of computer viruses

If any one computer in a network gets affected by computer viruses, there is a possible threat of other systems getting affected too. Viruses get spread on a network easily because of the interconnectivity of workstations. Such spread can be dangerous if the computes’ have important database which can be corrupted by the virus.

c)       Expensive set up

The initial set up cost of a computer network can be high depending on the number of computes to be connected. An organization has to buy NIC (Network Interface card) for each workstation, in case they are not in-built. Routers, hubs, switches, cables etc are required for installation of networking, which are costly devices, which adds up installation cost of an organization or a person.

d)       Needs special technical knowledge

Special skilled manpower is required to operate, set up, and maintain a networking system. The under developed countries like Nepal, it is another major problem.

e)       Dependency on main server

All the computers in a networking are interconnected through a main server. If the server breaks down, the whole network system is affected and the network system becomes useless. In big organizations, a powerful and highly secured computer is used as a main server.

 

 

 

 

The business value of Telecommunications Networks

 

Telecommunications service given an organization the capability to move information rapidly between different parties and also provide the ability for the customer, suppliers and employee to collaborate from anywhere. Business value impacts of the telecommunications and Networking are as follows:

·         Declining transaction costs

·         Declining agency costs

·         Increased agility

·         Higher quality management decisions

·         Declining geographical barriers

·         Declining temporal barriers

·         The extremely rapid growth in business networking and telecommunications results from the extraordinary value of participating in networks like the Internet.

Types of Telecommunication Networks

Telecommunication is the exchange of information by electronic means over large distances. A complete telecommunications circuit consists of two stations: a transmitter and a receiver. A transceiver is a combination of transmitter and receiver. The medium of signal transmission can be either wired or wireless such as telephones, telegraph, radio, microwave communication arrangements, fiber optics, satellites and the Internet.

In telecommunications, data is transmitted in the form of electrical signals known as carrier waves, which are modulated into analog or digital signals for transmitting information. Analog modulation such as that used in radio broadcasting is an amplitude modulation. Digital modulation is just an updated form of this.

The simplest form of telecommunications takes place between two stations. However, it is common for multiple transmitting and receiving stations to exchange data among them. Such an arrangement is called a telecommunication network. Telecommunication networks are classified on following two bases:

1.       Geographical area covered

According to the size of network, speed of data transmission, distance covered, technology used, structure of network etc, and networking is classified in following three categories

a)       LAN (Local Area Network)

·         It is a network within a very limited area such as a single building, college, offices or extended up to few kilo meters (generally 1 km)

·         It is generally owned by private organization or an individual.

·         The data transmission rate normally 1 to 100 mbps.

·         Generally guided media (twisted pair, optical fiber) are used for transmission.

·         It is simpler and cheaper than others but imposes many limitations.

·         Error rates are much lower in comparison; generally error rate is 1000 times lower in LAN than in WAN.

·         It can be operated at lower cost.

·         Highly security provided because no any outsiders access the resources of a private network.

·         Generally, protocols used are same.

·         E.g.: network of our college

b)       MAN (Metropolitan Area Network)

·         It is extended up to a city or a larger geographical area.

·         Many heterogeneous systems can be interconnected.

·         Different communication media can be adopted

·         Different types of protocols can be used.

·         It can use both guided and unguided media

·         It has more flexibility.

·         It has chance of data leakage or security break.

·         E.g.: cable TV networks.

c)       WAN (Wide Area Network)

·         It extended up to a large area, throughout world.

·         It is combination of different types of LAN and MAN

·         It has massive amount of heterogeneous systems.

·         Normally operates at the speed of less than 1 mbps.

·         Generally owned by multiple organizations.

·         Its operation cost is higher than others.

·         Communication is done through unguided media (satellite, microwave, etc)

Features	LAN	MAN	WAN
Geographical distribution of nodes	With few kilometers	Within in few tens of kilometers (City)	May extend over several thousand kilometers
Purpose	To enable communication among computing devices within a building or a campus of an organization	To interconnect LANs located in a city or metropolitan	To interconnect connect LANs spread across cities or countries
Communication Channel used	Guided media: Twisted pair, coaxial cable, fiber optics	Both: Fiber optics, telephone lines, microwave links	Unguided: Fiber optics, telephone lines, microwave links, satellite channels
Ownership	Single organization	Single or Multiple	Usually Multiple
Communication cost	Low	Medium	High

 

2.       Architecture of the network

Network architecture, is the logical and structural layout of the network consisting of transmission equipment, software and communication protocols and infrastructure (wired or wireless) transmission of data and connectivity between components. It is a design of a communications network. It is a framework for the specification of a network’ physical components and their functional organization and configuration

a)       Peer-to-peer (P2P, Point-to-point)

·         It is distributed application architecture that partitions workloads between peers.

·         Peers are equally privileged, equipotent participants in the application

·        

B

C

D

E

A

Peers make a portion of their resources as processing power, disk storage or network bandwidth, directory available to other network participants without need for central coordination by server.

·         Peers are both suppliers and consumers of resources, so each has equivalent responsibilities and status.

·         When the communication is being done between any two computers, the other channels remain free. So there is not so much problem of data traffic.

·         In this architecture, computers are connected individually in pair.

 

When computer ‘A’ wants to send message to ‘C’, then it must be passed via computer ‘B’. When packet reaches to computer ‘B’, it first of all matches the receivers address with the message to its own address. If it matches, then only it accepts the message otherwise, it discard it and forwards tot eh next neighboring computer.

b)       Client server

A

B

C

D

E

S

Fig: Client-Server architecture

A client server network is a distributed network which consists of one higher performance system, called server and several mostly lower performance systems, called clients. The server is the central registering unit as well as the only provider of the content and services. A client only request content or execution of services, without sharing of its own resources. It uses broadcasting architecture for data communication. In this architecture, the server is always fixed which controls all other computers and communication is done via server.

When computer ‘A’ wants to send message to computer ‘C’, then the packet is sent to the server. The message is first received by the server, and then it sends the message to all clients. All the computers attached to the server receive such packets, each of them read the receivers address and compares their own address. If it matches, then only the compute accepts tit, otherwise the packet is discard.

 

Telecommunication Media

Communication media refers to the means (transmission and storage tools or channels for data storage and transmission) of delivering and receiving data or information. Data communications can be carried from one location to another through a variety of communications channels. These communications media include telephone lines (twisted pairs), coaxial cable, fiber-optic cable, microwave, and satellite. In general, there can be two ways of connecting microcomputers with each other and with other equipment: guided and radiated media.

The Communication Medium plays an important role in Networks. If the medium works well and properly, then the speed of transferring data is good but if the medium is not working properly, then the data would be delayed or would not be sent or even can be lost during transmission.

• Guided Media: It refer to channels that allow the transmission of data and information through a physical media such as a twisted pair wire, coaxial cable, or fiber optic cable.
• Unguided (Radiated) media: Unguided media refers to those that transmit data and information through the air such as microwave, or satellite.

Twisted Pair

·         Most popularly used communication media

·         Twisted pair cable consists of a pair of insulated wires twisted around each other to minimize interference from others i.e. the twisting helps to reduce noise pickup from outside sources and crosstalk on multi-pair cables.

·         It is cheapest and easily available wire, which can carry data to large distance without data loss.

·         Mostly used in telephone systems to carry most of the voice and data communication.

·         It has fewer bandwidths as compared to other wires.

·         They are available in varieties of grades called levels.

·         There are two types of twisted pair cables

a)       Shielded twisted pair (STP): STP simply has additional shielding material that is used to cancel any external interference that may be introduced at any point in the path of the cable. STP is used in noisy environments where the shield around each of the wire pairs, plus an overall shield, protects against excessive electromagnetic interference. Using STP cables ensure that we get the maximum bandwidth from your cabling even if the external condition is less than ideal. The biggest drawback to using STP cables is the higher cost.

b)       Unshielded twisted pair (UTP): UTP cables have no protection against such interference and its performance is often degraded in its presence.

Coaxial Cable

·         It consists of a single thick copper wire in the core, surrounded by an insulation plastic with a net of thin copper wires used as earthing and in the outermost part- it is insulated by a thick plastic

·         It generally comes into two categories: thin coax and thick coax

·         Thick coax generally has 1 cm core diameter and has high degree of noise immunity and high bandwidth. It has 100base5 (100 mbps bandwidth with 500m wire length)

·         Thin coax has half of the size and more than half of the bandwidth in comparison to thick. It has 10base2 bandwidth.

·         Relatively expensive than twisted pair cable.

·         Because coaxial cables have very little distortion and are less prone to interference, they have low error rates.

·         It is used in TV in our homes, as well as computers in local area networks are linked by coaxial cables.

Fiber-Optic Cable

·         It is the most advanced media in communication, which uses light rather than electricity to transmit information.

·         It is a flexible, thin, transparent fiber made of high quality glass or plastic and is very hard to identify with our naked eyes.

·         It has two layers: clad and core

Both clad and cores are made up of same material (plastic or glass). The light is passed through an optical fiber by the process of total internal reflection. Light source for its ‘laser’ or ‘led’ and detector is ‘pin’. At the source, electrical pulses generated by computer or electronic devices, is converted into light by ‘laser’ or ‘led’ which flows form optical fiber in the form of light. At the destination, the light rays are again converted into electrical pulses by ‘pin’.

·         It doesn’t have any danger of leakage and electrical interferences. So it can be used in any environments like under big factories, ground or airports i.e. it has high level of security.

·         It has highest bandwidth and highest speed in comparison to any other Medias.

·         It is most expensive

·         Data can travel long distance without any loss and amplification, so amplification cost can be minimized by using optical fiber.

·         Fiber optics can generate high Data Rates, so these are used for long distance communications that require high speed and least data loss.

Microwave

Microwave data transmission differs from the other communications channels in that data is transmitted through the air instead of through cables or wires. Microwaves are high-frequency radio waves that can only be directed in straight lines. Consequently, microwave transmission is usually limited to communications occurring within the limits of a particular city or community. For microwave transmissions to be able to occur over larger distances, data messages must be relayed from one location to other using antennas placed at high altitudes usually 20-30 miles apart.

Satellites

Instead of antennas, satellites can also be used to transfer microwave messages from one location to another. Satellites rotate approximately 23,300 miles above the earth in precise locations. Satellite transmission stations that can both send and receive messages are known as earth stations.

This is a space station that receives microwave signals from an earth-based station, amplifies the signals, and broadcasts the signal back over a wide area to any number of earth-based stations. A transmission from the earth to a satellite is called an uplink; a transmission from a satellite to an earth station is called a downlink. Communication satellites are used in application such as air navigation, television and radio broadcast, videoconferencing and paging.

Bluetooth

This technology was created by Ericsson in 1994. Bluetooth is a short-range wireless technology that connects computers, mobile phones, and handheld devices to each other and to the Internet. This technology eliminates the need for the cables that connect devices together. Bluetooth-enabled devices connect wirelessly within a 10 m range. Bluetooth technology allows you to share voice, data, music, photos, videos and other information wirelessly between paired devices.

Bluetooth wireless technology was named after a Danish Viking and King, Harald Blatand; his last name means "Bluetooth" in English. He is credited with uniting Denmark and Norway, just as Bluetooth wireless technology is credited with uniting two disparate devices.

Bluetooth is a specification for the use of low-power radio communications to wirelessly link phones, computers and other network devices over short distances. The name Bluetooth is borrowed from Harald Bluetooth, a king in Denmark more than 1,000 years ago. Bluetooth technology was designed primarily to support simple wireless networking of personal consumer devices and peripherals, including cell phones, PDA’s, and wireless headsets. Wireless signals transmitted with Bluetooth cover short distances, typically up to 30 feet (10 meters). Bluetooth devices generally communicate at less than 1 Mbps.

