Designing Management Information Systems

Designing a MIS using the Merise Method

Merise is a systemic design method, which has a matrix structure:
Views

Levels

Communication
CCM

Conceptual

Data CDM

Process
CPM

Conceptual Communication Model

LCM

Conceptual Data Model

LDM

Conceptual Processing Model

LPM

Logical or Organisational Physical or Operational

Logical Communication Model Physical Communication Model

PCM

Logical Data Model Physical Data Model

PDM

Logical Processing Model Physical Processing Model

PPM

Level Conceptual Logical or Organisational Physical or Operational

Concern What do you want to do Who does what, where, when, how By what means

Obiectives of MIS
The objectives of MIS are immediate and long-term goals to improve activity of the company, to improve leadership activities to raise the level of information timely for organizational structures, to improve methods and technical processes and management information for ensure maximum efficiency of the beneficiary company. System objectives require solving problems with synthetic character in a systematic manner using IT support. These objectives have general and specific characteristics that depend on the legal and regulatory framework, endowment with computers and economic development requirements of the company These objectives can be grouped into the following categories: - management objectives, aimed to restoring permanent economic assets, development of management activities to ensure a global optimum of all activities, fundamnnting the management decisions, strategic, tactic and operational decision based on information obtained as a result of processing system, relieving routine management's decision-making

Designing Management Information Systems

processes; - functional objectives, fundamentally dependent on the specific company activity. Exemple: MIS objective for banking activity:

opening bank accounts; opening and update bank deposits; Payment and Settlement in RON or foreign currency; granting and reimbursement of bank loans; closing a banking day.

Inputs and outputs of MIS For each type of business and management or operational objective are identified outputs and inputs of MIS. For this purpose we take into account various criteria: - the specificity of the company; - the information requirements of the management of the institution or of the functional departments; - managerial and functional objectives of MIS; - the legislation, rules and regulations issued by the Ministry of Finance; - the demand for measuring amplitude and dynamics of financial and monetary phenomena. Inputs and outputs of a standard MIS are established and according to the specifications of CCM were used to determine the types of entities, relationships and attributes of CDM. Inputs are reflected in MIS through the documents, while outputs are presented in the MIS output reports.

Conceptual designing
Conceptual Communication Model (CCM) CCM provides a graphical representation of the process under computerization. An incomplete or erroneous image/operation will result in errors in function of the the final product. CCM must meet certain rules: - meet standards and legislative requirements; - comply with company regulations and procedures (internal regulations, job descriptions); - detail the whole process, from the onset until the last specific elements CCM uses actors and information flows. Actors can be internal or external actors actors (belong to the internal or external structure of MIS). In the frame of economic activity, internal actors are identified with the institution or department (eg. credit inspector, account officer, director, accountant).

Designing Management Information Systems

External actors may be corresponding monetary-financial institutions, banks, NBR, insurance companies, private customers or companies. Sometimes, due to the developing business activity, it is possible that an external actor to become internal actor. Exemple: The brokerage companies had the role of customer (external actors) at a certain time, which enters in relationship with the bank in settlement process. With the development of brokerage exchanges, the company is assimilated/absorbed by the bank, become entity within the financial group and will be treated as internal actor. In this case, it is necessary to adapt the flow of documents of the brokerage company/department to the flow of bank documents. Players change information as information flows. The flow diagrams are graphical representations that reflect the links between actors. Typically, these flows are translated into input-output system documents, or to/from subsystems. Documents can be standardized or non-standardized. In terms of use of different messages between actors is better to associate its formal documents. Such documents may be accounting notes, internal memos or notices. The importance of these documents is that it can reveal the stage reached in the development process and, in the same time, it can be determined the responsibilities especially when malfunction occurs. The information flows are represented in the form of arcs directed from issued actor to destination actor. The arc using a numeric notation, which correspond to the sequence encoding processes and documents, as objects of the information flow. Making CCM can be considered as an iterative process if the analyzed economic phenomenon is complex. Thus, CCM developed in the first phase globally can drill several core activities of CCM for financial and banking unit. CCM creates fully premises to realize a correct conceptual processing model (CPM). Example: CCM for credits/loans. Detailing of financial flows is as follows:

