2. Define MIS.

Explain the framework of ANTHONY and SIMON for understanding the MIS and decision making process. Also discuss the role of MIS at various management levels with examples. MIS is an integrated information system, which is used to provide management with needed information on a regular basis . The term system in MIS implies ORDER, ARRANGEMENT, and PURPOSE. MANAGEMENT INFORMATION SYSTEM MIS is an integrated information system, which is used to provide management with needed information on a regular basis . The term system in MIS implies ORDER, ARRANGEMENT, and PURPOSE. The information can be used for various purposes, -strategic planning -delivering increased productivity -reducing service cycles -reducing product development cycles -reducing marketing life cycles -increasing the understanding of customers' needs -facilitating business and process re-engineering. MIS can also be used across the organization as an information utility to -support policy making -meet regulatory and legislative requirements -support research and development

-support consistent and rapid decision making -enable effective and efficient utilization of resources -provide evidence of business transactions -identify and manage risks -evaluate and document quality, performance and achievements. MAKING INFORMATION AVAILABLE The availability of information is fundamental to the decision making process. Decisions are made within the organization at -STRATEGIC -OPERATIONAL -PROGRAMMES -ACTIVITY LEVEL. The information needs and decision making activities of the various levels of management SENIOR MANAGEMENT Strategic business direction -information for strategically positioning the organization -competitive analysis and performance evaluation, -strategic planning and policy, -external factors that influence the direction etc MID LEVEL MANAGEMENT Organizational and operational functions -information for coordination of work units -information for delivery programmes -evaluation of resources usage -budget control -problem solving -operational planning etc MID LEVEL MANAGEMENT Programme management within units -information for implementing programmes -information for managing programmes -management of resources usage

-project scheduling -problem solving -operational planning etc LINE MANAGEMENT Activity management -information for routine decision making -information for problem solving -information for service delivery etc. MANAGEMENT SUPPORT SYSTEMS The management oriented support systems provide support to various levels of management. Executive Information Systems allow executives to see where a problem or opportunity exists. Decision Support Systems are used by mid-level management to support the solution of problems that require judgement by the problem solver. Line Managers use Management Reporting Systems for routine operational information. FUNCTIONAL INFORMATION SYSTEMS These include -Accounting Information Systems -Marketing Information Systems -Enterprise Information Systems -Decision Support Information Systems -Executive Information Systems -Quality Management Information Systems

-Manufacturing Information Systems -Financial Information Systems -Human resource Information Systems ================================================= -WHAT IS THE OBJECTIVE OF THE MANAGEMENT IN USING MIS THE OBJECTIVE IS TO PROVIDE THE MANAGEMENT, A RANGE OF Business Intelligence Business Performance Management Business rules Data Mining Predictive analytics Purchase order request Enterprise Architecture Information technology management Knowledge Base Online analytical processing ETC ETC =========================================================== -WHAT ARE THE EXPECTATIONS OF THE MANAGEMENT OF MIS The major EXPECTATIONS of MIS are to: reach an understanding of the relevant processes on the basis of the available historic information. This element forms the basis for the development of models, required for forecasting and simulation. provide information on the current situation, especially for early warning purposes, for instance related to issues impacting on business, resources or business status. forecast changes and impacts, either natural or man-made, as an element in vulnerability assessments.