Infrared:

Infrared waves are electromagnetic radiation of a particular wavelength (or color). They are between 700 nm (nanometers) and 1 mm. They are just beyond what our eyes can detect on the red side of the rainbow. Infrared waves were discovered by William Herschel around 1800.

We are surrounded by infrared every moment of every day. Warm objects, such as the human body, produce large amounts of infrared and heat-sensitive CCTV cameras work by detecting these infrared waves. Half of the energy produced by the Sun is infrared, so we are being bombarded by it constantly.

Wi-Fi

Wi-Fi can be configured in one of two modes:

·         Infrastructure mode Wi-Fi and

·         Ad-hoc mode Wi-Fi.

·         Nearly all Wi-Fi setups use infrastructure mode, where client devices within range all connect to and communicate through a central wireless access point.

·         Ad hoc Wi-Fi allows clients to connect directly to each other without the use of an access point.

Wi-Fi consists of a data link layer protocol that runs over any of several different physical layer links. The data layer supports a special Media Access Control (MAC) protocol that uses collision avoidance techniques to help handle many clients on the network communicating at once

Wi-Fi supports the concept of channels similar to those of televisions. Each Wi-Fi channel utilizes a specific frequency range within the larger signal bands (2.4 GHz or 5 GHz). This allows local networks in close physical proximity to communicate without interfering with each other. Wi-Fi protocols additionally test the quality of the signal between two devices and adjust the connection’s data rate down if needed to increase reliability. The necessary protocol logic is embedded in specialized device firmware pre-installed by the manufacturer.

 

Drawback of Wi-Fi:

Common issues people face with Wi-Fi networks include:

·         Security - Network traffic sent across Wi-Fi networks passes through open air making it prone to snooping from malicious strangers. Several kinds of security technology have been added to Wi-Fi over the years to help address this problem, although some work better than others.

·         Health concerns - Some people claim that extensive exposure to wireless radio signals like those from Wi-Fi networks cause headaches, nausea and other physical issues. Many industry experts assure the public that Wi-Fi is safe, but controversy persists as claims one way or the other are difficult to prove.

·         Signal range - A basic Wi-Fi network with one wireless access point reaches at most only a few hundred feet (100m or less) in any direction. Expanding the range of a Wi-Fi network requires installing additional access points configured to communicate with each other, which becomes expensive and difficult to support, especially outdoors. As with other wireless protocols, signal interference (from other wireless devices, or from physical obstructions such as walls) can lower the effective range of Wi-Fi and its overall reliability.

Network Topologies

Network topology is the interconnected pattern of network elements. A network topology may be physical, mapping hardware configuration, or logical, mapping the path that the data must take in order to travel around the network.

Computer topology is the logical way of explaining how computers are connected to each other and shows physically how they are linked. The major goal of topology is to find out the most economical and efficient way to connect all the users to the network.

Network topologies may be physical or logical. Physical topology means the physical design of a network including the devices, location and cable installation. Logical topology refers to how data is actually transferred in a network as opposed to its physical design. In general physical topology relates to a core network whereas logical topology relates to basic network.

Network topology can be classified on the following type.

1)       Bus topology

In this structure all the computers are attached to a single cable called ‘bus’. So all the nodes shares the bus, the server is located either side and terminator is located on other side of the bus to indicate that the networking is not available beyond that point. It is based on broadcasting architecture.

Advantage:

·         It is simple, reliable and easy to use.

·         If any one of the compute in network is down, then whole system is not affected.

·         It is more flexible, we can connect any number of computers by using connector in the bus.

Disadvantage:

·         Data traffic is high, because all the data are transmitted from the bus.

·         Data collision is high.

·         Finding out fault and troubleshooting is hard.

 

2)       Star topology

A central connecting device called hub connects all the nodes in the network, which is connected to a powerful central computer called server. It is also based on broadcasting architecture. The hub acts as a signal booster or repeater. The star topology is considered the easiest topology to design and implementation.

Advantage:

·         It is flexible.

·         Easy to diagnose fault because of hub.

·         If any of the computers in the network goes down, then the other computers can carry out their functions.

Disadvantage:

·         If the server goes down or the hub makes the whole system unavailable.

·         Cost of cable is more.

·         At the time of broadcasting, all the nodes remain busy.

 

3)       Ring topology

Each computer is connected in a circular structure. Each computer is connected to other two computers in either side. It is a network topology that is set up in a circular fashion in which data travels around the ring in one direction. It is based on peer-to-peer architecture.

Advantage:

·         All the computers are independent. So each computer acts as client as well as server.

·         Since data travels in one direction, there is less chance of collision and less data traffic.

·         Every computer has equal access facility to the resources.

 

Disadvantage:

·         Very hard to find out errors and troubleshooting

·         Non-flexible.

 

4)       Tree topology

It is also known as hierarchy network. In this structure, a central node, called root is connected to one or more nodes (second level) with a point-to-point link. The second level nodes will also have one or more other nodes that are one level lower in hierarchy connected to it, also with point-to-point link.

5)       Mesh topology

It is also known as fully connected topology. In such structure, all the computers are connected in a network. It doesn’t need to use switching or broadcasting due to direct connection between each computer in a network. So its communication speed is very fast however the cost of cabling and network increases as the number of computers increased. It is impractical for large network.

Advantage:

Disadvantage:

·         It is non flexible topology.

·         The cost of cabling will be very high for a large number of computers.

 

6)       Hybrid topology

It uses a combination of any two or more topology. Hybrid networks use a combination of any two or more topologies in such a way that the resulting network does not exhibit one of the standard topologies (e.g., bus, star, ring, etc.). For example, a tree network connected to a tree network is still a tree network topology. A hybrid topology is always produced when two different basic network topologies are connected. Two common examples for Hybrid network are: star ring network and star bus network

Intranet

An intranet is a private network that is setup and controlled by an organization to encourage interaction among its members, to improve efficiency and to share information, among other things. Information and resources that are shared on an intranet might include: organizational policies and procedures, announcements, information about new products, and confidential data of strategic value i.e. intranet is a restricted-access network that works much like the Internet, but is isolated from it.

 

It is a private network for a small collection of users like employees which have been granted permission by their organization to access the Web, email, and other information services found on the Internet. An intranet is intended for small-scale operations, but it has proven useful for collaboration and sharing resources like computer data, network applications and sharing information among employees.

According to Oracle, an "Intranet is a network that is "owned" by a single organization that controls its security policies and network management." It is organized for internal users and not external users who are on the outside of the private network, like business partners or other businesses. However, such users can be granted use of an intranet if an organization permits it.

 

 

 

Extranet

An extranet is an extended intranet. In addition to allowing access to members of an organization, an extranet uses firewalls, access profiles, and privacy protocols to allow access to users from outside the organization i.e. it is a private network that uses Internet protocols and public networks to securely share resources with customers, suppliers, vendors, partners, or other businesses.

Both intranets and extranets are owned, operated and controlled by one organization. However, the difference between intranets and extranets is defined in terms of who has access to the private network and the geographical reach of that network.

OSI Reference Model

OSI is the system adopted for data communication through internet because there are different sets of technologies, protocols, devices and software’s used for transmitting data and there is need of a common language, which is understood by al the devices, protocols, technologies and software in the network. OSI provides such type of facility by which all the devices attached in the network speak the same language.The OSI model was released in 1984, a standard network model. It describes how information makes its way from application programs through a network medium to another application program in another computer.

It consists of seven different layers.

Application layer

Presentation layer

Session layer

Transport layer

Network layer

Data Link layer

Physical layer

Computer ‘A’

Application layer

Presentation layer

Session layer

Transport layer

Network layer

Data Link layer

Physical layer

Computer ‘B’

Application Protocol

Presentation Protocol

Session Protocol

Transport Protocol

Network Protocol

Data Link Protocol

Physical Protocol

1)       Application layer

·         It is closest to the user.

·         It provides services to application programs.

·         It synchronizes the sending and receiving application.

·         It determines whether the sufficient resources of the intended communication exist.

·         It establishes agreement on procedures for error recovery and control of data integrity.

2)       Presentation layer

·         It ensures that information sent by the application layer of one system will be readable by the application layer of another system

·         It provides common format for transmitting data across various systems, so that data can be understood.

·         It provides facilities to convert message data into a form which is meaningful to communicating application layer entities.

·         It may perform such transformation as encoding, decoding, code conversion, compression and decompression, encryption and decryption on the message data.

3)       Session layer

·         It provides means of establishing, maintaining and termination a dialogue or session between two end users.

·         It allows the two parties to authenticate each before establish a dialog session between them

·         It specifies dialog type- one way, two way alternative or two way simultaneous (simplex, half duplex and duplex) and imitates a dialog session.

·         It also provides priority management service which is useful for giving priority to important and time bound message over normal, less important message.

·         E.g. of session layer protocols and interfaces are: NFS (Network File System), RPC (Remote Procedure Call), SAL, ASP (Apple Talk session protocol)

4)       Transport layer

·         It accepts message of arbitrary length form the session layer, segments them into packets, submits them to the network layer for transmission and finally reassembles the packets at the destination.

·         It includes mechanisms for handling lost and out of sequence packets. For this transport layer record a sequence number in each packet and uses the sequence number for detecting loss packets and for ensuring that message reconstructed n the correct sequences.

·         The two most popular transport layer protocols are: TCP (Transport Control Protocol) and UDP (User Datagram Protocol)

5)       Network layer

·         It is responsible for setting up a logical path between two nodes for communication to take place.

·         It encapsulates frames into packets, which can be transmitted from one node to another node by using a high level addressing and routing scheme of the network layer.

·         Two popular network layer protocols are: X.25 protocol and Internet Protocol (IP)

6)       Data link layer

·         It is the responsibility of the data link layer to detect and correct any errors in the transmitted data.

·         It partitions the raw bit stream into frames, so that error detection and correction can be performed independently for each frame.

·         It also performs flow control of frames between two sites to ensure that a sender does not beat the receiver by sending frames at a faster than the receiver can process.

·         It is concerned with network topology.

·         It is sub-divided into two sub-layers: Logical Link control (LLC) and Media Access Control (MAC) layer.

7)       Physical layer

·         It is responsible for transmitting raw bit streams between tow nodes.

·         It also deals with the mechanical details such as size and shape of connecting plugs, the number of pins in the plugs and function of each pin. Etc.

·         RS232-c is a popular physical layer standard for serial communication lines.

 

 

Unit 4: Data Resources Management and DSS

 

Fundamental data concepts

A database is a collection of logically related data that are organized in such a way that facilitate easy accessing and processing of data. Databases contain data, not information. By itself database is meaningless and worthless, but through proper design and use of the database, it can be essential tool for producing information for making management decisions.

File-oriented systems are inadequate to face the challenges of increasing demand for information. Especially when companies care for information as a key asset, the earlier file-oriented data systems possess severe limitations.

Limitations of flat file processing system

1.       High data redundancy

Data redundancy means repetition of same data or information in separate files, which causes many problems. For instance, if some individual records of a student in college are stored in various files, a date of birth has to be updated in each separate file. If a user doesn’t update the record in all files, no one would know which information was correct. This situation may cause various problems. In addition, it takes more file space on the system.

2.       Integrity problem

Data integrity in a database means reduction of data inconsistency. The data values stored in the database must satisfy certain types of consistency constraint. For example, the marks obtained by a student may never exceed full marks (say 100) in each subject but in case of flat database it may exceed because there are no mechanism to control. But programmer enforces these constraints in the system by adding appropriate rules (codes) in the various application programs.

3.       Atomicity problem

Consider a program to transfer Rs. 100,000 from account A to account B. if a system failure occurs during the execution of the program, it is possible that the amount Rs 100,000 was removed from account A but was not credited to account B. It is essential that both credit and debit occur or neither occur to make consistency in database. That is, the funds transfer must be atomic. It is difficult to ensure atomicity in a conventional file processing system.