Designing Management Information Systems

1 agreement client-bank guarantor /endorser for endorsement loan agreement 2 loan demand 3 loan file documents 4 loan analysis report 9 contract signed 10 withdrawal document + cash 11 withdrawal document signed 12 payment document + cash

5 file for approval 6 analysis + final decision 7 loan file returned to credit officer 8 opening an account and credit the account 13 payment document + signature 14 payment document + cash 15 payment document + signature

Giranti

2 3

Servicii credite

14
6

15
6

Client
13 12 10 11

Casa

Comitet de acordare a creditelor

If the financial and monetary system is highly complex, but are relatively independent functional modules, these modules can be treated separately at the conceptual level and connect modules within a single application finally. 1.1.1 Conceptual Data Model (CDM) CDM sets out the conceptual entity types, their attributes and associations required for MIS, no matter of storage data devices and the data access mode.

Methods of determination for CDM:

a) The input-output method

This method ensure the inclusion of the properties/attributes in the CCM depending on objectives of MIS taken from the input system/documents, independent of the system outputs. After the analyzing of the information content of the input document it will set the attributes of the new system.

Designing Management Information Systems

This method is bet to best used for open systems. It enables further processing and determining a set of parameters that are not sufficiently analyzed in the early stages of MIS analysis. But we must not exaggerate the creation of sets of input variables that will not be processed and will take up the system resources.

b) The output-input method

The method starts from MIS outputs (indicators, reports) in relation to the objectives of the system and follows to determine the set of attributes. This set will contain attributes based on algorithms and elementary/uncalculated attributes. This method is used if we have limited resources in terms of collection, storage and data processing. This fact will cause a minimum but sufficient number of input variables which will ensure, through processing , the output parameter determination. Such a MIS is easier developed in steps further, due adequacy of input variables.

c) The mixed method

The method will determine the set of attributes used for both incoming and output of the system based on input documents, output of the new system (indicators, reports and outputs to other systems) correlated with the objectives of the MIS. This set will contain elementary attributes, calculated attributes and mathematical operands. Thus, these attributes will be included in the type of entities and properties. This method ensure the optimum among the set of input variables that need to be processed in order to achieve output variables and situations. MIS can be developed into a simple way, the unused input variables providing good information support. The conceptual data modeling includes the following steps: a) Determination of the basis of attributes; b) Establishing conceptual entities in the CDM; c) Determination the associations between conceptual entities in CDM; d) Establish cardinality for associations. a) Determination of the basis of attributes Study the information structure of specific inputs and outpus of MIS, in terms of semantics, type, maximum length, the methods of calculation. It will be present the calculation algorithm and primary operands needed for each type of attribute. It will be determined the attributes of entities based on primary documents from which information flows were found in CCM. The attributes will be encoded respecting following requirements: - unique codes - establishing a unique symbol for each attribute of the information database; - stability codes - use a single type of code to describe an attribute on the lifetime of the system; - usability codes - codes must be easily understood and applied;