forecast the consequences of policy decisions and measures before they are implemented in reality. This implies evaluating options for several given scenarios based on the possible results and predicted consequences, and selecting the most acceptable alternative. Conceptual frameworks used to provide context to explanations of IS usage in organizations Since the early 1970s, several attempts have been made to categorize IS and to produce taxonomies of IS. Perhaps the first one was made by Gorry and Scott Morton . They used a two dimensions framework to classify IS: (i) managerial level supported by the IS - according to Anthonys framework for managerial activities ; (ii) (ii) type of problem addressed/decision to be made whether structured, semi-structured or non-structured. Managerial activities As a consequence Anthonys framework for managerial activities became a very popular conceptual framework to support explanations of IS use. Dated from mid 1960s Anthonys three levels of managerial activities framework can be associated with the bureaucratic model of organizations that resulted from the industrial era. It might be misleading in the modern situation of flexible organizations acting in a global market with more educated employees that demand autonomy and empowerment. So, alternative and more sophisticated models of managerial activities were also used to illustrate IS usage in modern organizations. Viable System Model (VSM) VSM accounts for two important aspects: it differentiates among five managerial functions that are considered necessary to guarantee autonomy (coordination, control, audit, intelligence, and policy making) and suggests a recursive structure that is essential to assure organizations viability. Besides accommodating explanations similar to those achieved with Anthonys framework, the VSM framework

also provides the basis to explain the necessity/utility of several levels of information provision provided nowadays through the use of data warehousing and OLAP technology . Decision-making When used to support managerial activities, IS are somewhat related to decision making. Therefore, decisions and the decision making process are also a popular dimension in IS taxonomies. Communication With the advent of local area networks, another aspect become important communication. Computers started to be used to support activities that involve communication between several people (e.g., groupware systems). Therefore several features related to the communication process were, in some way, included in taxonomies. Business functions, processes and domains Some IS classifications also focus on organizational activities although they dont address the Anthonys distinction of managerial activities types. It is quite common to classify IS according to the functional area they are used in. New perspectives on IS: dealing with knowledge In recent years it became quite popular to mention that IS deal with knowledge. This isnt particularly new. The first references to computer based systems that deal with knowledge are quite old and have their roots in artificial intelligence applications. Expert systems and their integrating knowledge bases are as old. It is also easy to accept that the models bases that integrate decision support systems deal with some form of knowledge as well. And decision support systems are even older than expert systems. However, the increasing frequency of such mentions to knowledge suggest a change in discourse and might also

indicate that we are living a paradigm shift in the way we perceive IS in organizations. In our view, knowledge manipulation by IS really became an issue. This can be explained as resulting from a combination of several factors that allowed that the focus of computer use in organizations shifted from just dealing with information to interfering with human capabilities for action. Such factors include the following: Widespread use of IS in organizations such as data mining, workflow management systems, e-groups, several communication services available upon the internet that go well beyond the long-standing processing of information according to previously known rules or algorithms; New organizational and social practices enabled by those computer based systems (IT in general) such as: knowledge discovery in databases; workflow management; just-in-time; supply chain management; electronic commerce; customer relationship management; communities of practice; knowledge management; Dissemination of personal computers and mobile computing and communication devices and their interconnection through the internet. Cognition systems Acknowledging that IS deal with knowledge opens up a whole new perspective for looking at IS in organizations: organizations as cognition systems, i.e., systems that exhibit cognition features similar to those that can be found in humans. In fact, organizations can be viewed as collective enterprises where purposeful action is carried out. This action can correspond either to operational action (action to produce the results it is supposed to produce according to its purpose) or to managerial action (action to guarantee the organizations survival and well being). Action demands acting capabilities that, for the cases of intellectual/mental/cognitive action, can be presented as composed by knowledge and intelligence. Knowledge corresponds to images of the internal and external state of affairs, models of the dynamics of the world and other mental images

created based on the others forms of knowledge. Intelligence might include capacities such as to perceive, to memorize, to reason, to imagine, to solve problems, to plan a desired future. Types of knowledge It is possible to use those concepts to look at what IS do in organizations. In what concerns knowledge, we can use a classification of cognitions to distinguish among different types of knowledge: perceptual, conceptual and behavioral. Perceptual knowledge can be associated to whatever can be known through perceptual mechanisms. Conceptual knowledge can be associated to the results of reasoning upon perceptual knowledge and conceptual knowledge. Behavioral knowledge corresponds to knowing how to do something. Manipulation of knowledge representations by IS Representations of any of those types of knowledge are dealt with by IS. For instance, what we normally call data processing systems deal with representations of perceptual knowledge (e.g., records of what exists in a warehouse, what is being sold, the customers names and addresses, etc.). They use forms of deductive reasoning to produce some result that is necessary in an organizations value chain. Management information systems arent very different. They also apply forms of deductive reasoning upon representations of perceptual knowledge. However, the aim of these IS is to produce some form of conceptual knowledge such as management indicators. The decision models of