4.       Security Controls: Information is a corporate asset and, therefore, must be protected through proper security controls. In file-oriented systems, security controls cannot be established easily. However in database management systems database are centralized security controls possible. It is also easy to apply data access authorizations at various levels of data.

Introduction: Data, Information, Database and DBMS

 

Data on its own carries no meaning. For data to become information, it must be interpreted and take on a meaning. For example, the height of Mt. Everest is generally considered as "data", a book on Mt. Everest geological characteristics may be considered as "information", and a report containing practical information on the best way to reach Mt. Everest's peak may be considered as "knowledge"

Database System

A database system is a collection of related data necessary to manage an organization. A database system gives is a way of gathering together specific pieces of relevant information. It also provides a way to store and maintain that information in a central place. Database systems are designed to store large bodies of information.

Database Management System

A database management system (DBMS) consists of a collection of interrelated data and a set of program to access those data. The collection of data usually referred to as the database, contains information about one particular enterprise. The primary goal of DBMS is to provide an environment that is both convenient and efficient to use in retrieving and storing database information. In this way, database management system (DBMS) is a program or software that controls the data in a database including overall organization storage, retrieval, security and data integrity.

Objectives of DBMS

A database management system (DBMS) consists of software that operates databases, providing storage, access, security, backup and other facilities.

Objectives of DBMS

• It provides mass storage capacity
• Provides prompt response to users’ request for data
• Eliminate redundant data.
• Allow multiple users to be active at one time
• Provide data integrity
• Provide security with user access privilege
• Provide multiple views for same data.
• Making easy access to data for authorized users

Advantages of DBMS

·         Files can be shared so that authorized users can work with the same set of data.

·         Data redundancy can be minimized.

·         Improved data integrity and security can be achieved.

·         A great deal of programming time is saved

·         It is possible to obtain report for particular requirement.

·         There is no chance of data duplication.

 

Disadvantages of DBMS

·         Complex to understand and implement.

·         Costly

·         Too many rules

·         Chance of loosing the data

·         Chance of data leakage and hacking

 

 

 

Components of DBMS

A database management system has mainly two components. They are:

·         Data dictionary system

·         Database management language (DBML)

Data Dictionary System (DSS)

The data dictionary system is an encyclopedia of information concerning each data element. It describes the data and its characteristics, such as location, size and data type. It also identifies the origin, use, ownership and also the methods of data access and data security. When it exists in file, special software is necessary to create it, maintain it and make it available for use. Such software is called a data dictionary system. A good data dictionary would ensure consistent definitions of data across different databases. If there were to be change to the data, it would also identify all the databases affected by the change.

Database Management language (DBML)

There are three types of database management language, which is used to define the data, manipulation of data and help to query the data with certain criteria.

a)       Data Definition Language (DDL)

Data definition language is used to create data, describe the data and define the schema in the DBMS. It serves as an interface for application programs that use the data. Once the data dictionary has been created, its definitions must be entered into the DBMS. For example, if a payroll program needs the employment number of an employee, the DDL define the logical relationship between the employment number and the other data in the database and acts as an interface between the payroll program and the files that contain the employment numbers.

b)       Data Manipulation Language (DML)

Data manipulation language is a language that processes and manipulates the data in the database. It also allows the user to query the database and receive summary reports and customized reports. DML enables the user to access, update, replace, delete and protect database records from unauthorized access.

The DML commands are:

·         SELECT:       It is used to retrieve data from the database.

Example:

Ø  SELECT * FROM Student

Ø  SELECT * FROM Student ORDER BY Name

·         INSERT:       It is used to insert data into a table.

Example:

Ø  INSERT INTO Student VALUES (‘A100’, ‘Prakash’, ‘1^st Aug 1982’, ‘Kathmandu’);

·         DELETE:      It is used to remove all the rows from the table.

Example:

Ø  DELETE FROM Student;

Ø  DELETE FROM Student WHER RegNo = “A100”;

·         UPDATE:      It is used to change or modify data values in a table and can update all the rows from the table or a set of rows from the table.

Example:

Ø  UPDATE Student SET course='MCA';  

c)       Database Inquiry Language (DBIL)

A database inquiry language is used for query the database and receives the filtered data for different application. It can be used for the filtering and extracting the data according to certain criteria. For example if we want to update and delete the record we have to search it by using certain key field and can work as the DML for report generation.

Some DBIL command

·         GRANT:        It is used by administrators to add new permissions to a database user.

·         REVOKE:     It is used to remove database access from a user previously granted such access.

Database structure

A database structure (model) is the method of organizing data and represents the logical relationships among data elements in the database. The most popular database models are:

a)       Hierarchical Model

This structure helps to establish logical relationship among various data elements of multiple files and arrange the elements in a hierarchy i.e. it is a data model in which the data is organized into a tree-like structure. The structure allows representing information using parent/child relationships. In such model, each record on one level can be related to multiple records on the next lower level. A record or file that has one or more child but no any parent is called parent record  or file, the lowest level file which doesn’t have any child nodes but have one parent is called child file or node and the remaining file which has one parent and one or more Childs is known as intermediate files.

Advantages:

·         It can handle one-to-one relationship, so it is easy to develop

·         It is highly secured, coz without permission of a parent we can’t access its child

·         Searching mechanism is fast if its parent is known.

Disadvantages:

·         Data redundancy problem

·         It requires lots of memory storage to store data items.

b)       Network Model

The Network Database Model was created for three main purposes:

·         Represents a complex data relationship more effectively,

·         improving database performance, and

·         Imposing a database standard.

In the network model, each record in the database can have multiple parents i.e. it can hold many-to-many relationship among data elements. It is similar to hierarchal model, the main difference between network model and hierarchical model is that, in a network model, a child has a number of parents whereas a child has only one parent in hierarchical model.

Advantages:

·         It is flexible.

·         It is efficient, easy to understand.

·         Data can be accessed easily

·         Data duplication is almost removed

·         Searching of files is very easy.

Disadvantage:

·         It is complex to design and develop coz of many-to-many relationship among data elements.

·         It is time consuming and expensive.

c)       Relational Model

It is a collection of data items that are organized in tabular form i.e. in this model; data is represented using two-dimensional tables which are made up of rows and columns. The vertical line which indicates a single data is called column or field and the horizontal line which consists of all the fields of table is called row or record. This model can handle many to many relationships.

Student Record

R.N.	Name	Address	Sex	Contact
1	Ganesh Kadyat	Bus park	M	521312
2	Gautam Bhatta	Taranagar	M	523949
3	Jayanand Panerau	Hasanpur	M	523312

Advantages

·         Very less redundancy.

·         Normalization is possible.

·         Since one table is linked with other with some common field, rules implemented on one table can easily be implemented to another.

Disadvantages

·         It is more complex.

·         Too many rules makes database non-user-friendly.

Database development

There are different types of database management software’s which allows end users to develop required database. Example: Microsoft Access, Microsoft SQL server, Oracle RDBM, IBM DB2, Teradata, Informix, FileMaker etc. Such database development software’s are used to improve integrity and security of organizational database.

A database administrator (DBA) is the person who has a central control of both the data and the program that access those data. A DBA is an individual responsible for maintaining the overall database management system (DBMS). A DBA should have sound knowledge of database design techniques, database server, and operating system in which database server is running and about SQL.

The main responsibilities of DBA are as follows:

·         Installing and upgrading database server

·         Scheme definition i.e. overall design of database.

·         Scheme modification

·         Managing database server and security

·         Storage structure and access method definition.

·         Granting and revoking of authorization for data access.

·         Integrity constraints specification.

·         Runtime maintenance

In general, a DBA is responsible for ensuring that the data in the database meets information needs of organization.

Types of Databases

Operational database:

An organization generates a huge amount of data such as inventory management, purchases, transactions and financials to operate their daily operations. All this data is collected in a database is known as operational database i.e. it contains data about the things that goes inside an organization or enterprise. An operational database is the database that is currently and progressive in use capturing real time data and supplying data for real time computations and other analyzing processes. It contains detailed data used to run the day-to-day operations of the business. It is also known as operational/ production database, subject-area database (SADB) or transaction databases.

An operational database is usually hugely important to Organizations’ as they include the customer database; personal database and inventory database i.e. the details of how much of a product the company has as well as information on the customers who buy them. The data stored in operational databases can be changed and manipulated depending on what the company requires.

An operational database might contain fact and dimension data describing transactions, data on customer complaints, employee information, etc. The data in the operational database supplies the data warehouse, and is crucial to analytics and business intelligence.

Operational database are used to:

·         Store, manage and track real-time business information. For example, a company might have an operational database used to track warehouse/stock quantities. As customers order products from an online web store, an operational database can be used to keep track of how many items have been sold and when the company will need to reorder stock.

·         Stores information about the activities of an organization, for example customer relationship management transactions or financial operations, in a computer database.

·         It allow a business to enter, gather, and retrieve large quantities of specific information, such as company legal data, financial data, call data records, personal employee information, sales data, customer data, data on assets and many other information.

·         Share information across the company and over the Internet.

·         Manage mission-critical business data, to monitor activities, to audit suspicious transactions, or to review the history of dealings with a particular customer..

 

Distributed database:

Many organizations have several office locations, manufacturing plants, regional offices, branch offices and a head office at different geographic locations. Each of these work groups may have their own database which together will form the main database of the company. This is known as a distributed database. A distributed database is a database in which storage devices are not all attached to a common CPU. It may be stored in multiple computers located in the same physical location, or may be dispersed over a network of interconnected computers. The DDBMS (Distributed Database Management System) synchronizes all the data periodically and, in cases where multiple users must access the same data, ensures that updates and deletes performed on the data at one location will be automatically reflected in the data stored elsewhere.

Advantages of DDBMS's

·         Improved share ability, reliability

·         Improved performance

·         Faster Data Access because users only work with a locally stored subset of the data.

·         Faster data processing because the data is processed at several different sites.

·         Growth Facilitation: New sites can be added without compromising the operations of other sites.

Disadvantages of DDBMS's

·         Increased Cost

·         Integrity control more difficult,

·         Lack of standards,

·         Database design more complex.

·         Security is the major problem due data are stored in multiple locations.

·         Multiple copies of data are required at various separate locations which would require more disk space.

External database:

There is a sea of information available outside world which is required by an organization. They are privately-owned data for which one can have conditional and limited access for a fortune. This data is meant for commercial usage. All such databases outside the organization which are of use and limited access are together called external database.

Hypermedia database:

A hypermedia database is a computer information retrieval system that allows a user to access and work on audio-visual recordings, text, graphics and photographs of a stored subject. Such databases are accessed through internet, which contains full of multimedia contents.

The World Wide Web is a perfect example of a hypermedia database. Most websites have various interconnected multimedia pages which might include text, video clips, audio clips, photographs and graphics. These all need to be stored and “called” from somewhere when the webpage if created.

The Web is a type of hypermedia database because it provides results for all available media of an event. For example, if a user types the word "Management Information System" on a search engine, it gives results of various media that "Management Information System” falls under. Records of items are stored according to the subject of the file.

A hypermedia database may also provide hyperlinks to additional information regarding a specified subject. The biggest advantage of hypermedia databases as compared to traditional databases is that documents are accessed via organized links.

In a learning environment, it offers students great control of their environments. For example, the idea has been used for learning foreign languages. A user clicks on a word and listens to an audio of the word’s pronunciation. The database can also provide animation, images and video for the student to better understand the foreign word.

Data warehouses and Data mining

Organizations’ are required to keep all relevant data for several years. This data is also an important source of information for analyzing and comparing the current year data with that of the past years which also makes it easier to determine key trends taking place. All this data from previous years are stored in a database warehouse. Since the data stored has gone through all kinds of screening, editing and integration it does not need any further editing or alteration.

