What Is Management Information System Information Technology Essay

Management information system, the name itself suggests that the companys data or important records are preserved in an electronic form. An information system can be defined technically as a set of unified components that collect, process, store and distribute information to support decision making, co-ordination and control in an organization. The functions benefit the managers to support decision-making, coordination and controlled information systems. Also the employees get an advantage to analyse problems, visualize complex subjects and create new products with new innovative techniques. The information systems have a great influence on the managers in any particular organization as decisions are impossible without information and managers are constantly seeking more and better information to support their decision- making.

Any particular Information systems have a feature to contain information about particular people, places and things within the organization or in the environment surroundings it. By information we mean different data, are base of raw facts representing events occurring in organization or the physical environment before they have been organized and arranged into a form that people can understand and use. Any organization needs to inculcate the basic three activities of an information system. And initially the company or any organization needs to generate the information that organizations need to make decisions, control operations, analyse problems and create new products or services. These activities are input, processing and output. Input deals with collection of raw data from within the organization or from its external environment. Processing converts this raw input into a more substantial form. Finally output transfers the processed information to the respective people who will use this data. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage.

(K.Laudon & J Laudon, management information systems, Fifth Edition, Chapter , page no

Information systems are costly to purchase, install, and maintain. Therefore, in a world where business enterprise is operated for value maximization, it is natural to suppose that Management Information System offers economic value and that this value overcomes the costs. As such it has rightly been an objective of Management Information System research for at least two decades to determine the economic role of Management Information System.

Management Information System improves the firm’s competitiveness and makes them flexible, more responsible and more profitable through decreasing the cost and creating possibilities for accessing new markets and customers.

1.2 A Business Perspective on Information Systems:

An information system is an organizational and management solution, based on

information technology, in terms of any business perspective, to face the obstruction and hindrance generated by the environment. To fully understand information systems, a manager must understand its own organization and management in broader aspect and information technology dimensions of the systems and their power to provide solutions to bridge the gap between the organizations and meet the incompetence of the organization in a better way.

Information systems are an integral part of organizations. Indeed for some companies such as AIRLINES INDUSTRIES, without the information systems there would be no business. The key element of an organization is its people, structure, operating procedures, politics and culture. The above-mentioned industry can be broadly defined in form of BRITISH AIRWAYS. British airways are one of the world’s fastest airline service providers. We would deal in more details how British Airways maintain high level of Information Systems.

4.0 Information Systems at British Airways

Efficient Management of Information System has enabled British Airways to plan co- ordinate, organize and control. It provides information needed for strategic planning and for day-to-day operations. The various levels of management in British Airways typically require the information they receive to be formatted in information system processes. Information flows in four different ways in British Airways and much other organization. These different levels of management decision-making can be described as follows: Strategic Information System, Tactical Information System and Operational Information System.

4.1 Strategic Information System:

This type of information systems is largely external in terms. These information systems are basically dealt with the top authoritative people in the organization of British Airways to decide on mergers and acquisitions, new purchases of Boeing, capital investments and financial structuring. Large area of information required for this type of information systems is from the Market and economic forecast, political and social trends, legislative, environmental and technological constrains and opportunities.

4.2 Tactical Information System:

These types of information systems are largely internal and external sources, with concern on the current and future performance. The main decision example for British Airways in maintaining this type of information system is pricing, capacity planning, budget preparation, purchasing contracts etc. to maintain the information systems some of the information is required like for instance cost and sales analyses, performance measures, summaries of operations, production, budget I actual comparisons etc.

4.3 Operational Information System:

This type of information systems is largely internal, mainly historical, detailed information on a daily or weekly basis, often quantitative, high precision and narrow in scope. The main aspect of why British Airways database is so efficiently controlled is due of the appropriate functioning at Operations level. The operational level information system of British airways mainly deals with production scheduling and disseminating flights timings and destinations, maintenance of customer data base, re-ordering, booking acceptance by all means of payments, credit approval etc.