decision support systems correspond to conceptual knowledge. The role of decision support systems is to support deductive reasoning using those models to produce alternative scenarios for a course of action. These scenarios are a form of conceptual knowledge as well as they result from reasoning. Workflow management systems incorporate descriptions of what to do representations of behavioral knowledge to coordinate action in organizations. Data mining systems carry out inductive reasoning upon perceptual knowledge to produce conceptual knowledge such as customers patterns of behavior. The role played by any type of IS can be re-interpreted according to the cognition system conceptual framework outlined above. In certain cases computers can be viewed as amplifiers of human cognitive capabilities, enhancing human capacity for perceiving, memorizing, reasoning, communicating. In other cases IS became autonomous elements of the cognition mechanisms of an organization (including elements that support communication and interaction among the other elements). They interact with other IS and with humans (directly or through their cognitive amplifiers) to constitute a collective organizational mind. Classification for the various components (topics, species or subsystems) of planning and control systems and to suggest the characteristics of each component. According to Anthony these components or topics include the following: Planning and Control Systems Subsystem Definition Management Control "...the process of assuring that resources are obtained and used effectively and efficiently in the accomplishment of the organization's objectives."

Strategic Planning Technical Control "...the process of deciding on changes in the objectives of the organization, in the resources that are to be used in attaining these objectives, and in the policies that are to govern the acquisition and use of these resources." "...the process of assuring the efficient acquisition and use of resources, with respect to activities for which the optimum relationship between outputs and resources can be approximately determined." Anthony compares strategic planning and management control in a table reproduced below. Category Person primarily involved Number of persons Mental activity Variables Time period Periodicity Procedures Focus Source of information Product Communication problem Appraisal of soundness Anthony defines "managed costs" in making a distinction between management control and technical control. Managed costs involve resources for which an objective decision as to the optimum quantity needed cannot be made, e.g., legal services. (Note: Managed costs are also referred to as discretionary costs in the accounting literature.) Management control involves the whole organization and includes those

Strategic Planning Staff and top management Small Creative; analytical Complex; much judgment Tends to be long Irregular, no set schedule Unstructured; each problem different Tends to focus on one aspect at a time Relies more on external and future Relies more on internal and historical More tangible; action within Intangible; precedent setting precedent Relatively simple Crucial and difficult Extremely difficult Much less difficult Management Control Line and top management Large Administrative; persuasive Less complex Tends to be short rhythmic; set timetable Prescribed procedure, regularly followed All encompassing parts of the organization where managed costs are significant. Technical control, on the other hand, involves only activities where there are no significant managed costs. Management control covers the whole organization, where technical control relates to subunits, or activities of subunits. Psychological considerations are dominant in management control systems, while logical rules apply to technical control systems. According to Anthony, a technical control system is analogous to a