Designing Management Information Systems

- brevity codes - is given by using an adequate number of characters (minimum but enough). b) Establishing the conceptual entities in CDM The attributes defined for database attributes (the attributes dictionary) are grouped into conceptual entities complying with normalization. Grouping is done taking into account different criteria: - grouping attributes can be done based on documents (payment or withdrawal, credit contracts); - grouping attributes can be done based on their significance, for example, based on classifications (types of deposits that can be opened, types of loans that can be granted). The attributes used by MIS are of two types: taken or compound. The taken attributes are in the same form as they are in the primary documents. The compound attributes comply the calculation algorithms and do not occur in conceptual entities. The algorithms will be detailed up to the level of primary operands. The attributes that occur in the conceptual entities must comply with the following rules: - the attributes will have a unique name to describe the properties while running the application; - the taken attributes occur in conceptual entities only; - the attributes are elementary; the compound attributes are decomposes up to elementary attribute level; - the same attribute can not occur in two different conceptual entities; - the list of attributes must be non-redundant and without synonymous or homonymous attributes. It can be set certain restrictions to the atributes reffered to their evolution, the field values that can be taken (range or list). These conditions of validation can be classified as simple, compound, static and dynamic, local or global, depending on variables (static/dynamic). The simple conditions are determined by the nature of attribute, range/list of values etc. Exemple: ID_cli<> ; No_doc>0; date_doc>={01.01.2013}; type_currency ={RON, USD, EUR,YEN} The compound conditions are determined by using operators (mathematical, logical, relational) and are dependent on the semantic attribute nature, range/list of values etc.

Designing Management Information Systems

Exemple : mathematical operators: +, -, *, /, ( ) logical operators: AND, OR, NOT, ( ), etc. relational operators: =, <, >, <=, >=, #, $, = = condition of validation for a primary document: (no_doc>0 AND no_doc<99999) AND (date_doc NOT empty() and date_doc>{01.01.2013} ) For the credit activity, we take into account the following compound attributes.
Attribute rulaj lunar debitor rulaj lunar creditor sold zilnic final debitor sold zilnic final creditor rata lunar dobnda lunar rata total suma platit suma rmas de rambursat rulaj zilnic debitor rulaj zilnic creditor rulld(c) = rullc(c) =
31

Formula
soldzd(c, z)
z 1 31

soldzc(c, z)
z 1

soldz_fd(c) = soldzd(c) + rulzd(c) soldz_fc(c) = soldzc(c) + rulzc(c) rata_l(c) = round(valimp/nrrate) dob_l(c) = suma_ram(c) * proc_dob /100/12 rata_t(c) = rata_l(c) + dob_l(c) suma_pl(c) = suma_pl(c + rata_l(c) suma_ram(c) = suma_ram(c) - rata_l(c) rulzd(c) = rulzd(c) + suma(c) rulzc(c) = rulzc(c) + suma(c)

It use the following notation in the table:

Notation C Z soldzd soldzc valimp nrrate suma_ram proc_dob suma Meaning Holder's account number Day of banking operation Debit daily balance Credit daily balance Value of the loan/credit Number of rate Ammount remaining to be reimbursed Interest rate Daily ammount

Some attributes within entities will act as an identifier.

Designing Management Information Systems

The entity identifier is that attribute which uniquely identifies a record (member of its population). The identifier can be a single attribute or can be determined by several attributes (multiple identifier). Graphically, the identifier is undelined in the entity. Rules for settings identifiers: - identifier must be nonempty; - identifier must consist of a minimum number of attributes; - if you can choose different identifiers for the same entity, but different, you will prefer those which have a minimum number of attributes and are easier to handle. Example: In the entity Clients, the identifier may be the attribute CNP or a multiple identifier ID_series and ID_number. Take into account that CNP occurs on all customer identification documents (identity card or passport) is indicated for use as an identifier of the entity Client. c) Determination the associations between conceptual entities in CDM We can determine associations between conceptual entities based on functional dependencies between attributes from information database. Associations are relationships that are established between conceptual entities. An association does not have an independent existence. An association exist only if the achievements of entities linked exist. The associations can have their own attributes. The cardinality express the participation of the achievements of the entities to the associations. Cardinality is minimal (0,1; 1,1) or maximal (0, n; 1, n). The associations of type m n are resolved through two joint 1,n and 1,m (1,n). The collection of an association is given by the participating entities. The dimension of the association is given by the number of participating entities. A special case is generated by reflexive associations. These associations are associations that occur between different achievements of the same entity. In this case, you would specify the roles they play in the association, the roles that show the entity's participation in association. In the banking system such associations are uncommon. Exemple:

Designing Management Information Systems

Client girant Client CNP Nume Pren Adresa ..