A data warehouse is a relational database that is designed for query and analysis rather than for transaction processing. It is used to support forecasting and decision-making processes across the enterprise. It acts as a centralized repository of an organization's data. It usually contains historical data derived from transaction data, but it can include data from other sources. They store current and historical data and are used for creating analytical reports for knowledge workers throughout the enterprise.

According to William H. Inmonna, data warehouse is defined as "A subject-oriented, integrated, time-variant, and nonvolatile collection of data in support of management's decision-making process."  A data warehouse is a centralized repository that stores data from multiple information sources and transforms them into a common, multidimensional data model for efficient querying and analysis. The concept of data warehousing is to create a central location and permanent storage space for the various data sources needed to support a company’s analysis, reporting and other functions.

Advantages of Data warehouse:

A data warehouse maintains a copy of information from the source transaction systems. It has following advantages:

·         It assembles data from multiple sources into a single database so a single query engine can be used to present data.

·         It maintains data history, even if the source transaction systems do not.

·         Improve data quality.

·         It presents the organization's information consistently.

·         It makes decision–support queries easier to write.

Data mining

Data mining is the process of analyzing data from different perspectives and summarizing it into useful information i.e. extracting meaningful data from a huge data set. Data mining software is one of the analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases. It is also known as Knowledge Discovery in Data (KDD)

Data mining is primarily used today by companies with a strong consumer focus - retail, financial, communication, and marketing organizations. It enables these companies to determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data.

Data mining is used today in a wide variety of contexts – in fraud detection, as an aid in marketing campaigns, and even supermarkets use it to study their consumers.

Data warehousing is the process of compiling and organizing data into one common database, and data mining is the process of extracting meaningful data from that database. The data mining process relies on the data compiled in the data warehousing phase in order to detect meaningful patterns.

Difference between data warehouse and OLTP

Characteristics	Data warehouse	OLTP
Work load	It is designed to accommodate ad hoc queries i.e. it perform wide variety of possible query operations.	It supports only predetermined operations.
Schema design	It often us de-normalized or partially de-normalized schema to optimize query performance	It uses fully normalized schema to optimize update / delete / insert performance to guarantee data consistency.
Data modification	It is updated on a regular basis. The end users of data warehouse do not directly update the data warehouse.	End users routinely issued individual data modification statements to the database. It is always up to date and reflects the current state of each business transaction.
Typical operations	The query scans millions of rows. For example – “find the total sales for all customers for last month”	It accesses only a handful of records. For example- “Retrieve the current order for a particular customer”
Historical data	It stores historical data to support historical analysis	It usually stores data from only a few weeks or months. It stores only historical data as needed to successfully meet the requirements of current transaction.

 

Decision support in Business

A decision support system (DSS) is a computer program application that analyzes business data and presents it so that users can make business decisions more easily. It is an "informational application". A DSS differs from a traditional information system (IS) or management information system (MIS) in that it not only provides the user with information, databases or reports, as does an IS or MIS, but it also provides answers to user queries, i.e., decisions, through its modeling component. It is a DSS is a computer system that helps managers makes decisions.

According to Sprague and Watson (1996) - DSS is interactive computer based systems that help decision-makers use data and models to solve ill-structured, unstructured or semi-structured problems.

DSS provides varying analysis without much programming effort and is usually directed towards non-technical users/managers. Managers main uses for a DSS includes searching, retrieving and analyzing decision relevant data to allow them to summarize main points which assist them in making more informed and educated decisions. Users often search for correlations between data without rewriting the underlying MIS or software application. DSS allows graphic capabilities, which not only allows trend analysis and reporting for top executives, but also assists managers in mapping out conjoint analysis and alternative scenarios to answer “what if” queries. Consequently, DSS supports both tactical and strategic decisions and are employed to influence manager’s expertise in a certain field.

DSS can be extremely beneficial to any business organization’s overall performance. However, DSS can also be the cause of great confusion, misperception and even inaccurate analysis – these systems are not designed to eliminate “bad” decisions. DSS are there to facilitate a manager in making operational decisions, but the ultimate burden of responsibility lies with the manger. Managers can sometimes be over-optimistic in their expectations of a DSS and develop an unrealistic dependence on the system

The DSS is an information application that produces comprehensive information. This is different from an operations application, which would be used to collect the data in the first place. A DSS is primarily used by mid- to upper-level management, and it is a key for understanding large amounts of data.

For example, a DSS could be used to project a company's revenue over the upcoming six months based on new assumptions about product sales. Due to the large amount of variables that surround the projected revenue figures, this is not a straightforward calculation that can be done by hand. A DSS can integrate multiple variables and generate an outcome and alternate outcomes, all based on the company's past product sales data and current variables.

Many organizations have integrated computerized decision support into day-to-day operating activities, like performance monitoring. Frequently, managers download and analyze sales data, create reports, and analyze and evaluate forecasting results. DSS can help managers perform tasks, such as allocating resources, comparing budget to actual results, drilling down to analyze results, projecting revenues, and evaluating scenarios.

The type of information required by decision makers in a company is directly related to:

·         the level of management decision making

·         the amount of structure in the decision situations managers face

The levels of management decision making that must be supported by information technology in a successful organization (independently of its size, shape, and participants), are often shown as a managerial pyramid – see the figure below (O'Brien, p. 393) and Lecture 4:

a)       Strategic management: As part of a strategic planning process top executives

·         Develop overall organizational goals, strategies, policies, and

·         Monitor the strategic performance of the organization and its overall direction in the political, economic, and competitive business environment

b)       Tactical management: Business unit managers and business professionals in self-directed teams

·         Develop short- and medium-range plans, schedules, budgets and specify policies, procedures, and business objectives for their sub-units of the company, and

·         Allocate resources and monitor the performance of their organizational sub-units, including departments, divisions, process teams, project teams, and other workgroups.

c)       Operational management: Operating managers and members of self-directed teams

·         Develop short-range plans (e.g. weekly production schedules), and

·         Direct the use of resources and the performance of tasks according to procedures and within budgets and schedules they establish for the teams and other workgroups of the organization.

 

Management Level	Information Use	Information requirements
Top Management	·         Goal setting ·         Long-range plans ·         Strategy ·         ROI	·         External Information, e.g. competitor actions, government regulation, economic factors, resource availability ·         Internal Information e.g. financial reports, key exception reports, etc. ·         Long term trends ·         Conjoint analysis (“what if’ analysis)
Middle Management	·         Definition of objectives ·         Medium rage plans ·         Tactical decisions	·         Internal information ·         Short term trends ·         Some conjoint analysis
Lower Management	·         Attainment of objectives ·         Short range plans ·         Supervision	·         Internal information e.g. recent historical information, detailed operational reports, appropriate exception reports

 

Decision Structures

Business organizational structures came about to simplify decision-making. The typical organization chart represents a hierarchy of authority starting with the chairman, CEO and other executive officers at the top because the executive officers set the goals and direction of the company. Supporting layers of managers under the executive level are tasked with applying these goals to their areas of responsibility or departments, which are arranged in order of appropriate information flow from management.

Function

Each specialized unit is managed by its own decision maker, who theoretically is best able to understand the needs and problems of that particular unit. This allows a consolidation of performance information in the managerial level where the executive level may access only the most pertinent information for goal and directional purposes. This filters out the details of company operations and feeds only the results of operations up the ladder to the executives and board of directors.

Significance

An organizational structure that divides the operations of a company into specialized departments empowers the managers of those departments to deal with problems and create efficiencies of process and production that are customized to their particular departments. It also creates a corporate management level where enterprise knowledge is developed, tested and preserved for the future efficient operation of the department, as well as easy accessibility by those in higher management charged with enterprise planning.

Benefits

A filtered flow of information from the production level of an enterprise allows executive management to focus on the goals of the company and compare the production and administration performance with their intended corporate direction. This assists their decision making by focusing on intended results rather than the detailed process of individual management of departmental operations.

Considerations

No organizational structure works unless the flow of information works. The purpose of organizational structure is to distribute the decisions of executive management down through administrative levels where the managers interpret those decisions and put them into practice. It also creates a way for managers to send feedback and performance information up the line to assist in future executive decisions. If the line of communication in either direction does not operate, the system breaks down

Decision Support Trends

As competition gets tougher and tougher, companies have to implement new management systems to stay efficient. Along business performance monitoring application, executive information systems, business intelligence systems and decision support systems (DSS) help managers to lead their companies successfully and survive into the future. They are interactive, flexible and adjustable systems that offer support in solving unstructured or semi-structured management problems, meant to improve the decision process. They are developed to assist the tactical and strategic level of management. The classic architecture of a DSS contains the database management system, the model base management system and the interface management system. The evolved DSS have also a knowledge component that provides the information needed for solving certain aspects of the problems.

1.       Group DSS Group decision making plays a major role in determining corporate affairs. How to design and develop group DSSs for supporting group meetings is a complex task because of the complex combination of people, places, time communication networks individual preferences, and other technologies. A group meeting can be conducted at the same place, or at different places attended by different groups of people using teleconferencing techniques. On the other hand, a group meeting can be conducted during a fixed period of time, or it is just an unlimited on-going process. Group DSS is supposed to support any one of the possible combinations.

2.       Decision support centre: Decision support centre is an emerging concept. Decision support groups, staffed by information systems professionals who understand the business environment, form the core of decision support centre, with advanced information technology. A decision support centre is usually located in close proximity to top management so that instant decision support can be provided. A decision support group will readily develop or modify DSSs to support top management in making urgent and important decisions.

3.       Strategic DSS: DSS for supporting strategic management is a well recognized area of importance and significance (King, 1984). It is an area where DSS can make a substantial impact on the top management and the corporation. The generic SICIS issue tree (King, 1984) sounds trivial, and the SPIRA process for achieving information-based strategic comparative advantage (King, 1984) resembles Checkland's (1981) soft system methodology.

Decision Support System

Decision is a process of selecting best alternatives form the set of alternatives. There are 3 types of decision.

·         Structured (Programmed) decisions.

·         Unstructured (Non-programmed) decisions.

·         Semi-structured (Semi-programmed) decisions

a.       Structured (Programmed) decisions

The decision in which a problem is solved by a predefined procedure or algorithm is called structured decision. These decisions are repetitive & routine in nature and are capable of being module mathematically. Such decisions can be made with the help of computer. The cost of solving a problem is low compared to non-structured decisions.

E.g. Inventory ordering, preparation of pay

b.       Unstructured (Non-programmed) decisions.

A unstructured is one for which there are several right answers and there is no precise way to get a right answer, no rules or criteria exist that generate us a good solution. These decisions are novel and difficult to structure in logical mathematical term.

E.g.: deciding whether to introduce a new product, advertising budget, acquisition of capital projects, changes the corporate image, employee a new marketing campaign etc.

c.        Semi-structured (Semi-programmed) decisions

In these type of decision, at least one but not more than two of choices can be handled by well defined preset procedure. Such decision falls somewhere between structured and non-structured.

Decision making process

The model was proposed by Herbert Simon. It consists of four phases.

a)       Intelligence

In this phase, the decision maker scans the environment and identifies the problem or opportunity. In other words, 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. It is also known as diagnosis phase of decision making, where a problem need or opportunity are recognized

There are many potential sources for recognizing problems or opportunity. They are: internal and external sources of data.

·         Personal observations, gossips, etc

·         Consistent customer requests for new product features.

·         threat of new competition

·         decline costs

·         Rising costs

·         an opinion of an industry expert about a new trend in customer behavior

b)       Design

This refers to formulating a problem or an opportunity, developing solutions to solve the problem, develop the opportunity and testing solutions for feasibility.

In this phase, the decision maker identifies alternative courses of action to solve the problem. Inventing or developing of various alternatives is a time consuming a crucial activity as the decision maker has to discover all possible alternatives and he cannot take a risk of missing any alternatives, as the missed-out alternative might be the best one.

