Pepsi MIS

MANAGEMENT INFORMATION SYSTEM

CASE STUDY

MEHRAIZ HASSAN (AL-541750)

ABSTRACT

The role of Management Information Systems is described and analyzed in light of its

capability for decision making. Decision making process and its impact on top level

management in a business organization is explained with an emphasis on automated

decision making. Limitations and challenges of MIS are discussed and a set of six

recommendations proposed for increasing the effectiveness of MIS in the decision

making process.

In today’s business world, there are varieties of information systems such as TPS, DAS,

KWS, MIS, DSS, ES, CSCWS, GDSS and ESS. Each plays a different role in

organizational hierarchy and decision making process. In this article the authors have

selected two main information systems, namely, MIS and DSS. After discussing the

decision making process based on each concept, its characteristics, relations,

connections of each concept to decision-making process have been determined. At the

same time, different models and figures are presented to enrich the discussion and to

highlight precisely the status of each MIS and DSS information system in organizational

decision making.

MANAGEMENT INFORMATION SYSTEM (MIS) ASSIGNMENT # 2

INTRODUCTION

For the last twenty years, different kinds of information systems are developed for

different purposes, depending on the need of the business. Transaction Process

Systems (TPS) function in operational level to process large amount of data for routine

business transactions of the organization, Office Automation Systems (OAS) support

data workers and Knowledge Work Systems (KWS) support professional workers.

Higher-level systems include Management Information Systems (MIS) and Decision

Support Systems (DSS). Expert System (ES) applies the expertise of decision makers

to solve specific, unstructured problems. At the strategic level of management, there is

Executive Support Systems (ESS). Group Decision Support Systems (GDSS) and the

more generally described Computer Supported Collaborative Work (CSCW) systems

aid group level decision making of a semi structured or unstructured decision. In the

present article the authors discuss two kinds of information systems, namely, MIS, and

DSS, and then their characteristics, interrelationship and their relations with decision-

making process in an organization.

In introduction of our research we will say that it’s about the development in technology

and choosing the right option among many alternatives available in the market. In these

pages we discussed that how information systems are helping in different business

processes for this we have studied the Pepsi Corporation. I have selected PEPSI

CORPORATION for our research; PEPSICO is a multinational company and has

franchises throughout the world. PEPSICO is well known for its Pepsi beverage

products. This multinational corporation is also responsible for the production of Frito-

Lay, Gatorade, and Tropicana and Quaker products. PEPSICO INC. is one of the

world’s largest food and beverage companies with annual revenues of $33 billion. Its

principal businesses include Frito-Lay snacks, Pepsi-Cola beverages; Gatorade sports

drinks, Tropicana juices and Quaker foods. Its portfolio includes 17 brands that

generate $1 billion or more each in annual retail sales.

MEHRAIZ HASSAN (AL-541750) Page 2


PEPSI COLA Company includes in beverages industry. PEPSI COLA international is

well reputed multinational company which is doing its business in almost every country

of the world. The company is registered in New York stock exchange U.S.A. to make a

better control over the business the company has given the manufacturing rights to

different companies. Now these companies are producing the products on the behalf of

the company by using their trademark. To maintain their goodwill in the market the

company has a strict policy while granting the manufacturing rights PEPSI-COLA have

standardized products all over the world (e.g. same in size, shape and quality). The

franchises have to follow all the standards as given by the company. Even they have

the mobile team, which check the company after 2 or 3 months. Either company is

producing products according to the standards given by the PEPSI COLA international.



BACKGROUND

Pepsi made its first appearance in the world in 1890s. Pharmacist Calrb Bradham of

New Bern, North California, is the man to be credited with the production of this drink.

He introduced the drink in the name of “Brad’s Drink”. Later, it came to be known as

‘Pepsi’, probably due to the use of digestive enzymes, such as peps and kola nuts in its

preparation. The product got its trademark on June 16, 1903. Bradham shifted the

bottling of the drink from his drugstore to a rented warehouse in the year 1903. Since

then, the product has never looked back. It got its first official logo in 1905, which was

eventually changed in 1926 and then again in 1929. In 1909, Pepsi was introduced to

the whole world through its first celebrity endorser, Barney Oldfield.

In the year 1931, due to the disastrous effect of World War I, there was sudden

fluctuation in the price of sugar, which led Pepsi-Cola Company into bankruptcy. Pepsi

managed to stand once again, against the pressures of the Great Depression. In 1936,

12-ounce bottles of the soft drink were re-introduced, which were originally priced at 10

cents each. This found fewer sales for itself and then the producers thought of bringing

the rate down to 5 cents. This brought a boost to the company, which it badly required

at this point of time. They aired an advertising campaign on the radio as well, with a

beautiful jingle. This campaign did wonders for the drowning Pepsi Company and

eventually doubled the Pepsi-Cola’s profit.