(W.Robson, Strategic Management &Information systems, Second Edition, Chapter3, page no 81- page 8

5.1 Strategic Level of Information System:

5.1.1 Current structure of BRITISH AIRWAYS:

British airways today have one of the largest operations than any other airlines in the world. British airways have taken over all the other small business in the past. Last year, more than 44 million people chose to fly on the 499,000 flights that it operated. That’s the equivalent of 80 passengers checking in every minute around the clock. The airline also carried more than 907,000 tonnes of freight and mail last year (up 1.1 per cent on the previous year) ‘ equivalent to one tonne loaded every 35 seconds. Today British Airways Group fleet comprises of 348 aircraft – one of the largest fleets in Europe. The airline takes great pride in delivering the highest levels of innovative customer service. This year it unveiled ‘600 million worth of new customer services and products, to be introduced during the subsequent two years. This is the biggest investment of its kind in airline history. Today the main structure the British airways are following is the three ‘C’

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Customers: With this strategy BA is focusing on total customer satisfaction from every perspective of a traveler. This strategy can help BA to improve its goodwill position in the market regarding safety, comfort and improved service quality.

Company: The above strategy requires heavy investment in R&D, product modification and advertising expenditure. This would help the company in attaining product leadership and however, result in a downturn in the short run but will eventually be profitable in the long run with increasing Rate Of Interest (ROI) as more and more customer would take the benefit of these services and could increase the potential market share.

Competitors: Very few companies will be able to match the R&D structure of this adopted strategy. BA will have to ensure patents for these innovations to their services making it harder for competitors to imitate similar services.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter 1,

page no 14, October 2002)


5.1.2 British airways merger with other airlines:

Today British airways has tie ups with big airline which include American Airlines, Aer Lingus, Cathay Pacific, Finnair, Iberia, LanChile and Qantas. They introduced their joint services and benefits, under the banner ‘one world revolves around you’, with the aim of making travel to more places around the world easier and better value. One world serves more countries than any of its competitors and was voted the world’s best airline alliance in the first awards recognizing this sector of the industry. Besides one world, British Airways has one-on-one relationships with a number of airlines. It owns a 17 per cent stake in Qantas and 9 per cent in Iberia. It counts among its subsidiaries German airline Deutsche BA, and UK regional airline British Airways CitiExpress, both of which operate in British Airways’ colors under franchise arrangements. Other members of British Airways’ franchise family include British Mediterranean Airways, Comair, GB Airways, Loganair, Maersk Air, and Sun Air. These franchise airlines operate to over 100 destinations, most of which are not served by British Airways itself. These ‘alliance’ arrangements enable British Airways to offer passengers smoother travel to more places, with any one airline unable to fly every single route worldwide for financial and regulatory reasons. Through one world and its other alliances, British Airways can offer passengers seamless flights to some 600 destinations in more than 130 countries worldwide.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter 12,

page no 355, October 2002)

5.1.3 Financial aspects of British Airways:

British airways apply its planning objectives and facilities guidelines when planning new

developments to assist its managers in assessing the appropriate capacity and size of future facilities. These planning objectives are described in form of financial modelling and financial planning.


British airways key issues, which underlay its investment decisions, are:

(a) An accurate assessment of forecast demand/opportunity including key


(b) The options considered, including those which might not require any, or required

little, capex, ie ‘do nothing’ or ‘do minimum’;

(c) A proposed solution that is most appropriate to meet the business need and which maximizes shareholder value (or alternatively minimizes loss of shareholder value in the case, for example, of asset replacements);

(d) The appropriate balance between cost (capital and future operating costs), time (delivery programme) and quality of facility to be provided with the resulting impact on customer service, with supporting benchmarks against previous

comparable projects where possible;

(British Airways plc. A report on the economic regulation of the London airports companies, chapter ,

page no 96, October 2002)

5.1.4 Capital Investment and Capital Planning:

Some of the British airways future investment strategies are.