Developing alternatives is a creative activity which can be enhanced by various aids such as brain-storming (group discussions to produce ideas), checklists, etc

 

 

c)       Choice

At this stage, one of alternatives developed in design phase is selected and is called decision. For selecting an alternative, a detailed analysis of each and every alternative is made. In this phase, the manager develop a selection criterion such as maximum profit, least cost, minimum waste, least time taken and highest utility. The criterion is applied to the various decision alternatives ad the one which satisfies the most is selected. Selection of alternatives can be based upon: experience, experiment and research.

·         Past experience is helpful when the firm is new to the market. It can follow the experience of their players in the market, and then act appropriately.

·         Experiment is challenging task.

·         Research is considered to be and effective technique for selecting an alternative because it studies the nature and relationship among there variables.

d)       Implementation

It involves implementing the activities for achieving the objectives.

However at any phase, the decision-maker may return to previous phase. For example, the decision maker in the choice phase may reject all alternatives and returns to the design phase for developing more alternatives.

Decision Support System

A DSS is highly flexible and interactive IT system that is designed to support decision making when the problem is non-structured. A DSS is an alliance between us, the decision maker and specialized support provided by IT. IT brings speed, vast amount of information and sophisticated processing capabilities to help us to create information useful in making a decision.

According to James Hick, 1993, “A Decision support system is an integrated set of computer tools that allow a decision maker to interact directly with computers to create information useful in making unanticipated semi-structured and unstructured decisions.”

According to G.W. Peter Keen Michael S. Morton, 1978 Decision support implies the use of computers to:

·         assist managers in their decision processes in semi-structured tasks;

·         support rather than replace, managerial judgment;

·         Improve the effectiveness of decision making rather than its efficiency.

The primary objective of a DSS is to improve efficiency of decision maker by using historical and current data from internal information systems and external sources. By combining massive amounts of data with sophisticated analytical models and tools and by making the system easy to use, they provide a much better sources of information to use in the decision making process.

DSS characteristics

·         It helps the decision maker in decision making process

·         It is designed to solve semi-structured and unstructured problems.

·         It provides the mechanism to enable a rapid response to a decision makers request for information.

·         It has the capability to interface with the corporate database.

·         It supports decision makers at all levels, but is most effective at the tactical and strategic levels.

·         It makes general purpose models, simulation capabilities ad other analytical tools available to the decision maker.

Components of DSS

There are three main software components of a DSS

a)       Database Management system

The database management system performs the function of storing and maintaining the information that we want DSS to use. The information's required solving any problem may come or external sources of database. In organization, internal data are generated bys such as TPS and MIS; External data are collected by variety of sources such as newspaper, bulletins, and online data services.

b)       Model management system

A model is a representation of some event, fact or situation. DSS helps in various decision making situations by utilizing models that allows managers to analyze information in many different ways. The model used in a DSS depends on the decision, the kind of analysis etc. The primary function of model management system is to stores and access models; that managers use to make decisions. Such models are used for designing a manufacturing facility, analyzing financial health of an organization, forecasting demand for a product or service.

c)       User interface management system.

It is used to communicate with the DSS. The user interface is the part of the system that we see; through it user enter information's, commands and models, i.e. it is an important support tool or mechanism that facilitate the user to interact with the system. Better the interface; the greater will be chances of system being accepted by the user. It provides graphical, flexible interaction between users of the system and the DSS software tools.

 

DSS Models

The DSS can be based on three different approaches

1)       Behavioral models.

These models are useful in understanding the behavior among the business variables. The decision makers can then make decisions using such behavioral relationships. The behavioral analysis can be used to set the points for alert, alarm and action for the decision maker. These types of models are largely used in process control, manufacturing, medicines, psychology and marketing

Different behavioral models are: Trend analysis, forecasting, statistical analysis model etc.

·         Trend analysis: It indicates how different variables behave in trend (fashion) setting in the past and hence in the future.

·         A regression model: It shows the correlation between one or more variables, it also helps in identifying the influence of one variable on the others.

2)       Management science models

These models are developed on the principle of business management, accounting and economics. There are different management systems, which can be converted into the decision support system models. Some of these models can be used straight a way in the design of DSS, while some others requires the use of management principles and practices. Such models are useful for the management decisions.

Examples: the budgetary systems, the cost accounting system, break-even analysis model, Return on investment analysis, project planning and control models: PERT, CPM, Gantt chart, etc.

3)       Operation research models.

These are mathematical models. These models represent real life problem situations in terms of variables, constants and parameters expressed in algebraic equations. Since, the models are mathematical; there are solutions to these problems. The operations research models generally try to find a solution which maximizes or minimizes certain aspects of business under the conditions of constraints.

Benefits of DSS

• improves personal efficiency
• facilitates interpersonal communication
• promotes learning or training
• increases organizational control
• Creates a competitive advantage over competition.
• Helps automate the managerial process

Unit 5: Business Applications

 

E-Business System

E-business is the conduct of business on the internet, in supply-chain planning, tracking, fulfillment, invoicing and payment. It includes buying and selling as well as servicing customers and collaborating with business partners. The major focus area of any organization in e-business is:

·         Reach new markets.

·         Create new products or services.

·         Build customer loyalty.

·         Enrich human capital

·         Make the best use of existing and emerging technologies.

·         Achieve market leadership and competitive advantage.

Difference between e-commerce and e-business

E-commerce can be described as the use of the Internet and the web to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals. On the other hand, e-business can be described as the digital enablement of transactions and process within a firm, involving information systems under the control of the firm. Moreover, e-business applications turn into e-commerce precisely when an exchange of value occurs. The differences between the two are as follows:

1.       E-Commerce is the subset of E-Business that is e-business is very broad concept while the e-commerce is just a small part of it.

2.       Those activities which essentially involve monetary transactions (or exchange of value) are termed as "e-commerce". However, e-business includes many other things besides selling including marketing, procurement of raw materials or goods, customer education, looking for suppliers etc.

3.       To sell online is e-commerce but to bring and retain customers and educate them online about the product or service is e-business.

4.       E-commerce has also been defined as a process covering outward processes that touch customers, suppliers and external partners while e-business covers internal processes such as production, inventory management, product development, risk management, finance etc.

Customer Relationship Management (CRM)

Customer satisfaction is the key to success in any business. In order for a business to consistently maintain success, it needs to satisfy its customers by providing high quality products or services at the right price. That’s why businesses need to constantly interact with customers in order to understand their true needs.

Customer relationship management (CRM) is a business solution that helps companies to improve marketing, sales, and service commitment with their customers to drive organizational efficiency, while helping to improve customer experience. CRM can help reduce costs and increase profitability by organizing and automating business processes that care for customer relationships and satisfaction across all interactions—marketing, sales, and customer service.

Atul Parvatiyar and Jagdish N. Sheth provide an excellent definition for customer relationship management in their work titled - 'Customer Relationship Management: Emerging Practice, Process, and Discipline': - Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value.

CRM System helps to mange their relationship with their current and future customers. IT provides information to coordinate all of the business processes that deal with customers in sales, marketing and service to optimize revenue, customer satisfaction, and customer retention. This information helps firms to identify, attract and retain the most profitable customers; provide better services to existing customers and increase sales.

CRM is managed through software in which companies provide different customer's information: last name, first name, telephone number, address, places where the client prefers to purchase, means of payment, average basket, etc. This information helps the company to better focus the client and to send him offers, to provide products and services that meet his needs, by reducing costs.

Now a day’s mobile CRM apps and platforms are also used to take care of customers that enable an organization to manage their customer relationships on mobile devices, along with tools that integrate data and reporting from social media directly into organizations CRM application.

Objective of CRM:

·         To keep track of all present and future customers.

·         To identify and target the best customers.

·         To let the customers know about the existing as well as the new products and services.

·         To provide real-time and personalized services based on the needs and habits of the existing customers.

·         To provide superior service and consistent customer experience.

·         To implement a feedback system.

Three Phases of CRM

CRM is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, take care of and retain those the company already has, attract former clients, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.

Customer relationship management plays an integral part in a typical company's marketing system. CRM is a process of gathering and analyzing customer data, building precise marketing campaigns and managing relationships for optimized retention. These activities are performed over the three phases of customer acquisition, retention and extension or expansion.

1.       Customer Acquisition

CRM can help a business to acquire new customers through contact management, selling, and fulfillment. Acquiring customers is the first important step in establishing business relationships. With CRM, advanced software databases are used to capture key customer data at the point of first contact. Profile data includes a prospect's name, address, phone number, email address and sometimes social media accounts. Entering this data into a computer enables future and ongoing communication access.

2.       Customer Retention

CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives. The real purpose of gathering data on acquired customers is to improve retention rates. The typical customer attrition rate for companies is around 15 to 20 percent per year, but a 2013 Forbes article indicates that some industries experience significantly higher average rates. Effective data analysis, regular and systematic follow-up communication with contacts, and well-serviced accounts help you reduce your company's churn rate. Data analysis allows you to identify the traits of prospects and customers that offer the best lifetime earning potential as well, which enables greater focus on retaining

3.       Customer Extension

Web-enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of one-stop shopping. The customer extension phase of CRM includes activities intended to draw out the length of typical customer relationships, enabling greater revenue. A simple perspective is that satisfying a customer during one buying experience increases the likelihood of a follow-up visit. Over time, delivering quality solutions, following through on commitments and addressing problems convert a buyer into a loyal customer. You also can enhance revenue through add-on product selling and cross-selling, which involves recommending unrelated solutions. Because of the high costs of customer acquisition, extending relationships with customers already captured is hugely valuable for a business.

Benefits and Challenges of CRM

Customer Relationship Management refers to the methodology or process a business uses to study and learn more about customers’ needs and purchasing behaviors in order to develop stronger and longer-lasting relationships with them. CRM allows a business to identify and target its best customers – those who are the most profitable to the business – so they can be retained as life long customers for greater and more profitable service. It makes possible real time customization and personalization of products and services based on customer needs, buying habits, and life cycle. Customer Relationship Management is a system which aims at improving the relationship with existing customers, finding new prospective customers, and winning back former customers. This system can be brought into effect with software which helps in collecting, organizing, and managing the customer information. Some of the benefits are as follows:

 

a)       Improved customer relations 

One of the major benefits of using a CRM is to obtain better customer satisfaction. By using this strategy, all dealings involving servicing, marketing, and selling of products to the customers can be carried out in an organized and systematic way. We can also provide better services to customers through improved understanding of their issues and this in turn helps in increasing customer loyalty and decreasing customer agitation. In this way, we can also receive continuous feedback from the customers regarding to the products and services. It is also possible that the customers recommend us to their connections, when we provide efficient and satisfactory services.

 

b)       Better Customer Service

CRM systems give businesses the ability to personalize and customize relationships with their customers regardless of which employee deals directly with them at any given time. CRM systems maintain a repository of customer profiles, giving employees the ability to treat each client individually. As a result, each employee is better informed about each customer's specific needs. CRM helps the organization easily and quickly modify its level of service in order to match each customer's profile. This improved customer service leads to increased customer loyalty and correspondingly decreases customer dissatisfaction. CRM systems also help the company receive feedback from customers regarding products they have purchased.

c)       More Customers and Revenue

CRM systems help the organization effective identify potential customers. As it keeps track of current customer profiles, the company can generate new strategies to determine which demographics it should target to obtain a wider customer base. By using CRM information, a business can coordinate marketing and promotional campaigns more efficiently by ensuring that such promotions will not target people who are already customers. CRM also ensures increased customer retention through the implementation of loyalty programs.

d)       Simplified Marketing/Sales

CRM helps companies establish better communication channels. Websites, for example, might make business more convenient for the company and its sales representatives. CRM also allows organizations to give customers the option of choosing how they want to be approached or contacted. More importantly, CRM systems speed up the closing of deals because of the increased efficiency in customer leads and information. Turnaround time substantially decreases, thereby benefiting the company. In addition, as different company departments are able to share data, employees can efficiently work as a team, as opposed to working individually or in isolated groups. Despite each department having its own set of objectives, everyone is aware of and working toward the same goals.

e)       Maximize up-selling and cross-selling 

An upsell is to get the customer to spend more money – buy a more expensive model of the same type of product, or add features / warranties that relate to the product in question.