thermostat, while a management control system is highly dependent on the human behavior. Technical control can be programmed based on a set of objective rules. Management control requires subjective judgment. Therefore, failing to make the distinction between management control and technical control can create many problems within an organization. For example, attempts to substitute technical control (e.g., computers) for management control does not work. ================================================= is Simons framework for decision-making? How does it help in MIS design? Simmons decision-making model there are four phases 1) Intelligence phase 2) Design phase 3) Choice phase 4) Implementation phase Initially the problem comes and we are in the intelligence phase thinking of the problem as it comes and then we try to find out what the solution to the given problem and then we move to design phase. In the design phase the way and method to solve the problem is thought and we actually try analyze the problem, we try to find the algorithms and the way that can actually solve the problem and hence we use the genetic algorithm to find the solution to the given problem .After finding the method which is to be applied to the given problem we move to choice phase and here the actual work of finding the best algorithm come .Here we try to find the best algorithm from the given set of algorithm we have the option of choosing the algorithms such as "ACO" algorithm which is called the ant colony optimization algorithm or we have the choice of finding the algorithm such as Simulated annealing (SA) is a related global optimization technique that traverses the search space by testing random mutations on an individual solution. A mutation that increases fitness is always accepted. A mutation that lowers fitness is accepted probabilistically based on the difference in fitness and a decreasing temperature parameter. In SA parlance, one speaks of seeking the lowest energy instead of the maximum fitness. SA can also be used within a standard GA algorithm by starting with a relatively high rate of mutation and decreasing it over time along a given schedule. After deciding that genetic algorithm is the most suitable algorithm for the programming we move to the next step which is the implemetation phase here the real implemeation of the slotuin is done we implemet the

solution to the given problem by using the geneteic algorithm according to the given problem. In the given problem a list of 26 items is given they all have different price, different weights and different volumes. The problem says that we have to find the items which can be fitted in to the given space of the container the number of items chosen to be fitted in to the given space should be such that the weight and the volume of the selected items should not be more than the total allowed volume and weight in the container. The care has to be taken such that the total weight and volume of the selected items should not exceed more than the allowed weight and the volume. ============ THE COMPANY USING THE RATIONAL APPROACH. Basic Guidelines Decision Making 1. Define the problem This is often where people struggle. They react to what they think the problem is. Instead, seek to understand more about why you think there's a problem. Defining the problem: (with input from yourself and others) Ask yourself and others, the following questions: a. What can you see that causes you to think there's a problem? b. Where is it happening? c. How is it happening? d. When is it happening? e. With whom is it happening? (HINT: Don't jump to "Who is causing the problem?" When we're stressed, blaming is often one of our first reactions. To be an effective manager, you need to address issues more than people.) f. Why is it happening? g. Write down a five-sentence description of the problem in terms of "The following should be happening, but isn't ..." or "The following is happening and should be: ..." As much as possible, be specific in your description, including what is happening, where, how, with whom and why. (It may be helpful at this point to use a variety of research methods. Also see http:// www.managementhelp.org/research/research.htm. Defining complex problems: a. If the problem still seems overwhelming, break it down by repeating steps a-f until you have descriptions of several related problems. Verifying your understanding of the problems: a. It helps a great deal to verify your problem analysis for conferring with a peer or someone else.

Prioritize the problems: a. If you discover that you are looking at several related problems, then prioritize which ones you should address first. b. Note the difference between "important" and "urgent" problems. Often, what we consider to be important problems to consider are really just urgent problems. Important problems deserve more attention. For example, if you're continually answering "urgent" phone calls, then you've probably got a more "important" problem and that's to design a system that screens and prioritizes your phone calls. Understand your role in the problem: a. Your role in the problem can greatly influence how you perceive the role of others. For example, if you're very stressed out, it'll probably look like others are, too, or, you may resort too quickly to blaming and reprimanding others. Or, you are feel very guilty about your role in the problem, you may ignore the accountabilities of others. ---------------------------------------------2. Look at potential causes for the problem a. It's amazing how much you don't know about what you don't know. Therefore, in this phase, it's critical to get input from other people who notice the problem and who are effected by it. b. It's often useful to collect input from other individuals one at a time (at least at first). Otherwise, people tend to be inhibited about offering their impressions of the real causes of problems. c. Write down what your opinions and what you've heard from others. d. Regarding what you think might be performance problems associated with an employee, it's often useful to seek advice from a peer or your supervisor in order to verify your impression of the problem. e.Write down a description of the cause of the problem and in terms of what is happening, where, when, how, with whom and why. ---------------------------------------------------3.Define the Goal or Objective In a sense, every problem is a situation that prevents us from achieving previously determined goals. If a personal goal is to lead a pleasant and meaningful life, then any situation that would prevent it is viewed as a problem. Similarly, in a business situation, if a company objective is to operate profitably, then problems are those occurrences which prevent the company from achieving its previously defined profit objective. But an objective need not be a grand, overall goal of a business or an