The most important strategy of British airways that aims to (a) maximize utilization of existing runway capacity, whilst ensuring high levels of safety and security and delivering a high level of service quality.

(b) The implementation of early works to provide for the advanced release of stands

prior to the opening of Terminal 5, in order to meet short-term demand.

(c) The completion of works to the airfield Western Apron and piers to allow for the

introduction of the A380 aircraft from spring 2006;

(d) The progressive build-out of Gatwick to ensure its passenger-handling capacity meets the full capacity of the existing runway. This is primarily focused on the expansion of the North Terminal, aprons and airside (the timing and specification of this part of the strategy is dependent on the mix of traffic that in turn depends on the resolution of ‘open skies’, the BA strategy, and the actions taken by other Gatwick airlines.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter ,

page no 284, October 2002)

5.2 Tactical Level of Information System:

5.2.1 Services provided by British Airways:

Over decades British airways has brought many changes in quality of the service they provide. They are successfully trying to bridge the gap between its customers and the organization. It has served its customer with sheer dedication and devotion. The main reason why British airways are successful in retaining its customer is by providing pioneering and innovative services to its customers and its crewmembers.

This time British Airways again came up with one more innovation in providing a better service to its crewmembers. The name of the service is BASIS (British Airways Safety Information system). Whilst the safety data gathering programmes include those pertaining to Ramp and Cargo Handling. SESMA (Special Event Search and Master Analysis) is a Flight Data Recording (FDR) programme that monitors the safety health of the fleets’ operations while guaranteeing crewmembers complete anonymity. The FDR for each flight is examined for ‘events’ where safe flight envelope parameters have been exceeded. All events are stored in a BASIS database and the more serious are discussed at a monthly meeting of technical managers and British Airline Pilots Association (BALPA) representatives. Despite the misgivings of flight crew and management at its introduction, this programme has proven to be a highly valuable safety tool. It has been a rewarding collaboration between flight crew, pilots’ association and flight management in a safety programme.

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The primary benefits of the SESMA programme are that the data can inform Flight Operations exactly how the aircraft are being operated. Thus it gives excellent feedback on training initiatives and on conformity with Standard Operating Procedures. Apart from this some other external services provided by British airways are Baggage facilities, sufficient parking space, shopping mall inside the airports, easy other flights connection etc.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter ,

page no 197, October 2002) (www.winbasis.com#download#$%&’20manual.pdf)

5.2.2 Pricing Policies:

I) Structure of charges internally.

Airport charges are currently structured into:

(a) Landing charges, with a distinction (except for large aircraft at Stansted) between off- peak and peak charges. Landing charges are generally flat rate, but with a small degree of differentiation between weight bands, mainly in off-peak periods. There is also some differentiation according to noise classification of aircraft.

(b) Charges on terminal departing passengers, those for international passengers being

above those for domestic passengers.

(c) Aircraft parking charges, based on maximum authorized weight of the aircraft. At Heathrow and Gatwick, a higher rate is applied in peak periods. At Heathrow and Gatwick parking charges accrue immediately after landing subject to a taxi time allowance of eight minutes.

BA currently pays a rebate of ‘3 per departing passengers to airlines, which have to coach their passengers to remote stands. From 2001/02, this has been applied separately at the rate of ‘1.50 per arriving or departing passenger on remote stands.

Payments of the rebate are offset against airport charges’hence other charges can be increased to compensate, and it has a neutral effect on British airways revenue and profits.