Pepsi started growing as a world brand due to the well-planned and systematically

organized marketing and campaigns. In 1940s, Walter Mack was appointed the new

President of Pepsi-Cola, who found the missing strategy in the advertising campaigns of

Pepsi. He discovered that the advertising somehow missed the African Americans, who

could contribute to a major share in the popularity of the brand. He, therefore, appointed

Hennah Smith, an advertising persona from the African American community, to focus a

sales team upon the blacks. The effort had to be discontinued in the middle, owing to

the onset of World War II. However, in 1947, Mack came back with the same goal and



appointed Edward F. Boyd for the same. This worked as a positive effort in making

Pepsi’s foothold strong in these unexplored regions.

The year 1975 saw open challenge between Pepsi-Cola and the rival Coca-Cola. The

public voted in favor of Pepsi, which was telecasted through the media. This further

encouraged the growth and popularity of the drink. Several marketing campaigns were

followed through the years, which boosted the sale of Pepsi to unimaginable heights.

The company kept on redesigning the Pepsi cans and in the year 2007, the can was

changed for the fourteenth time. Pepsi sponsored many international cricket games,

which certainly gave another platform for the company to reach globally. Today, it uses

such slogans that make it recognizable in every part of the world. Slogans like “Yeh Dil

Mange More” and “My Pepsi My Way” keep the brand rocking everywhere.



OBJECTIVES

The objective that the Pepsi Company wishes to achieve is that it wants to remain and

continue to be the best or number one beverage company in world.

SCOPE:

In Pepsi the agile inter-company scope of strategic fit is essential because the

competitive playing field has shifted from company versus-company to supply chain

versus supply chain. Strategic scope must cover all boxes, at least at the supply chain

end. Pepsi is expending their scope as they are increasing their product line by adding

Pepsi Max, mountain dew and Miranda apple to their beverage line.

TARGET USER:

Pepsi customers are mostly young group between the ages of 14 to 30 and also target

at School, Collages, Universities, Homes, Restaurant, Hotel and Stores. PepsiCo’s

target market can be people of all ages because of their wide range of products: they

include Gatorade, lays, Tropicana, and quicker, and their products are classified under

many categories. Their target market is very diverse.

MAJOR CHARACTERISTICS OF MIS IN THE ORGANIZATION

In general, management information systems have a number of characteristic, which

include the following:

Report with fixed and standard formation. For example scheduled reports for

inventory control may contain the same type of information placed in the same

location on the reports.



Have report developed and implemented using information system personnel,

including systems analysts and computer programmer. Typically analysts and

programmers are involved in developing and implementing MIS reports. User is

normally involved in the design of the reports, but they are not typically involved

in writing the computer programs to produce them.

Require formal request from user. Because information systems personnel

typically develop and implement MIS reports, a formal request to the information

systems department for report is usually required.

Produce scheduled and demand reports. The major type of reports produced by

an MIS is scheduled; demand reports.

External data is not captured by the organization but is used by the MIS. (i.e. customer,

supplier and competitor information).

CURRENT SITUATION

BUSINESS PROCESSES:-

There are so many products, operations and offices require massive coordination of

each department, activity, geographic location and employees. PepsiCo uses MySAP

business suit applications in the management of their enterprise resource management.

CURRENT BUSINESS APPLICATION

ENTERPRISE RESOURCE PLANNING SYSTEM:-

The ERP corporate portion of MySAP servers to help streamline the processes of

everyday business to reduce costs. It has reduced the number of steps needed to

accomplish a single activity by not sending it through as many departments. Also



induced is a tool related to reducing travel expense, there is of course a portion of the

software devoted to financial and management accounting. These programs are linked

to the production lines and sales software in order to automatically account for certain

expenditures and sales.

SUPPLY CHAIN MANAGEMENT SYSTEM:-

Pepsi Co is in charge of managing the suppliers of many of its smaller subsidies’. Right

now PepsiCo has many bottling plants situated all over the world. PepsiCo must make

sure that all of its supplies come into an appropriate plant so as to keep customers

satisfied with no shortages, yet not make too much additional inventory in stock which

hangs up extra resources and cash flows. PepsiCo also has been trying to broaden

their supplier’s base.