individual. It may be quite narrow and specific. "I want to pay off the loan on my car by May," or "The plant must produce 300 golf carts in the next two weeks," are more limited objectives. Thus, defining the objective is the act of exactly describing the task or goal. -----------------------------------------------------------------------------------4. Identify alternatives for approaches to resolve the problem a. At this point, it's useful to keep others involved (unless you're facing a personal and/or employee performance problem). Brainstorm for solutions to the problem. Very simply put, brainstorming is collecting as many ideas as possible, then screening them to find the best idea. It's critical when collecting the ideas to not pass any judgment on the ideas -- just write them down as you hear them. ------------------------------------------------------------5. Select an approach to resolve the problem When selecting the best approach, consider: a. Which approach is the most likely to solve the problem for the long term? b. Which approach is the most realistic to accomplish for now? Do you have the resources? Are they affordable? Do you have enough time to implement the approach? c. What is the extent of risk associated with each alternative? ---------------------------------------------------------------------------------------------6. Plan the implementation of the best alternative (this is your action plan) a. Carefully consider "What will the situation look like when the problem is solved?" b. What steps should be taken to implement the best alternative to solving the problem? What systems or processes should be changed in your organization, for example, a new policy or procedure? Don't resort to solutions where someone is "just going to try harder". c. How will you know if the steps are being followed or not? (these are your indicators of the success of your plan) d. What resources will you need in terms of people, money and facilities? e. How much time will you need to implement the solution? Write a schedule that includes the start and stop times, and when you expect to see certain indicators of success. f. Who will primarily be responsible for ensuring

implementation of the plan? g. Write down the answers to the above questions and consider this as your action plan. h. Communicate the plan to those who will involved in implementing it and, at least, to your immediate supervisor. (An important aspect of this step in the problem-solving process is continually observation and feedback.) ------------------------------------------------------------------------------------------7. Monitor implementation of the plan Monitor the indicators of success: a. Are you seeing what you would expect from the indicators? b. Will the plan be done according to schedule? c. If the plan is not being followed as expected, then consider: Was the plan realistic? Are there sufficient resources to accomplish the plan on schedule? Should more priority be placed on various aspects of the plan? Should the plan be changed? -----------------------------------------------------------------------------------8. Verify if the problem has been resolved or not One of the best ways to verify if a problem has been solved or not is to resume normal operations in the organization. Still, you should consider: a. What changes should be made to avoid this type of problem in the future? Consider changes to policies and procedures, training, etc. b. Lastly, consider "What did you learn from this problem solving?" Consider new knowledge, understanding and/or skills. c. Consider writing a brief memo that highlights the success of the problem solving effort, and what you learned as a result. Share it with your supervisor, peers and subordinates ============================================

How the financial systems, facilitated by computer software are important 4. for economy of data processing and administrative efficiency? - Discuss. A business process or business method is a collection of related, structured activities or tasks that produce a specific

service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities There are three types of business processes: 1. Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". 2. Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales. 3. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, . A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos. A business process can be decomposed into several subprocesses[1], which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level. Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company). Business Processes can be modeled through a large number of methods and techniques. For instance, the Business Process Modeling Notation is a Business Process Modeling technique that can be used for drawing business processes in a workflow. a (business) process as a structured, measured set of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how work is done within an organization, in contrast to a product focuss emphasis on what. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action. ... Taking a process approach implies adopting the customers point of view. Processes are the structure by which an organization does what is necessary to produce value for its customers.