A cross-sell is to get the customer to spend more money buy adding more products from other categories than the product being viewed or purchased.

 

A CRM system allows up-selling which is the practice of giving customers premium products that fall in the same category of their purchase. The strategy also facilitates cross selling which is the practice of offering complementary products to customers, on the basis of their previous purchases. This is done by interacting with the customers and getting an idea about their wants, needs, and patterns of purchase. The details thus obtained will be stored in a central database, which is accessible to all company executives. So, when an opportunity is spotted, the executives can promote their products to the customers, thus maximizing up-selling and cross selling.

 

·         Provides better customer service and increases customer revenues.

·         Discovers new customers.

·         Cross-sells and up-sells products more effectively.

·         Helps sales staff to close deals faster.

·         Makes call centers more efficient.

·         Simplifies marketing and sales processes.

Challenges of CRM

Primary challenges in Implementing CRM:

·         Collecting customer information

·         Storing customer information

·         Accessing customer information

·         Analyzing customer behavior and future prediction

·         Marketing more effectively

·         Enhancing the customer experience

·         Sales and marketing process integration (or automation)

The general reasons that challenge the CRM are:

·         It is too costly to implement the CRM system.

·         Lack of executive or senior management sponsorship

·         Limited business cohesion, unclear goals, or understanding of the business benefits

·         Poor planning, requirements, or goal analysis

·         It is a complex system.

·         Unsuitable or insecure hardware or network platform, challenging the integrity of the system or customer data

·         Provider viewed as too expensive, lacking in expertise, or unable to understand the business model

·         Customizing system perceived as too complicated or not easy to use

·         Poor data conversion that cause data integration obstacles and challenges

·         Unclear gains in customer management efficiency and/or staff productivity

Enterprise Resource Planning (ERP):

ERP is an integrated, real-time, cross-functional enterprise application, an enterprise-wide transaction framework that supports all the internal business processes of a company. It supports all core business processes such as sales order processing, inventory management and control, production and distribution planning, and finance.

An enterprise resource planning system is a fully integrated business management system covering functional areas of an enterprise like Logistics, Production, Finance, Accounting and Human Resources. It organizes and integrates operation processes and information flows to make optimum use of resources such as men, material, money and machine. Enterprise resource planning promises

·         one database,

·         one application,

·         one user interface

 

ERP is very helpful in the following areas:

·         Business integration and automated data update

·         Linkage between all core business processes and easy flow of integration

·         Flexibility in business operations and more agility to the company

·         Better analysis and planning capabilities

·         Critical decision-making

·         Competitive advantage

·         Use of latest technologies

Features of ERP

The following diagram illustrates the features of ERP:

Scope of ERP

·         Finance: Financial accounting, Managerial accounting, treasury management, asset management, budget control, costing, and enterprise control.

·         Logistics: Production planning, material management, plant maintenance, project management, events management, etc.

·         Human resource: Personnel management, training and development, etc.

·         Supply Chain: Inventory control, purchase and order control, supplier scheduling, planning, etc.

·         Work flow: Integrate the entire organization with the flexible assignment of tasks and responsibility to locations, position, jobs, etc.

Benefits and Challenges of ERP

Advantages of ERP

·         Reduction of lead time

·         Reduction of cycle time

·         Better customer satisfaction

·         Increased flexibility, quality, and efficiency

·         Improved information accuracy and decision making capability

·         Onetime shipment

·         Improved resource utilization

·         Improve supplier performance

·         Reduced quality costs

·         Quick decision-making

·         Forecasting and optimization

·         Better transparency

Following are some of the benefits they achieved by implementing the ERP packages:

·         Gives Accounts Payable personnel increased control of invoicing and payment processing and thereby boosting their productivity and eliminating their reliance on computer personnel for these operations.

·         Reduce paper documents by providing on-line formats for quickly entering and retrieving information.

·         Improves timeliness of information by permitting posting daily instead of monthly.

·         Greater accuracy of information with detailed content, better presentation, satisfactory for the auditors.

·         Improved cost control.

·         Faster response and follow-.up on customers.

·         More efficient cash collection, say, material reduction in delay in payments by customers.

·         Better monitoring and quicker resolution of queries.

·         Enables quick response to change in business operations and market conditions.

·         Helps to achieve competitive advantage by improving its business process.

·         Improves supply-demand linkage with remote locations and branches in different countries.

·         Provides a unified customer database usable by all applications.

·         Improves International operations by supporting a variety of tax structures, invoicing schemes, multiple currencies, multiple period accounting and languages.

·         Improves information access and management throughout the enterprise.

·         Provides solution for problems like Y2K and Single Monetary Unit (SMU) or Euro Currency.

Disadvantage of ERP

·         Expense and time in implementation

·         Difficulty in integration with other system

·         Risk of implementation failure

·         Difficulty in implementation change

·         Risk in using one vendor

Supply Chain Management (SCM)

Supply chain management (SCM) is the management of the flow of goods and services i.e. It is management of material and information flow in a supply chain to provide the highest degree of customer satisfaction at the lowest possible cost. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain. Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.

 

Supply chain management is basically the flow of goods and services. It includes the whole process of goods’ movement, storage of raw materials, in-process inventory and good’s consumption from the point beginning to end. The ultimate goal of efficient supply chain management is to reduce the inventory costs for an organization. That ultimately keep track about goods’ consumption and product’s availability when required. Supply chain management keeps an eye on the flow of product, information and finance. All it includes the steps product movement from supplier to manufacturer to wholesaler to retailer to consumer.

According to the Council of Supply Chain Management Professionals (CSCMP), supply chain management includes the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes coordination and collaboration with channel partners, which may be suppliers, intermediaries, third-party service providers, or customers. Supply chain management integrates supply and demand management within and across companies.

The supply chain management (SCM) profession has continued to change and evolve to fit the needs of the growing global supply chain.  With the supply chain covering a broad range of disciplines, the definition of what is a supply chain can be unclear. Often times SCM can be confused with the term logistics management. CSCMP and the board of directors, comprised of industry experts, created official definitions for the following terms.

Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.

Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution--strategic, operational and tactical.

Roles of SCM

·         To decrease inventory cost by more accurately predicting demand and scheduling production to match it.

·         To reduce overall production cost by streamlining production and by improving information flow.

·         To improve customer satisfaction.

Benefits and Challenges of SCM

Effective supply chains give businesses a competitive advantage in the marketplace and help to reduce risks associated with acquiring raw materials and delivering products or services. By implementing supply chain management systems, businesses are able reduce waste, overhead costs and shipping delays in a scientific way. The benefits of this systematic approach impacts areas ranging from product quality to order turn-around times.

·         Quality Assurance

One of the advantages of supply chain management is that it incorporates quality techniques, such as quality management systems, to improve operations.

·         Inventory Buffers

Inventory buffer is the supplies or the products of an organization that are kept available either on hand or in transit to stabilize variations in supply, demand, production, or lead time. In almost every type of business, there is variability in customer spending. This requires companies to manage their inventories in a way that minimizes holding costs while providing enough flexibility to meet customer demands. If inventory levels fall too low, businesses may have to pay overtime to produce products or lose out on revenue by making customers wait or shop somewhere else. Supply chain management systems typically include inventory buffer levels that are pre-determined with careful analysis of historical trends.

·         Shipping Options

As e-commerce continues to grow globally, buyers have more options to order products than ever before. Shipping options need to keep pace with the demands of the marketplace, which requires companies to readjust their supply chains to meet customers’ preferences. Whether it is small parcel shipping or larger bulk orders, shipping in a quick and accurate fashion is key for business success. Supply chain management systems help companies determine the optimal ways to ship while reducing costs to the lowest possible level.

·         Risk Mitigation (Reduction)

Managing risk is a key responsibility for business leaders, and supply chain management systems allow for the identification of critical risk factors in an organization or with their suppliers. Whether it is product quality, compliance with applicable laws or operational safety, management must mitigate risk in an effective manner. Supply chain methodologies assist management with organizing risks and ascertaining the potential for internal or external failures. Without effective supply chain management systems, many companies are exposed to legal risks and liabilities.

1.       Reduce Cost Effects

There are number of ways according to which, supply chain management software can lower down the current overhead expenses of your organization. For example:

·         Improves inventory management system

·         Facilitates successful implementation of inventory system

·         Eliminates damage resources by adjusting the storage space efficiently of finished goods.

·         Make your system more responsive, you can easily achieve your goals by examining customer’s requirements.

·         Stronger your relationship with vendors & distributers.

2.       Raise Output

Supply chain management (SCM) software is designed in way to improve communication, collaboration and coordination with vendors, transportation and shipping companies, Suppliers and raise bi-directional information flow. The streamline & centralized distribution strategy of supply chain management software make it more reliable for end users and give more accurate output results.

3.       Raised Your Business Profit Level

The most stunning feature of SCM software out of top 10 benefits of supply chain management is raise in your business profit level.  Welcoming behavior towards new innovative technologies flourishes new ways of success for your organization.

Higher visibility and improved collaboration features ultimately because a cause of raise your organizational’ output. Top hat will eventually raise your company’s economical graph.

4.       Boost Cooperation Level

The most astonishing feature of supply chain management software is higher cooperation level within the organizational task. Supply chain management software give you access to track what your supplier and distributers are doing all the times and vise versa.

Supply chain management linked up all the business software systems at remote location that automatically improved collaboration in all partners. SCM software gives opportunity to share information. Share information platform keep stakeholders informed, so the whole process of SCM runs smoothly. These collaborations accelerates other tasks like reporting, forecasts, order statuses, quotation and other transportations plans in real time.

5.       Lowers Time Delay in Processes

Delays in SCM often leads to poor relationships with stakeholders and lost of business.  all common issues like Late shipments from vendors, hold-ups on production lines, and logistical errors in distribution channels  are can negatively impact a company’s ability to gratify customer’s demand for products. SCM software’s all activities can be flawlessly coordinated and executed from start to finish, to make sure much higher levels of on-time delivery across the board.

 

E-Commerce System

‘Electronic Commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunications networks’. It encompasses the entire online process of developing, marketing, selling, delivering, servicing and paying for products and services purchased by internetworked, global marketplaces of customers, with the support of worldwide network of business partners.

It is a modern business methodology that addresses the needs of organizations, merchants and consumers to cut cost while improving the quality of goods and services and increasing the speed of service delivered. E-commerce is a recent event and yet evolving. It is a dynamic set of technologies, applications, and business process that link enterprise, consumers and communities through electronic transactions and the electronic exchange of goods, services and information’s. E-Commerce is not about the technology itself, it is about doing business using the technology.

The ecommerce should include:

·         Electronic trading of physical goods and of intangibles such as information.

·         All the steps involved in trade, such as on-line marketing, ordering, payment and support for delivery.

·         The electronic provision of services such as after sales support or on-line legal advice.

·         Electronic support for collaboration between companies such as collaborative on-line design and engineering or virtual business consultancy teams.

Features of E-Commerce

The unique features of ecommerce are as follows:

1.       Ubiquity: E-commerce technology is available everywhere. So it lower the transaction cost for consumer/buyer.

2.       Global Reach: The technology reaches across national boundaries, around the earth. So the e-commerce technologies enable a business to easily reach across geographic boundaries.