CURRENT CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS:-

Businesses use customer relationship management systems to capture and integrate

customer data all over the organization, consolidate the data, analyze the data and then

distribute the results to various systems and customer touch points across the

enterprise. These systems are useful in improving sales, marketing and customer

services in a business, Pepsi’s current CRM application has allowed for conversion of

farmer desperate sales system into an integrated internet application solution. The use

of real time information is also used to improve customer interaction and satisfaction

through the use of help desk, customer representatives and allowing customers

themselves access to real time information.

PROPOSED ENTERPRISE SYSTEM

ERP SYSTEM:-

Something that PepsiCo could do to improve their ERP is to take advantage of the

business process outsourcing. For growing number of organization, outsourcing

peripheral, business process outsourcing, to external providers is becoming an



attractive, cost effective alternative to handle them internally. By outsourcing non –core

business process such as human resources and procurement, companies can focus

more on core competencies and free up valuable resources to drive growth and

innovation, which is essential in today’s tough market.

CRM:-

Pepsi’s CRM application seemed to have greatly improved after trying a variety of

software systems. Currently, Pepsi is using MySAP enterprise applications, where had

previously used other applications including Oracle’s people soft. We see the current

CRM application as being very beneficial to the company. One proposition that would

likely improve the system is integration of a CRM application across all subsidiaries

under the Pepsi name. This will allow for further interaction between the company and

customers to see where improvements in interaction can be made, as well as to

determine overall profitability of the customers. We also feel the CRM application can

be used to develop future marketing campaigns designed to meet the needs and

desires of customers in specific areas.

An information management system enables an organization to perpetually store and

receive data. These kinds of systems are used throughout a business to store, for

example, customer information or product information. Some of these systems, because

of the size of the business, are large and hierarchical, while some are simple and exist

just to make life easier for the business. The following are a few of the typical

management information systems.

CUSTOMER INFORMATION SYSTEM:-

Many businesses will want to keep track of their customers. They might want to store

email addresses, phone numbers and mailing addresses because, for example, they

want to tell customers about a new product or send them the annual catalog. A

business may want to keep track of how much the customer has spent with the

company or how many orders the customer has placed. Some companies may just

work on an order-by-order basis, or have such few clients that a customer database is

unnecessary.


http://www.ehow.com/business/

http://www.ehow.com/business/


DEVELOPING INFORMATION SYSTEMS:-

"The actions that are taken to create an information system that solves an

organizational problem are called system development". These include system analysis,

system design, programming/implementation, testing, conversion, production and finally

maintenance. These actions usually take place in that specified order but some may

need to repeat or be accomplished concurrently.

Conversion is the process of changing or converting the old system into the new. This

can be done in four ways:

Direct cutover – The new system replaces the old at an appointed time.

Pilot study – Introducing the new system to a small portion of the operation to

see how it fares. If good then the new system expands to the rest of the

company.

Phased approach – New system is introduced in stages.

Management Information Systems (MIS) not only include software systems, but the

entire set of business processes and resources that are used to pull together

information from functional or tactical systems. Data is then presented in a user-friendly

and timely manner so that mid and upper-level managers can use it to take the right

actions. The entire system is designed so that the company will meet its strategic and

tactical goals.

Pepsi’s MIS program provides the skill set to enter any of the following general areas

within the information technology arena. We have successful alumni who are

employed in all of these areas and their success has been based on the skills they

acquired from our program.

1. Analyst / Project Manager -- As stated above, this is the currently the most

common path for the MIS professional and most entry level jobs for MIS majors

fall into this category. The two central courses in the MIS curriculum (MIS 3360


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

http://en.wikipedia.org/wiki/Software_release_life_cycle#General_availability_.28GA.29

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

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

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

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

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

http://en.wikipedia.org/wiki/Systems_development_life-cycle


Systems Analysis and Design and MIS 4474 IT Project Management) provide the

core skill set for the program.

2. Database Technologies -- Central to most every technology application is the

database where the transaction and archival data resides. The MIS 3376

Database Management Systems course is a required skill (with an advanced

course MIS 4397 Database Management II available as a senior elective option).

The typical technology role here is the "database administrator" (called DBA).

Emerging technology areas in the database arena involve: data warehousing

(development of large integrated data storage environments); data mining, data

modeling or business analytics (the use of various analysis tools to extract

historical patterns and develop projections for the future); and business

intelligence (the use of tools to scan external data environments and couple

findings with internal data in order to discern trends and opportunities relevant to

the success of the business).

3. IT Infrastructure -- The role of computer hardware, networking, security and

communications technologies continues to expand with "mobile technologies"

and "cloud computing" becoming a common part of every corporate computing

environment. This area continues to grow and offer new job opportunities for MIS

professionals as the existing technologies mature and new infrastructure

opportunities are implemented.