II) Structure of charges externally:

According to the information system of British airways the quoted yields are net of the

discounts, which amounted to ‘2 million. Apart from that, other forms of incentive are also offered to assist carriers to develop the majority of new routes at the airport. These are treated as marketing expenditure and in 2001 amounted to approximately ‘15.5 million. This is accounted for as a cost rather than a revenue offset and hence does not reduce revenue yield.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter ,

page no 185, October 2002)

5.2.3 Implementation of quick response technique to technical problems:

This is a new technology developed by British airways to respond to its customer’s complaints as soon as possible. BA records data on the ‘availability’ of critical equipment, such as stands, jetties, escalators, passenger conveyors, lifts and baggage conveyors. Availability is defined in terms of the proportion of time, for which the equipment is ready for use, rather than the proportion of occasions that it is available when an airline requires, this is referred as ‘serviceability’ to avoid confusion with the availability of the equipment to a particular flight when needed. These measures, which are used in the existing new service profile, either use measures of downtime produced automatically by ‘Maximo’ fault-reporting system or involve manual examination of records. Performance is calculated separately for each terminal and statistics are circulated. This Maximo technology helps the operational activations, such as emergency stops; engineering faults; basic maintenance; and extra maintenance.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter #,

page no 511, October 2002)


Also there is a new technology designed for safety purpose called as The Air Safety Reporting Programme British Airways run air and ground safety reporting programmes, which require all staff to report safety, related events. The British Airways ASR programme is highly successful. The ASR programme is the primary air safety feedback process.

It is exclusively concerned with aircraft flight path but with any aspect of the operation within or without the aircraft that concerns air safety. Consequently it offers a complete snapshot of the safety of the whole operation. Moreover, as it enables management to correct the reported problems it acts as a self-reinforcement loop and generates a positive safety culture among the flight crew.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter ,

page no 495, October 2002)

5.2.4 Payments of the Employees.

The contractual basic hours for full-time employees are 40 hours a week, inclusive of

meal breaks. Hours of full-time shift workers also average 40 a week over the shift cycle. British Airways believes that the pay rates were competitive, but not excessive

It introduced separate, lower pay bands for new employees. The difference between the midpoints of the old and new pay scales varied according to job by between 5 and 19 per cent. For security staff and other operatives the differences were about 13 per cent compared to last year. According to the information systems report 37 per cent of British Airways employees at Heathrow were on the new rates of pay, with 32 per cent at Gatwick and 48 per cent at Stansted. With the inclusion of 1,174 firemen and managerial grades, who were on pay rates which were broadly market-related and to whom new entrant pay scales did not apply, and some 430 engineering technicians who were employed on ‘old’ pay scales, which were not significantly different from the current market norm, the percentage of staff on market-related pay scales was 56.4 per cent. The remaining 2,950 staff was on old pay rates.

(British Airways plc. A report on the economic regulation of the London airports companies, chapter #,

page no 234, October 2002)


5.3 Operation Level of Information System:

5.3.1 Different types of technology used for managing information system at

operating level.

Managing a geographically diverse business effectively and profitably depends on strict yet flexible monitoring and control of all corporate data streams. Additionally, using the latest technology to provide instant access to continuously updated information, stored on secure, reliable and high-performance hardware, is essential. To achieve this, British Airways maintains a complex series of databases running on a variety of interconnected and often interdependent systems.

Most of the systems are controlled from British Airways’ two main data centers at Heathrow Airport. In particular, the data centers are responsible for maintaining key DB2′ and IMS databases. For British Airways, DB2 is a key strategic DBMS in handling large application databases. British Airways introduced DB2 as the primary means of combining the benefits of relational databases and fast transaction processing, giving a platform on which BA could develop their various data-intensive business systems.’ Having gradually developed various DB2 applications, British Airways realized that the performance and availability ‘ and hence the service provided to end users ‘ could be significantly improved by replacing the standard IBM, utilities with a purpose-built tool set. BA is especially interested in creating faster throughput of critical processing functions in all of their production systems. In effect, BA needs to minimize both planned and unplanned downtime, through ever-faster, more reliable reorganizations and recovery.’

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‘DELTA IMS VIRTUAL TERMINAL, one of the new improved technology system introduced in British Airways helped them deliver their service goals and control costs.’ British Airways had begun to install number Software’s products for both DB2 and IMS and had been impressed with the results achieved and the level of sales and technical support that had been provided.