3.       Universal Standards: there is one set of technology standards, namely internet standard (TCP/IP and WWW).

4.       Richness: Advertising and branding are an important part of commerce. E-commerce can deliver video, audio, animation and text marketing messages much better than other technology.

5.       Interactivity: Consumer or user can interact with content through the e-commerce technology.

6.       Information Density: The e-commerce technology reduces information costs raises the quality of information

7.       Personalization/Customization: E-commerce technology allows personalized messages to be delivered to individuals as well as groups and customization of products and services.

E-Commerce and its scope

Advantages of E-commerce

There are several advantages of the e-commerce they are:

a)       24*7 operations

Round clock operation is possible without worrying about jams and crowds. Means available anywhere, anytime and anyone can use it.

b)       Economy

E-commerce is economical. There is no rental of physical store space, insurance or infrastructure investment. E-commerce only needs an idea, unique product and well designed web storefront. Thus e-commerce is more cost effective to the merchant.

c)       Better customer service

E-commerce is a means of better and quicker customer services. Web based customer service makes customer happy because they can get quick and direct access to what they want.

d)       Global reach

The Internet being essentially global, it make customer easy to reach world-wide.

e)       Information sharing

Electronic marketplaces improve information sharing between merchants and customers and promote quick, just-in-time deliveries. E-mail is one example of how people collaborate to exchange information and word on solutions.

f)        Customization

Digital products are highly customizable. They are easy to recognize, revise or edit according to consumer taste and preferences.

g)       Team work

People collaborate to exchange information and word on solution. Suppliers, vendors, business partners and customers work together.

Disadvantages of E-commerce

a)       Product may not be up to the quality:

Delays in the shipment of products and payments may be primary concern in e-commerce, without timely delivery of products and quick response to customer complaints it is difficult to improve relation with customers.

b)       System and data integrity

Data protection and integrity of the system that handles the data are serious concerns. Computer viruses cause unnecessary delays, file backups, storage problems and danger of hackers accessing files and corrupting accounts adds more stress to an already complex operation.

c)       Lack of security

It is the major headache of internet. However a business house maintains various protection mechanisms, which is not sufficient. Spamming, spoofing, file corruption and malicious misuse etc are the security issues.

d)       Cultural, Language and trust issues

A firm launching a business in a new country must be aware of the culture as well as the language of the culture. Trust is another issue that needs to be addressed. It is because internet is perceived to be an unreliable environment, so customers are cautious in communication via the internet.

e)       Technical expertise

There is lack of technical expertise in most of the countries. To set up an e-commerce infrastructure, there is need of interactive website, network connection, services and training. All these things require technical expertise.

Electronic Payment Processes

Payment is an integral part of the performing business, whether in the traditional way or online and prompt payment is crucial. If the claims and debit of the various participants are not balanced because of payment delay or even worst default, then the entire business chain is interrupted. Hence, prompt and secure payment is an important aspect of e-commerce for clearing and settlement of credit or debit claims. Electronic payment system is a way of paying for a goods or services electronically, instead of using cash or a check, in person or by mail.

The main stakeholders in payment systems are: consumers, merchants, and financial institution and government regulators. Each of them has their own interest.

·         Consumers are interested primarily in low-risk, low cost, convenient and reliable payment mechanism. Most consumers use cash, checks and credit cards.

·         Merchants are interested primarily in low-risk, low cost, convenient and reliable payment mechanism. Merchants currently carry much of the risks of checking and credit card fraud & much of the hardware cost of verifying payments. They prefer payments made by cash, checks & lesser extend credit card.

·         Financial institutions such as banks and credit card network are primarily interested in secure payment systems that transfer risk and cost to consumer and merchants, while maximizing transaction fees payable to them.

·         Government regulators are interested in maintaining trust in the financial system. Regulator seeks to protect against fraud and abuse in the use of payment systems.

 

There are several types of electronic payment systems that have been developed to provide secure Internet transactions. Electronic payment systems are generally classified into four categories:

·         Credit card and debit cards;

·         Electronic cash;

·         Micropayment systems; and

·         Session-level protocols for secure communications

Credit card:

It is one of most common mode of electronic payment. Credit card is small plastic card with a unique number attached with an account. It has also a magnetic strip embedded in it which is used to read credit card via card readers. Most credit cards are issued by banks or credit unions. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. When a customer purchases a product via credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time period after which he can pay the credit card bill. It is usually credit card monthly payment cycle. Following are the actors in the credit card system.

·         The card holder - Customer

·         The merchant - seller of product who can accept credit card payments.

·         The card issuer bank - card holder's bank

·         The acquirer bank - the merchant's bank

·         The card brand - for example, visa or master card.

Process of credit card transaction:

Credit card payment processing takes place in four phases:

·         Authorization

·         Batching

·         Clearing

·         Funding

Phase 1: Authorization

Step 1:       The card holder requests a purchase from the merchant

Step 2:       The merchant submits the request to the acquirer (a bank that processes and settles a merchant’s credit card transactions with the help of card issuer)

Step 3:       The acquirer sends a request to the issuer to authorize the transaction.

Step 4:       An authorized code is sent to the acquirer if there is valid credit available.

Step 5:       The acquirer authorized the transaction

Step 6:       The card holder receives the product.

Phase 2: Batching

Step 1:       The merchant stores all the day’s authorized sales in a batch

Step 2:       The merchant sends the batch to the acquirer to receive payment

Phase 3: Clearing

Step 1:       The batch is sent through the card network (Visa, Master card or other networks) to request payment for the issuer.

Step 2:       The card network distributes each transaction to the appropriate issuer

Step 3:       The issuer subtracts its interchange fees, which are shared with the card network, and transfers the amount

Step 4:       The card network routes the amount to the acquirer.

Phase 4: Funding

Step 1:       The acquirer subtracts its discount fee and pays the merchant

Step 2:       The merchant receives payment, minus interchange and discount fees.

Debit card:

Debit card, like credit card is a small plastic card with a unique number mapped with the bank account number. It is required to have a bank account before getting a debit card from the bank. The major difference between debit card and credit card is that in case of payment: In case of debit card, purchased amount is immediately deducted from card's bank account and there should be sufficient balance in bank account for the transaction to get completed, whereas in case of credit card there is no such compulsion.

Smart card:

Smart cards serve as credit or ATM cards, fuel cards, mobile phone SIMs, authorization cards for pay television, household utility pre-payment cards, high-security identification and access-control cards, and public transport and public phone payment cards Smart cards may also be used as electronic wallets Smart cards can provide identification, authentication, data storage and application processing. It has the capacity to store customer work related/personal information. Smart card is also used to store money which is reduced as per usage.

Electronic Fund Transfer (EFT)

It is a very popular electronic payment method to transfer money from one bank account to another bank account. Accounts can be in same bank or different bank. Fund transfer can be done using ATM (Automated Teller Machine) or using computer.

Now a day, internet based EFT is getting popularity. In this case, customer uses website provided by the bank. Customer logins to the bank's website and registers another bank account. He then places a request to transfer certain amount to that account. Customer's bank transfers amount to other account if it is in same bank otherwise transfer request is forwarded to ACH (Automated Clearing House) to transfer amount to other account and amount is deducted from customer's account. Once amount is transferred to other account, customer is notified of the fund transfer by the bank.

Electronic bill presentment and Payment (EBPP)

EBPP is a form of electronic billing in which a company presents (sends) its bills and customers pay these electronically over the Internet. It is a fairly new technique that allows consumers to view and pay bills electronically. There are a significant number of bills that consumers pay on a regular basis, which include: power bills, water, oil, internet, phone service, mortgages, car payments etc. EBPP systems send bills from service providers to individual consumers via the internet. The systems also enable payments to be made by consumers, given that the amount appearing on the e-bill is correct. There are two types of EBPP: Biller Direct and Bank aggregator.

Digital wallet:

A digital wallet refers to an electronic device (Smartphone app) that allows an individual to make electronic commercial transactions. It is a virtual payment solution. This can include purchasing items on-line with a computer or using a Smartphone to purchase something at a store. Beside basic financial transactions it also authenticates the holder's identification. For example, a digital-wallet could potentially verify the age of the buyer to the store while purchasing alcohol, poison, condoms, etc.

It is also known as e-wallet. It may also store insurance and loyalty cards, drivers' licenses, ID cards and Web site passwords, etc.

Example of digital wallets:

 Google wallet, PayPal, Apple’s Passbook, Lemon Wallet, Isis, Geode, Square Wallet, Venmo (for Blackberry users), Chirpify (app for fund raising at social networks like Twitter, Instagram), Zipmark (Creates cheques digitally), etc

Legal and ethical issues in electronic commerce

Ethics is the branch of philosophy that studies what is right and wrong?

At the early ages of its emergence, the Internet only became the platform to search information and to communicate by each others. But now, we can say that Internet has been commercialized (thus the term e-commerce emerge).

Nowadays, we can see almost all trading and business activities including banking can be done online. This trend gives a lot of advantages both to consumers and business organizations. However, the bad side about e-commerce also cannot be ignored what we mean the bad side is about the ethical issue in e-commerce. These issues involve the irresponsible parties who always give threats both to consumers and business organization

1.       Web Spoofing

Web spoofing is an electronic fraud relates to the Internet. It occurs when the attacker sets up a fake website which almost totally same with the original website in order to attract consumers to give their credit card number or other personal information. For example is the attacker setup a site called www.micros0ft.comusing the number zero in place of the letter O, which many users sometimes type by mistake?

Users might find themselves in a situation that they do not notice they are using a fake website and give their credit card details or other information.

2.       Cyber Squatting

Cyber squatting is an activity which a person or firm register, purchase and uses the existing domain name belong to the well -known organization for the purpose of infringing its trademarks. This type of person or firm, called cyber squatters usually infringed the trademarks to extort the payment from original trademark’s owner. The extortion of payment occur when they offers the prices far greater than they had purchased the organization’s domain name upon. Some cyber squatters put up critical remarks about the person or company which the domain is meant to represent (eg: www.walmartsucks.com), in an effort to encourage the subject to re-buy their domain from them. The following picture will worth explain the example of cyber squatting.

3.       Privacy attack

This issue is related to consumer. The privacy invasion (attack) occur when the personal details belong to consumers are exposed to the unauthorized party. It may occur in three ways.

a)       Electronic commerce businesses buy information about individuals such as their personal details, shopping habits and web page visitation listings. This can be done with or without the individual’s knowledge by using different computing technologies. A large number of web sites, which require users to create a member name, also ask for personal details. These details are then often sold on to companies to aid in the marketing and selling of their products.

b)       The personal information of consumers being transmit may be intercepted by anyone other than the person whom it is intended. Protecting the privacy of communication is a great challenge, due to the very nature of the online medium, an open network of digital telecommunications. It is technically and economically impossible to patch all the holes through which unauthorized intruders may gain access.

c)       Malicious programs delivered quietly via web pages could reveal credit card numbers, usernames, and passwords that are frequently stored in special files called cookies. Because the internet is stateless and cannot remember a response from one web page view to another, cookies help solve the problem of remembering customer order information or usernames or passwords.

4.       Online Piracy

The online piracy can be defined as unauthorized copyright of electronic intellectual property such as e-books, music or videos. This unethical activity occurs when the Internet users use the software and hardware technology in an illicit manner to transfer the electronic intellectual property over the Internet. For example, some web-based applications such as www.napster.com have enabled large scale exploitation of music samples and audio formats. Software that is available for free of cost on the Internet allows the transfer of music and videos without the authorization of rights holders. Moreover, CD burners and portable MP3 players allow copyright violations to occur rather easily.