4. IT Consulting -- In addition to roles in traditional corporate MIS environments,

consulting firms provide another employment avenue for our graduates. There

are many large and small technology consulting firms that provide expertise in all

areas of MIS. These firms are often employed to provide: specialized IT

solutions; large-scale project development alternatives; and MIS planning and

strategic management services.



5. IT Audit and Compliance -- New to the MIS arena is the emergence of IT

auditing and compliance. These new roles result from the legal requirements of

Sarbanes-Oxley (aka SOX). See for example this. The intent of the law it to

assure that publicly traded corporations insure that risks of fraud in financial

reporting are minimized. This had resulting in significant internal controls being

established for financial reporting and transaction processing systems. Most

large public accounting firms offer Sarbanes-Oxley advisory services.

PRODUCT INFORMATION SYSTEM:-

A business also may want to have a product system in place to store and receive

product information. With product information, a business can keep track of the name of

the item, its size, its weight and its price. A business may also want to keep track of

items by using a product code or product number. Other information may be available

for each product, such as whether it gets free shipping or has a discount during a

certain sale. Information from the product database is sometimes used directly on the

website or in the catalogs.

EMPLOYEE INFORMATION SYSTEM:-

Businesses will want to keep track of their employees names, addresses and phone

numbers for general contact information. They also need to keep track of employee

wages and the amount of hours employees have worked. For tax purposes they need to

keep track of exemptions claimed.



STRUCTURE

ASSES THE IT INFRASTRUCTURE:-

HP today announced it has signed a seven-year global services agreement with

PepsiCo, Inc., (NYSE: PEP) to provide data center management services and

infrastructure consolidation for the company’s PepsiCo International division.


http://h71028.www7.hp.com/enterprise/cache/141741-0-0-225-121.html

http://h20219.www2.hp.com/services/cache/9516-0-0-225-121.html

http://www.google.com.pk/imgres?imgurl=http://www.pepsico.com/images/corporateProfile_pepsicoStructure.jpg&imgrefurl=http://www.pepsico.com/Investors/Corporate-Profile.html&usg=__PnqRETCa_Zlr8jGKRJffAjCs0n8=&h=309&w=520&sz=83&hl=en&start=1&zoom=1&tbnid=mDvAULzKjaRoBM:&tbnh=78&tbnw=131&ei=Ly-wTfDEBIur8APj2Jj2Cw&prev=/images?q=structure+of+pepsico&hl=en&biw=1362&bih=532&gbv=2&tbm=isch&itbs=1

http://www.google.com.pk/imgres?imgurl=http://www.pepsico.com/images/corporateProfile_pepsicoStructure.jpg&imgrefurl=http://www.pepsico.com/Investors/Corporate-Profile.html&usg=__PnqRETCa_Zlr8jGKRJffAjCs0n8=&h=309&w=520&sz=83&hl=en&start=1&zoom=1&tbnid=mDvAULzKjaRoBM:&tbnh=78&tbnw=131&ei=Ly-wTfDEBIur8APj2Jj2Cw&prev=/images?q=structure+of+pepsico&hl=en&biw=1362&bih=532&gbv=2&tbm=isch&itbs=1


HP will consolidate PepsiCo International’s technology infrastructure into three HP data

centers located in Mexico, Singapore and the United Kingdom. These data centers will

support PepsiCo business operations in more than 60 countries outside the United

States and Canada.

This initiative will migrate PepsiCo International to a standardized storage and server

architecture that provides capability upgrades in the areas of application management,

network security, disaster recovery, asset management and operations support. HP will

use a variety of storage and server systems, tools and software to manage PepsiCo

International’s new data center environment.

In addition, with PepsiCo International choosing BT as its network provider, there will be

more opportunities for the HP and BT alliance to help increase service integration and

innovation for PepsiCo International.

HP have closely collaborated with PepsiCo International to build an IT environment that

will help them become more adaptive,” said John E. Evers Jr., vice president and

general manager, Managed Services – Americas, HP. “By standardizing and optimizing

its server environment, PepsiCo International can better flex to meet its changing

business needs and in turn provide better service to customers anywhere in the world.

PROBLEM STATEMENT

All companies are at risk of encountering a crisis. It is their response to the crisis that

will determine their future. As Richard Bierck states, “A firm’s failure to respond

effectively in the face of public scrutiny can be more destructive than the emergency

itself.” The first step in effectively responding to a crisis is to have a crisis management

plan already in place.