It was therefore a natural step to enter into a program to implement an integrated and comprehensive suite of products for backup, recovery, and resource and performance management. These solutions are designed to ensure maximum data availability, using high-speed utilities and backup and recovery products. One of the crucial issues driving British Airways forward is the need to provide 100% data availability, becoming a

24×365 IT organization. This is vital in a business where staff and users worldwide need instant access to a wide range of information whose unavailability can result in a loss of business and affect the company’s reputation.

5.3.2 Database management and booking:

BA is no strangers to Voice Enabled Services. Voice recognition technology has already

helped to improve telephone bookings. It has already taken an enormous volume of calls out of our contact center. Further incremental changes are already predicted, including the ability to book hotel rooms and rental cars.

Harnessing recent developments in speech recognition technology and the benefits of an integrated development and deployment environment, Claritus developed a fully automated, speech-enabled IVR solution using Nuance Voice Recognition (ASR) and Rhetorical Text to Speech synthesis (TTS), enabling callers to request brochures using normal spoken language. With no need for live agent intervention at any stage, an effective, reliable 24/7 customer service is now in place. The system is backed up by the Inkfish Contact Center to ensure that fulfillment is still possible in those few cases where callers either refuse to ‘talk to a machine’ or do not say what is reasonably expected.

The system was developed using the Envox 5.0 software development environment and operates on the Envox runtime platform. Envox is particularly suited to the rapid development of scalable IVR applications and supports full ODBC connectivity, in this case to a SQL server database. ‘The system is state of the art and we’ve been assured by Envox that it is the first application of its kind developed using the Envox 5.0 environment.

The speech recognition component that the application uses to capture information from the caller is the Nuance 8.0 speech recognition engine; the most accurate, scalable and reliable speech recognition software on the market. The text-to-speech capabilities of the service supporting the dialogue responses are provided by the Rhetorical voice TTS engine, providing the highest quality synthesized voices and resource efficiency on the market today.

The solution has 30 telephony ports and is capable of handling up to 1000 calls per hour,

24 hours a day. The system provides full verification of caller address details using Royal Mail PAF data.

This application of industry leading speech recognition and IVR technology delivers an enhanced caller experience and provides a striking example of speech enabled technology reducing costs and indirectly adding value to a brand. BA was able to record voice prompts using their own voice talent to ensure they retained control over the presentation and branding of the customer experience. The solution is proving highly stable and has been very well received by both BA and Inkfish, providing a highly cost effective and customer friendly means of fulfillment for a mass media marketing



5.0 Conclusion

Information system is integral to the business of British airways. Running an airline is based on a high amount of information content. Information systems play a critical role in such key functions as the passenger reservation systems; yield management systems and flight operation. Apart from the above-mentioned examples there are various other fields in which information systems play a vital role in British airways. Some of them are very useful in terms to know the financial status of British airways, the future investment etc.

British airways can be broadly divided into different levels of information systems within the organization. Some of them, which are mentioned above, are Strategic level information system. This information system is used to take strategic decisions to aid in forecasting the budget for the company. Decisions include review of financial statements and estimations of future profits and costs and thus helping them to budget for the next few years. Management-level systems This information system helps the Management to do and track Sales. The managers get ready data of quantitative analysis. They get ready coefficients, pie diagrams, charts etc and thus track sales according to their products and Regions, which they cover. Knowledge-level systems This information system helps the people in the technical departments and those involved in the research and development by aiding in tracking the developments in the technical and research fronts. These systems help British Airways to automate all the paperwork and thus bring about efficient office work. Operational-Level systems These systems include Transaction Processing Systems as follows. Order Tracking System: This system uses an information base of all the orders undertaken over a period for ready reference and action. The order database is used to service the clients and distributors and works in conjunction with other transaction processing system. Employee Record Keeping:

The human resource departments use this system. It helps the management to keep

employee records.

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