5.       Email Spamming

E-mail spamming, also known as unsolicited commercial e-mail (UCE) involves using e-mail to send or broadcast unwanted advertisement or correspondence over the Internet. The individual who spam their e-mail usually called spammer. Many spammers broadcast their e-mail for the purpose of trying to get people’s financial information such as credit card or account bank numbers in order to defraud them. The example of fraud using e-mail is spammers will lure consumers to enter their personal information on fake website using e-mail, forged to look like it is from authorized organization such as bank. The content of e-mail often directs the consumers to the fake website in order to attract them to fill their personal information such as credit card or bank account’s details. This technique is called phishing.

Unit 6: Functional Applications of Information system

 

Introduction to Information system

An information system (IS) is any organized system for the collection, organization, storage and communication of information. An information system (IS) is a group of components that interact to produce information"

A computer information system is a system composed of people and computers that processes or interprets information. In other words it is the collection of technical and human resources that provide the storage, computing, distribution, and communication for the information required by all or some part of an organization..

 

Characteristics of Information system

·         Organize data into information

·         Analysis of information to give knowledge

Computer Reservation System (CRS)

A computer reservations system or central reservation system (CRS) is a computerized system used to store and retrieve information and conduct transactions related to air travel, hotels, car rental, or activities. In other words it is an information system that promotes sales and provides fast and accurate information about availability, price and booking of tourism products and services.

Originally CRSs were developed to facilitate business transactions and booking related to air travel. Later It were extended for the use of travel agencies, hotels, and other tourism and hospitality business to manage their inventory and allow direct access through terminals to check for availability, make reservations and issue tickets. Today, CRSs are of high importance for travel and tourism industry with the main focus on direct reservations.

CRS History

·         It is the first information system that was used in tourism industry.

·         Primarily used as inventory control system by airlines.

·         In 1962 American Airlines introduced SABRE (Semi-Automated Business Research Environment) the first commercial CRS, developed by IBM that was used for:

ü  Generating flight plans for the aircraft

ü  Tracking spare parts

Typical CRS functions:

·         Scheduling crewss

·         Flight schedule information i.e. days and times for flight operated by the airline

·         Availability information : Seat availability on a flight by service class (i.e. economy, business, first class)

·         Fare quotes

·         Reservation information

·         Ticketing information (generating and storing tickets)

·         Refunds and cancellations of existing reservation and tickets

 

Global Distribution System (GDS)

A Global Distribution System (GDS) is a network operated by a company that enables automated transactions between travel service providers (mainly airlines, hotels and car rental companies) and travel agencies. Travel agencies traditionally relied on GDS for services, products & rates in order to provision travel-related services to the end consumers. A GDS can link services, rates and bookings consolidating products and services across all three travel sectors: i.e., airline reservations, hotel reservations, car rentals i.e. it is a primary reservation tool for travel agents.

GDS or Global Distribution System refers to the reservation tool travel agents use when making an air, hotel, car or other travel service booking. And not only do GDSs power the content of ‘traditional’ travel agency platforms, but they also provide pricing, availability and reservation functionality to many online travel agencies.

GDS are global access technologies that allow worldwide real time distribution. It is an integrated system and communication channels that:

·         Incorporates all travel services.

·         Connects service providers with end users.

·         Providing information from all segments of the journey

·         Allow booking and selling of the required services.

GDS is a network or platform that enables travel agencies and their clients to access travel data, shop for and compare reservations options, and book travel. GDS is different from a computer reservation systems, which is a reservation system used by the service providers (vendors).

·         Primary customers of GDS are travel agents (both online and office-based) to make reservation on various reservation systems run by the vendors.

·         GDS holds no inventory; the inventory is held on the vendor's reservation system itself. A GDS system will have real-time link to the vendor's database. For example, when a travel agency requests a reservation on the service of a particular airline company, the GDS system routes the request to the appropriate airline's computer reservations system. This enables a travel agent with a connection to a single GDS to choose and book various flights, hotels, activities and associated services on all the vendors operating in the same route who are part of that GDS network.

·         CRS developed to become GDS (Global Distribution System) - GDS enable costumers to compare and access information about travel, leisure and many other tourism related information

·         CRS mainly focus on direct reservations (e.g. directly in the hotel) and GDS are more of a global database which only manage and organize the reservation

Besides air products, today GDS provide access to:

·         Car rentals

·         Hotel booking

·         Packaged holidays

·         Cruises and ships

·         Railways

·         Local road transport

 

Advantages of GDS

·         The most cost effective tool for buyers of business travel to manage the complexity of supply

·         More than just a reservation tool – integrates the core business processes of tourism business and therefore increase their productivity, speed and performance

·         Worldwide exposure of different enterprises.

·         It allows reservations managers the ability to provide their corporate clients with timely personalized bookings i.e. the manager can offer new features or packages that are updated instantly without having to search elsewhere for the information.

·         GDS distribution is the entry door to corporate bookers.

·         Using corporate guest history reports (such as group’s tastes for entertainment and their average spending profile), the reservations manager can then access GDS to locate the best packages.

·         GDS system is extensively used to broaden the market reach. A single global distribution system is connected through several B2B, B2C, B2E and B2B2C websites

·         Due to GDS connectivity to more and more travel agents, customers and corporate across the world can view and book flight, hotel, tours and transfers on 24 X 7 basis.

·         It allows the update of inventory information like as availability pricing automatically. All the agents and B2C users, get the same faultless information.

Property Management System (PMS)

Property management system is computerized systems that facilitate the management of properties, personal property, and equipment, including maintenance, legalities and personnel all through a single piece of software. In other words It is a well organized management system which manages operating activities of the hotel as well as oversees and coordinates the relationship with the customer and services. They replaced old-fashioned, paper-based methods that tended to be both cumbersome and inefficient. They are often deployed as client/server configurations. It is also known as PMS or Hotel Operating System.

In a competitive market, where customers are demanding and there are hotels to choose from for accommodation, it becomes important from the hotelier’s point of view to create an atmosphere which can attract the customers. Occupancy of the hotel defines the success of the hotel business and looking at this the hotels need to device a system that could help the customers to book their reservation well in advance.

There are many good reasons as to why a hotel should choose a property management system – automated, to enhance the efficiency of the hotel.

A property management system (PMS) offers some valuable benefits to the hotels in maintaining their services of high quality and standards, unmatchable to their competitors.

 

·         Online Reservation and Booking: The best way to promote a hotel property is to attract as much guest as possible. This is no easy task when there are many more in the business. Since, there are many hotels which are still using the manual system of reservation – agents and booking on arrival, the hotel property management software offers online reservation and booking system. This system allows the customers to reserve and book their rooms in advance from any part of the world.

Being an automated system, the online reservation and booking solution update the customer with the confirmation of their booking within seconds and also updates the system with accurate number of unoccupied rooms. This helps the customers to know exact status of the hotel rooms on their schedule visit.

The automated system of hotel property management errors and mistakes like double booking and over booking that can hamper the reputation of the hotel.

·         Front Desk Management: This system deals with the checking and checkouts of the guests, day in day out. It is a tedious job, if done manually. The front desk being the centre of the activities, too much work load – manual, it could make mistakes which can trouble the revenue of the hotels.

When the stakes are high, it is always wise to use technology which offers accuracy. There are invoices, bill generation at the time of check out of the guest. In such situation, the hotel property management software is the best solution that devices a click away bill generation solution which increases the efficiency of the front desk management.

Point of Sales Systems (POS)

It is a computerized network operated by a main computer and linked to several checkout terminals. POS software records each sale when it happens, so your inventory records are always up-to-date. Better still, you get much more information about the sale than you could gather with a manual system. By running reports based on this information, you can make better decisions about ordering and merchandising.

With a POS system:

·         We can analyze sales data; figure out how well all the items on our shelf sell, and adjust purchasing levels accordingly.

·         We can maintain a sales history to help adjust our buying decisions for seasonal purchasing trends.

·         We can improve pricing accuracy by integrating bar-code scanners and credit card authorization ability with the POS system.

Point-of-sale system (POS system, EPOS system) is a system in which point-of-sale terminals are used as input to a digital computer. A point-of-sale terminal is a specialized cash register, credit-card recording system, or ticket dispenser that causes all information on the transaction to be relayed to a central computer. Some point-of-sale systems include credit validation. Better stock, cash, and credit control are maintained by having the data entered into a computer as soon as it is available at the point of sale. Point-of-sale systems are also useful in monitoring petty theft of cash and merchandise.

There are plenty of popular POS software systems that enable us to use add-on devices at our checkout stations, including electronic cash drawers, bar-code scanners, credit card readers, and receipt or invoice printers. POS packages frequently come with integrated accounting modules, including general ledger, accounts receivable, accounts payable, purchasing, and inventory control systems. In essence, a POS system is an all-in-one way to keep track of your business's cash flow.

Features of a POS system include the following:

·         Ease of use. This software has a user-friendly graphical interface.

·         Entry of sales information. Most systems allow us to enter inventory codes either manually or automatically via a bar-code scanner. Once the inventory code is entered, the systems call up the standard or sales price, compute the price at multiple quantities and provide a running total. Many systems make it easy to enter sales manually when needed by letting you search for inventory codes based on a partial merchandise number, description, manufacturing code or vendor.

·         Pricing. POS systems generally offer a variety of ways to keep track of pricing, including add-on amounts, percentage of cost, margin percentage and custom formulas.

·         Updating product information. Once a sale is entered, these systems automatically update inventory and accounts receivable records.

·         Sales tracking options. Different businesses get paid in different ways. For example, repair or service shops often keep invoices open until the work is completed, so they need a system that allows them to put sales on hold. If we sell expensive goods and allow installment purchases, we might appreciate a loan calculator that tabulates monthly payments and if we offer rent-to-own items, we'll want a system that can handle rentals as well as sales.

·         Security. In retail, it's important to keep tight control over cash receipts to prevent theft. Most of these systems provide audit trails so you can trace any problems.

·         Taxes. Many POS systems can support numerous tax rates.

 All of these function essentially as sales and cash management tools, but each has unique features.

Standalone ECRs. These electronic registers operate independently of one another; they are thus the most limited of the three POS system types. They cannot provide their owners with storewide reporting or file sharing; they can merely report the business activity at that particular register. Given their limitations, ECRs are usually used by small independent retailers that feature a limited number of register sites. Indeed, these systems are often well-suited for small businesses because they are the least expensive of the POS options yet nonetheless provide many helpful features, including automatic sales and tax calculation ability; calculation of change owed to the customer; sales report generation capability; capacity to sort food stamps and trading stamps (through programming of function keys); and scanning.

Network Systems. Network or ECR-based point-of-sale systems feature multiple terminals arranged into a primary/secondary configuration. One ECR in the store, equipped with extra memory capacity, serves as the primary terminal and receives data from the secondary terminals. These systems give businesses the added capacity to manage storewide data and transmit data to mainframe or network server.

Controller-Based POS Systems. The top POS systems are controller-based systems in which each terminal is connected to a computer—the "controller" of the system; it receives and stores all sales, merchandise, and credit data. The controller manages the system, checks for errors, and formats data for the main computer used by the enterprise. It does its own sales analysis and does price look-up. Dual-control systems provide additional safety in case of failure. The use of scanners as the input element to these systems eliminates many errors in keyed alternatives. For this reason scanning has become accepted even in mid-sized retail operations as well.

Point-of-sale systems, like many other computer-based innovations, continue to change and develop at a rapid pace. In addition, the demand for POS systems has spawned many new manufacturers, each of which offers a dizzying array of standard and optional POS features to their customers. For example, some electronic POS systems now cover hand-held scanning devices, customer promotions, credit-card confirmations, counterfeit money checks, and staff scheduling. Given the expense involved and the proliferating number of POS software packages, small business owners should make sure that they adequately research both their current and future needs before making a purchase so that they are able to acquire a customized POS system that best fills their current operating requirements and can accommodate future changes in the business. Research will be somewhat daunting because new products are appearing with great frequency—but the choice of implementations which support the right peripherals for the business will often justify a higher price.

 

 

 

 

 

 

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