HAVING A PLAN:-

Product tampering is particularly damaging for food and beverage

manufacturers. Consumer confidence in the product and the brand name can be


http://welcome.hp.com/country/us/en/prodserv/servers.html

http://welcome.hp.com/country/us/en/prodserv/storage.html


destroyed quickly and may take years to overcome. Because of this, PepsiCo had

created a crisis plan with procedures for dealing with product tampering. PepsiCo’s

crisis team included employees from all the major divisions: scientific and regulatory

affairs, manufacturing, public affairs, sales, marketing, and legal counsel. The goal of

this team was to “ensure consumer safety and security while protecting 95-year old

trademark and maintaining a positive image amidst a blitz of often negative media

attention.

GETTING CONTROL OF THE SITUATION:-

In a crisis situation, the first step a company must take is to define the real problem and

then set communication objectives to handle it (232). When the first two complaints of

syringes found in Diet Pepsi cans were reported in Washington State, PepsiCo

considered it a regional issue. PepsiCo’s local management worked with their regional

bottler to check the product line while the FDA tested the syringes for contamination.

When a third syringe was reported, this one in New Orleans, PepsiCo realized that this

was becoming a national issue and assembled their crisis team. PepsiCo determined

that it was almost impossible that these tampering reports could be genuine. The real

problem was how to stop the false reports and how to communicate to the public that

there was no danger.

GATHERING INFORMATION:-

A company’s reaction to a crisis must be based on a thorough understanding of the

problem. Rebecca Madeira, Vice President of Public Affairs, became the crisis

coordinator for the Diet Pepsi emergency. Her immediate concern was to determine

whether or not the public was at risk. Once the FDA had tested the first two syringes

and found that there was no risk of contamination, PepsiCo and the FDA together

decided that there was no need for a product recall. In the meantime, PepsiCo

researched employee records, shipping and customer inventories, and consumer

complaints to see if there were any indications that their production lines could have

been subverted in any way. Based on their research and on the statistical improbability

of such tampering occurring in numerous bottling plants over the span of several



months, management and employees at PepsiCo were confident that the syringes

reportedly found in their soda cans were not the result of product tampering but of

fraudulent complaints.

SETTING UP CRISIS MANAGEMENT CENTER:-

While the corporation is gathering information, they must also be creating a crisis center

to “serve as a platform for all communications during the crisis”. PepsiCo wasted little

time in assembling their crisis management team and establishing a crisis center.

UNDERSTANDING MEDIA'S MISSION:-

The media was creating a panic among consumers with its sensationalized display of a

Diet Pepsi can with a syringe. PepsiCo’s crisis team understood that they had to use

this same media to deliver their own message to consumers: that they had determined

with “99.999 percent certainty” that the syringes could not have been inserted in a

production line that fills thousands of cans per minute. PepsiCo’s media messages were

so effective that by Wednesday night, one day after Mr. Weather up’s first television

appearances, crisis team members noticed that news reports were beginning to use

words such as “copycat” and “hoax” when reporting new tampering cases.

COMMUNICATING QUICKLY AND FREQUENTLY:-

Prompt communication in a crisis is critical to calming consumer panic. A corporation’s

spokesperson must communicate as soon as possible, and must issue “updates at

regular intervals” to all of their constituencies.

Once the decision had been made to use the television media to communicate to their

constituencies about the crisis, PepsiCo immediately went on the offensive. On

Tuesday, June 15, PepsiCo asked one of their vendors, Robert Chang Productions, to

produce a video news release (VNR) showing the soda canning process. The video

showed how each can was inverted, cleaned with pressurized water or air, and then

flipped again and immediately filled with soda, all in less than one second. This first

VNR was viewed that same day by 187 million viewers on 403 stations.



In all, PepsiCo produced four VNRs during the crisis, including the first one showing the

soda canning process. But the most powerful VNR was created using surveillance

footage from a Colorado retailer which showed a woman inserting a syringe into a can

of Diet Pepsi as the store clerk looked away. All of these VNRs were very effective in

convincing consumers that the tampering reports were hoaxes. FDA arrests of

individuals accused of filing false reports reinforced PepsiCo’s affirmations.

In addition to their efforts in the mass media, PepsiCo also kept other lines of

communication open during the crisis. PepsiCo sent faxes to all of its regional bottlers

twice daily to keep them apprised of any developments, and PepsiCo employees

continued to respond to calls made to the company’s toll-free line from consumers,

bottlers, and distributors.



STRATEGIES OF INFORMATION SYSTEM

Every business should have a business strategy - this is a long-term plan which shows

the direction the business is taking. The business strategy provides an agreed set of

objectives for the business.