0,n

gireaza Client girat 0,n

A client can be guarantor/endorser for another client of the bank. In this case, the roles are "guarantor client" and "client which is guaranted/endorsed". The integrity constraints are rules that must be followed by the elements (attributes, associations, entities) and their inclusion in the early stages of design leads to a faster troubleshooting errors that occur in running applications. The integrity constraints are: - structural integrity constraints; - entity constraints; - referential constraints; - integrity of roles constraints; - integrity of association constraints; - semantic integrity constraints. Structural integrity constraints imposed conditions relate to the concepts used in modeling. Integrity entity constraints employs a unique identifier for each nonempty entity. Exemple: For entity Contract{No_contr, Date_contr, Value_contr, IR_contr, Per_contr}, the identifier of the entity is No_contr and cannot take empty values. The entity has registered loans only. Referential constraints implies the existence of association that is determined only by the existence of the achievements participating entities in the association. Example:

Designing Management Information Systems

Clients CNP Name ..

1,n
Sign

1,1

Contracts No_contr Date_contr ..

Th association Sign exists if there is an achievement of the entity Client and an achievement of the correspondent entity Contract only. Integrity of roles constraints refer to the roles played by an entity in various associations and have three forms: inclusion, equality and exclusion of roles. Semantic integrity constraints are management rules enforce to attributes. It occur as static or dynamic constraints. The static constraints concern attributes, regardless of their evolution in time. Example: For entity Contract, we can set the static constraints.
Contracts No_contr Date_contr Value_contr IR_contr Per_contr Static constraints: No_contr > 0 Date_contr > 01.01.2013 Suma_contr > 100.000 (lei) IR_contr > 0 Per_contr < 60 (months)

The dynamic constraints take into account the evolution in time of data. Exemple: For entity Contract, we can set the dynamic constraints. Dob_contr attribute is updated periodically by the bank, depending on the prevailing market interest rate finance and banking. For credit agreements already concluded, the interest rate is updated according to the following rule: if market interest rates rise, the interest rate for the loan agreement shall be increased accordingly, if market interest rates fall, the interest rate remains constant related to the credit agreement.

Designing Management Information Systems

CDM description is made using a table (example for loan activity)

Descrierea tipurilor de entiti Tipul de Tipul de proprietate entitate Natura, lungimea Identificator Clienti CNP_cl, N,13 Nume_cl, T,20 Prenume_cl, T,20 Judet_cl, T,10 Localitate_cl, T, 10 Adr_loc,_cl, T, 10 Numar_contr, N, 6 Data_contr, D, 8 Suma_contr, N, 9 Dob_contr, N, 3 Per_contr, N, 3 Tip_doc, T, 10 Numar_doc, N, 6 Data_doc, D, 8 Suma_doc, N, 9 Explicatii_doc, T, 10 CNP_cl, N,13 CNP_g, N,13 CNP_g, N,13 Nume_g, T,20 Prenume_g, T,20 Judet_g, T,10 Localitate_gl, T, 10 Adr_loc_g, T, 10 Descrierea tipurilor de relaii CardiColecie Tip relaie Identificator nalitate incheie efectueaza 1,n 1,1 1,n 1,1 CLIENTI CONTRACTE CLIENTI INCAS_PLATI

Contracte

incheie gireaza genereaza efectueaza genereaza platesc

Incas_plati

1,1 1,n 1,n 1,n 1,n 1,1 1,1 1,n 1,1 1,n 1,1 0,n

CONTRACTE CLIENTI CONTRACTE GIRANTI CONTRACTE INCAS_PLATI INCAS_PLATI CLIENTI INCAS_PLATI CONTRACTE INCAS_PLATI GIRANTI GIRANTI CONTRACTE GIRANTI CONTRACTE

Giranti

gireaza platesc

1,n 1,n 0,n 1,1

Designing Management Information Systems

Based on these elements is proposed CDM simplified for loans.