This definition contains certain characteristics a process must possess. These characteristics are achieved by a focus on the business logic of the process (how work is done), instead of taking a product perspective (what is done). --- a process must have clearly defined boundaries, input and output, that it consists of smaller parts, activities, which are ordered in time and space, that there must be a receiver of the process outcomea customer - and that the transformation taking place within the process must add customer value. a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. a business process is a series of steps designed to produce a product or service. Most processes (...) are cross-functional, spanning the white space between the boxes on the organization chart. Some processes result in a product or service that is received by an organization's external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these support processes. The above definition distinguishes two types of processes, primary and support processes, depending on whether a process is directly involved in the creation of customer value, or concerned with the organizations internal activities. a set of linked activities that take an input and transform it to create an output. Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient either upstream or downstream. This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. also include the upstream part of the value chain as a possible recipient of the process output. Summarizing the four definitions above, we can compile the following list of characteristics for a business process. Definability : It must have clearly defined boundaries, input and output. 2. Order : It must consist of activities that are ordered according to their position in time and space. 3. Customer : There must be a recipient of the process' outcome, a customer. 4. Value-adding : The transformation taking place within the process must add value to the recipient, either upstream

or downstream. 5. Embeddedness : A process can not exist in itself, it must be embedded in an organizational structure. 6. Cross-functionality : A process regularly can, but not necessarily must, span several functions. Frequently, a process owner, i.e. a person being responsible for the performance and continuous improvement of the process, is also considered as a prerequisite... Importance of the Process Chain Business processes comprise a set of sequential sub-processes or tasks, with alternative paths depending on certain conditions as applicable, performed to achieve a given objective or produce given outputs. Each process has one or more needed inputs. The inputs and outputs may be received from, or sent to other business processes, other organizational units, or internal or external stakeholders. Business processes are designed to be operated by one or more business functional units, and emphasize the importance of the process chain rather than the individual units. 1. In general, the various tasks of a business process can be performed in one of two ways 1) manually and 2) by means of business data processing systems such as ERP systems. Typically, some process tasks will be manual, while some will be computer-based, and these tasks may be sequenced in many ways. In other words, the data and information that are being handled through the process may pass through manual or computer tasks in any given order. The Four Major Process Improvement Areas The point to note here is that, irrespective of the class of the task - whether manual or computerised - it is important that each task - and hence the process as a whole is designed and periodically reviewed, improved, or substituted by another task, with a view to continuous improvement in four major areas: 1. Effectiveness 2. Efficiency 3. Internal control 4. Compliance to various statutes and policies These areas are explained by highlighting typical deficiencies in each of them, as under: Effectiveness

The overall effectiveness of a process is the extent to which the outputs expected from the process are being obtained at all, and is therefore a first measure of the basic adequacy of the process and its capability to fulfill the logical and reasonable expectations of process uses and operators. For example, consider the material procurement process. One of its important tasks is the sub-process for supplier follow-up to ensure timely deliveries of materials. Such a task is considerably less effective if it does not provide accurate and timely purchase order status reports for use of the purchase department staff responsible for follow-up. Efficiency Supposing it has been observed that the average time taken to prepare and send out a purchase order after receipt of a properly prepared intent from the end-user is unacceptably high, leading to delayed customer deliveries and consequent customer complaints. The process of converting the end-users intent to a purchase order is effective because a purchase order is being somehow generated, but its efficiency is very low since it takes an inordinate amount of time and costs considerably more in terms of the cost to the company of the salaries of staff members involved. Internal Control In a scenario where quantities of major raw materials are regularly ordered and consumed, rates are fixed with selected, reliable, approved vendors for an extended period commonly a year. Moreover, let us say that the rate contract does not contain a price escalation clause. This safeguards the organisation from unanticipated price escalation during the period. The rate contract data are stored in the ERP systems database. Whenever materials are to be ordered (with or without a delivery schedule), purchase orders are generated mentioning the rate finalised in the rate contract. An internal control exists to keep the purchase rate constant throughout the year. Suppose, however, it is found that the rate on a purchase order based on a current rate contract is changed to a different value, and the purchase order then sent out to the supplier. This is a serious lapse in internal control, since a change to a higher rate exposes the company to a higher financial liability. Moreover,