To formulate a business strategy, a SWOT analysis (Strengths, Weaknesses,

Opportunities, and Threats) may be carried out to identify internal and external factors

that have an impact on the business. Threats might include competitors who can come

up with better products or over-reliance on a particular supplier. IT can be used to

improve security and this can prevent competitors stealing product ideas. A business

strategy might, for example, include plans for new products and new markets; it might

involve selling the business or buying other businesses. A business strategy is

important because it allows resources to be targeted and also because it allows the

shareholders, customers, banks and employees (the stakeholders of the business) to

see that the business is taking account of their interests. The Information Systems

Strategy is one part of the business strategy. It will inevitably require resources and it

may require a change in working practices within the organization.

The I.T. strategy is concerned with the planning, introduction and use of IT resources for

the benefit of the whole organization. In formulating this strategy, it is important to

identify the information needs of the organization. It must be led by the needs of the

organization and not by the availability of the technology.

BUSINESS ORGANIZATION:-

An entity formed for the purpose of carrying on commercial enterprise. Such an

organization is predicated on systems of law governing contract and exchange, property

rights, and incorporation. Business enterprises customarily take one of three forms:

individual proprietorships, partnerships, or limited-liability companies. In the first form, a

single person holds the entire operation as his personal property, usually managing it on



a day-to-day basis. Most businesses are of this type. The second form, the partnership,

may have from 2 to 50 or more members, as in the case of large law and accounting

firms.

The various forms of organization are established by state law. There are a wide variety

of business organizations recognized by the states. For example, a popular form of

organization is the Limited Liability Company. The LLC is a state designation. At the

federal level, an LLC is taxed as a partnership. If the LLC so chooses, it can be taxed as

a corporation at the federal level. While there are a variety of designations at the state

level, for federal tax purposes there are only 6 forms of business organizations.

Sole Proprietor (1040 Schedule C),

Corporation (1120),

Partnership (1065),

S-Corporation (1120S),

Trust (1041), and

Non-profit organization (990)

Sole proprietors are unincorporated businesses. They are also called independent

contractors, consultants, or freelancers. There are no forms you need to fill out to start

this type of business. The only thing you need to do is report your business income and

expenses on your Form 1040 Schedule C. This is the easiest form of business to set

up, and the easiest to dissolve.



Corporations are incorporated businesses. Every form of business besides the sole

proprietor is considered a separate entity, and this often provides a measure of legal

and financial protection for the shareholders. The shareholders of corporations have

limited liability protection, and corporations have full discretion over the amount of

profits they can distribute or retain. Corporations are presumed to be for-profit entities,

and as such they can have an unlimited number of years with losses. Corporations must

have at least one shareholder.

Partnerships are unincorporated businesses. Like corporations, partnerships are

separate entities from the shareholders. Unlike corporations, partnerships must have at

least one General Partner who assumes unlimited liability for the business. Partnerships

must have at least two shareholders. Partnerships distribute all profits and losses to

their shareholders without regard for any profits retained by the business for cash flow

purposes. (LLCs are taxed as partnerships, unless they choose to be taxed as

corporations.)



S-Corporations have features similar to a partnership. An S-corporation must have at

least one shareholder, and cannot have more than 100 shareholders. If any shareholder

provides services to the business, the S-Corp must pay that shareholder a reasonable

salary. This salary is a separate payment from distributions of profits or losses.

Trusts are usually formed upon the death of an individual and are designed to provide

continuity of the investments and business activities of the deceased individual. We will

not discuss trusts further.

Nonprofits are corporations formed for a charitable, civic, or artistic purpose. Nonprofits

are generally exempt from federal and state taxation on their income, and so they are

often called "exempt organizations." Nonprofits have substantial responsibilities for

reporting their activities, income, and assets to ensure that they are in compliance with

federal and state laws governing charities. For additional information on starting,



managing, and developing a not-for-profit organization, see the About.com Guide to

Nonprofits.

As mentioned above, sole proprietors, S-corporations, and partnerships are taxed at the

shareholder level. Corporations, however, are taxed at the corporate level.

BENEFITS:-

It can ensure that the whole organization is using a common system - no

incompatibility issues.

Data files and staff can transfer between departments.

It ensures that systems are developed by experts who will produce efficient

systems with proper documentation.

It allows the control of data and reduces the threat to data security.

Needs of end-users can be met without waiting for time or funds to become

available?

The organization can unleash the creativity/talent of its workforce.

End-users will get the system they want if they develop it themselves.

CHALLENGES IN IMPLEMENTATION:-

The challenges which are faced by the implementers during the implementation are as

follow.


http://nonprofit.about.com/

http://nonprofit.about.com/


An information systems strategy brings together the business aims of the

company, an understanding of the information needed to support those aims,

and the implementation of computer systems to provide that information. It is a

plan for the development of systems towards some future vision of the role of

information systems in the organization. The strategy should be formally

documented, should be initiated by the Board, monitored by planned reviews,

and should base information provision on key indicators, critical success factors,

or on a detailed analysis of management information needs. As a large diverse

corporation, IS strategy has tended to be dealt with at major grouping levels . . .