the editability of the rate in such a purchase order completely nullifies the internal controls provided by having a rate contract in the first place and including a no-escalation clause in it. There would be a further breach of internal control if it were found that such a PO amendment is actually authorised before sending the purchase order to the supplier. Compliance to various statutes and policies There are certain situations where payments made to consultants or service contractors must be statutorily made after deducting tax at source (T.D.S.), and such T.D.S. amounts must be deposited in government treasury accounts with banks on or before a specified date in the month following the month in which the payments are made. In such cases, if a business process does not provide for deduction of T.D.S. and/or fails to ensure deposition into government accounts by the specified date, then this is a statutory compliance issue that makes the concerned executives liable to civil / criminal legal action. Policies, Processes and Procedures The above improvement areas are equally applicable to policies, processes and detailed procedures (sub-processes/tasks). There is a cascading effect of improvements made at a higher level on those made at a lower level. For instance, if a recommendation to replace a given policy with a better one is made with proper justification and accepted in principle by business process owners, then corresponding changes in the consequent processes and procedures will follow naturally in order to enable implementation of the policy changes. Manual / Administrative vs. Computer System-Based Internal Controls Internal controls can be built into manual / administrative process steps and / or computer system procedures. It is advisable to build in as many system controls as possible, since these controls, being automatic, will always be exercised since they are built into the design of the business system software. For instance, an error message preventing an entry of a received raw material quantity exceeding the purchase order quantity by greater than the permissible tolerance percentage will always be displayed and will prevent the system user from entering such a quantity.

However, for various reasons such as practicality, the need to be flexible (whatever that may signify), lack of business domain knowledge and experience, difficulties in designing/ writing software, cost of software development/modification, the incapability of a computerised system to provide controls, etc., all internal controls otherwise considered to be necessary are often not built into business systems and software. In such a scenario, the manual, administrative process controls outside the computer system should be clearly documented, enforced and regularly exercised. For instance, while entering data to create a new record in a material system databases item master table, the only internal control that the system can provide over the item description field is not to allow the user to leave the description blank in other words, configure item description as a mandatory field. The system obviously cannot alert the user that the description is wrongly spelt, inappropriate, nonsensical, etc. In the absence of such a system-based internal control, the item creation process must include a suitable administrative control through the detailed checking, by a responsible officer, of all fields entered for the new item, by comparing a print-out taken from the system with the item data entry sheet, and ensuring that any corrections in the item description (and other similar fields where no system control is possible) are promptly carried out. Last but not least, the introduction of effective manual, administrative controls usually requires an overriding periodic check by a higher authority to ensure that such controls are exercised in the first place. Information Reports as an Essential Base for Executing Business Processes Business processes must include up-to-date and accurate Information reports to ensure effective action. An example of this is the availability of purchase order status reports for supplier delivery follow-up as described in the section on effectiveness above. There are numerous examples of this in every possible business process. Another example from production is the process of analysis of line rejections occurring on the shop floor. This process should include systematic periodical analysis of rejections by reason, and present the results in a suitable information report that pinpoints the major reasons, and trends in these reasons, for management to take corrective actions to control rejections and keep them within acceptable limits. Such a process of analysis