Acquisitions have . . . carried on, or developed, independent strategies. A major

review is currently in progress to determine the degree to which a corporate

strategy is required



CONCLUSION

We have derived a conclusion on the basis of these points, information system is

designed to automate and integrate all the business operations, such as sales, finance,

purchase, inventory and manufacturing. With Computerized accounting, accurate, up-

to-date business information is literally at the fingertips. Multi-lingual and Data

organization capabilities help the company to simplify all the business processes easily

and cost-effectively.

Information system has User-definable templates which provides fast, accurate data

entry of the transactions; thereafter all documents and reports can be generated

automatically, at the press of a button.

It has the ability to handle huge volumes of transactions without compromising on speed

or efficiency. It is a highly integrated application that transforms the business processes

with its performance enhancing features which encompass accounting, inventory,

reporting and statutory processes. This helps the company access information faster,

and takes quicker decisions. It also guarantees real-time optimization of operations and

enhanced communication. Generates real-time, comprehensive MIS reports and

ensures access to complete and critical information, instantly.

Despite the positives associated with the role of MIS in decision making process, there

are a few challenges that are believed to limit the efficacy of MIS. These include:

The dynamic nature of MIS makes it difficult for some organizations to keep up

with the principles, strategies, propositions or even ideas.

Different situations call for different decisions to be made. This poses challenges

to MIS theorists since some MIS tend to not be adaptable

The institutionalization, programming, monitoring and evaluating MIS requires a

lot of expertise—something which numerous organizations lack.

The running of MIS programs tends to be relatively costly for some organization

— especially small ones who are not well-endowed financially.



MIS is more of a science-oriented field while business is art-oriented.

Consequently, finding a middle ground where the two can be linked is quite

challenging to some people.

Most organizations do not a well-defined decision making system. So even with

the right MIS tools, very little can be achieved in terms of improving decision-

making. Based on these limitations—plus other underlying issues that arise from

the main discussion, the following recommendations are suggested.

There should be an increased monitoring of MIS so as to avoid falling victims of

unobserved MIS which has dire ramifications.

Managers and business owners should find a way of tailoring information in a

way that it fits various decision making processes in variant businesses.

The management should encourage the effectuation of a mutually

interdependent and balanced MIS where workers and automated systems are

handled with due respect.

Business entities should find a way inculcating teachings about new MIS in order

to reduce the trend of businesses being left behind on new inceptions.

A well-defined decision making system should be fledged in businesses so as to

provide a viable working environment for MIS. A good place to start here would

be the inception of a centralized place where all decisions in businesses are

channeled through.

Business managers must ensure that they employ (or alternatively outsource)

professional personnel who are able to ardently run both MIS and the decision

making process.

Can this information be considered adequate for evaluating internal control of MIS

activities? This question presumes that there are no additional significant internal

auditing procedures, accounting controls, administrative controls, or other

circumstances that impair any controls or mitigate any weaknesses noted above.



DISCUSSION

Management information systems give managers quick access to information. This can

include interaction with other decision support systems, information inquiries, cross-

referencing of external information and potential data mining techniques. These

systems can also compare strategic goals with practical decisions, giving managers a

sense of how their decisions fit organizational strategy.

As a cautionary point, organizations should not entirely rely on automated systems--

especially when the decisions to be made have adverse implications to the

organization. This is based on the alleged observation that auto systems may

sometimes be faulty and thus require frequent periodic monitoring (Demetrius, 1996).

So in order not to fall a victim of over-relying on automated systems, Jahangir (2005)

advices managers and company owners to ensure that they find a balance in utilizing

the human element in operating while assigning some duties to the automate system.

Again, MIS is renowned for vesting its operations on systematic methods of operations.

Crucially, this ensures that decisions made in a business are orderly and well-planned

which, in effect, encourages objectivity during decision making. As a result, businesses

and the decision making process are improved through its systematic and orderly

formula of operating.

Managers in all levels of organization hierarchy need precise and suitable data and

information to make decisions that increase organizational performance. Such concept

suggests an informational need of supervisory level is different from top level. At the

same time the type of information also at each level is different. At lower level,

supervisors need defined, clear, precise, quantifiable and internal organizational

information but at the top level a manager needs undefined, future oriented, infrequent,

summarized, relatively, non quantifiable and mostly external information. Such concept

is illustrated in Figure 9. Quantifiable information could be gathered from external



environment if suitable. Management Information Systems are placed in organizational

information system such as CSCWS, GDSS and ESS.