and summarisation of line rejection events is clearly superior to a process which merely inquires into each individual rejection as it occurs. Business process owners and operatives should realise that process improvement often occurs with introduction of appropriate transaction, operational, highlight, exception or M.I.S. reports, provided these are consciously used for dayto-day or periodical decision-making. With this understanding would hopefully come the willingness to invest time and other resources in business process improvement by introduction of useful and relevant reporting systems. A financial management infor mation system, or integrated financial management infor mation system (IFMIS), is an infor mation system that tracks financial events and summarizes financial infor mation. In its basic form, an IFMIS is little more than an accounting system configured to operate according to the needs and specifications of the environment in which it is installed. Generally, the term IFMIS refers to the use of infor mation and communications technology in financial operations to support management and budget decisions, fiduciary responsibilities, and the preparation of financial reports and statements. In the government realm, IFMIS refers more specifically to the computerization of public financial management (PFM) processes, from budget preparation and execution to accounting and reporting, with the help of an integrated system for financial management of line ministries, spending agencies and other public sector operations. The principal element that integrates an IFMIS is a common, single, reliable platform database (or a series of interconnected databases) to and from which all data expressed in financial terms flow. Integration is the key to any successful IFMIS. In a nutshell, integration implies that the system has the following basic features: ? Standard data classification for recording financial events;

? Internal controls over data entry, transaction processing, and reporting; and ? Common processes for similar transactions and a system design that eliminates unnecessary duplication of data entry. Integration oftentimes applies only to the core financial management functions that an IFMIS supports, but in an ideal world it would also cover other infor mation systems with which the core systems communicate, such as human resources, payroll, and revenue (tax and customs). At a minimum, the IFMIS should be designed to interface with these systems IFMIS: WHAT IT DOES An IFMIS stores, organizes and makes access to financial infor mation easy. It not only stores all the financial infor mation relating to current and past years spending, but also stores the approved budgets for these years, details on inflows and outflows of funds, as well as complete inventories of financial assets (e.g., equipment, land and buildings) and liabilities (debt). The scale and scope of an IFMIS can vary, from simple General Ledger System to a comprehensive system addressing Budget, Revenue, Expenditure Control, Debt, Resource Management, Human Resources, Payroll, Accounting, Financial Reporting, and Auditing processes across central government or even including local government and other public sector and quasigovernmental agencies and operations. ? Provide timely, accurate, and consistent data for management and budget decision-making; ? Support government-wide as well as agency-level policy decisions; ? Integrate budget and budget execution data, allowing greater financial control and reducing opportunities for discretion in the use of public funds; ? Provide infor mation for budget planning, analysis and government-wide reporting; ? Facilitate financial statement preparation; and ? Provide a complete audit trail to facilitate audits. By recording infor mation into an integrated system that uses common values, IFMIS users can access the system and extract the specific infor mation they require to

carry out different functions and tasks. All manner of reports can be generated: balance sheets, sources and uses of funds, cost reports, returns on investment, aging of receivables and payables, cash flow projections, budget variances, and performance reports of all types. Some systems have libraries consisting of hundreds of standard reports. Managers can use this infor mation for a variety of purposes: to plan and formulate budgets; examine results against budgets and plans; manage cash balances; track the status of debts and receivables; monitor the use of fixed assets; monitor the performance of specific departments or units; and make revisions and adjustments as necessary, to name a few. Reports can also be tailored to meet the reporting requirements set by external agencies and international institutions like the IMF. IFMIS can be called on to support. These include the typical functions that make up the PFM cycle, from budget formulation to budget execution and review, to audit and evaluation of financial performance and results PANDORAS BOX Once the decision is made to introduce a new IFMIS system, a plethora of issues needs to be anticipated and planned for. These include issues related to: ? Legal framework ? Business/functional processes ? Organizational arrangements ? Budget classification structures ? Chart of accounts ? Change management ? Systems requirements/specifications ? Systems development ? Procurement/tender of software and hardware ? Configuration of software and hardware ? Data conversion/migration ? Testing and training ? Corruption As each issue is addressed, so a Pandoras box of unknowns is opened for each, as each country situation presents challenges that, if ignored, decreases the potential for successful IFMIS implementation. Some of the above issues are discussed briefly below to arm

the reader with a basic understanding of the dimension of the challenges that can be faced. How much attention to devote to each issue depends on a variety of factors, including existing conditions, donors time horizon, and other factor ############################################