In general, different kinds of data and information are suitable for decision-making in

different levels of organizational hierarchy and require different information system to be

placed. Such system could have explicit effect on each step of decision process in

solving problems. At the same time each information system cannot fulfill complete

information needs of each level, but rather different information systems if integrated in

different levels could satisfy information needs of a level and at the same time fulfill part

of information needs of other levels. For example TPS fulfills the lower level needs of an

organization but MIS furnishes data and information for lower and middle level

management needs on the other hand, DSS furnishes information for middle level and

higher level of organizational hierarchy and ES fulfills only higher level managerial

needs.

The perceived concepts, which are based on the role of MIS and DSS in the decision

making process, especially with emphasize on MIS and DSS which provide information

services for middle and higher level managers in the process of decision making are

integrated.

FUTURE ENHANCEMENT:-

Supporting steps:

Open communication channels with customers

Engage in joint strategy and planning sessions with operational groups

Move to a client-based consultative relationship

Listen to customers and be open to change

Educate customers on technology in terminology they will understand

Join project teams - be an active member of reengineering projects

Recruit IT resources with customer service skills



Decentralize IT - move resources out to operational departments or rotate IT

resources into operational positions

Measure customer service performance

help define business processes

research new technologies

help brainstorm and design new solutions

be a motivator and change agent

partner in the management of the reengineering process



QUESTIONNAIRE

The following questionnaire is provided as a tool to assist examiners in the assessment,

review, and documentation of the quality of the bank's MIS related internal controls,

policies, practices, and procedures. However, because the nature and scope of MIS

among banks, not all of the questions will be relevant in every bank. Similarly, a

negative answer to a particular question does not necessarily indicate a weakness in

the bank's MIS or surrounding internal controls if other equally effective or alternate

controls are in place or there are other circumstances that mitigate the risk. Where

appropriate, documentation may include narrative descriptions, flowcharts, copies of

forms used, and substantiation through observation or testing.

Has management developed and maintained a current MIS policy or practice?

Does the policy or practice provide guidance in the following areas?

The definition, purpose, and fundamental components of MIS?

How to achieve effective two-way communication between management and

employees and specific avenues to maintain such communication?

Processes for initiating, developing, and completing MIS enhancements?

Guidelines for installing MIS enhancements in a controlled change environment?

Procedures for acquiring, merging, manipulating, and up-loading data to other

systems?

Guidance for delineating the need for internal/external audit coverage and

testing?

Is the policy or practice reviewed and updated regularly?

Is the policy or practice distributed to appropriate employees?

Does the policy or practice incorporate or require:

User approval for each phase?

Installation of MIS enhancements in a controlled change environment?

Employees to follow policy or practice and processes as data is acquired,

merged, manipulated, and up-loaded to other systems?



Employees to be sufficiently trained for new systems and subsequent

enhancements?

Analysis of the concept, organization of tasks, completions of phases, and

approvals?

Development of the program and contracting for equipment and software?

Development of user manuals and testing of the system?

Post-review of the system and future maintenance of it?

To effectively link executives, other appropriate users, and information systems

employees?

To ensure effective two-way communication between management and

employees?

To document the MIS process?



ACKNOWLEDGMENT

First of all, I would like to say Alhamdulillah, for giving me the strength and health to do

this project work until it done Not forgotten to my family for providing everything, such as

money, to buy anything that are related to this project work and their advise, which is

the most needed for this project. Internet, books, computers and all that as my source to

complete this project. They also supported me and encouraged me to complete this

task so that I will not procrastinate in doing it.

Last but not least, my friends who were doing this project with me and sharing our

ideas. They were helpful that when we combined and discussed together, we had this

task done.



REFERENCE

http://www.pepsico.com

http://pepsi.software.informer.com/

http://www.docstoc.com/docs/67978982/MANAGEMENT-INFORMATION-

SYSTEM-IN-PEPSI-CO

http://wiki.answers.com/

http://partners.nytimes.com/library/tech/00/04cyber/commerce/03commerce.html


http://partners.nytimes.com/library/tech/00/04cyber/commerce/03commerce.html

http://wiki.answers.com/

http://www.docstoc.com/docs/67978982/MANAGEMENT-INFORMATION-SYSTEM-IN-PEPSI-CO

http://www.docstoc.com/docs/67978982/MANAGEMENT-INFORMATION-SYSTEM-IN-PEPSI-CO

http://pepsi.software.informer.com/

http://www.pepsico.com/

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