MANAGEMENT INFORMATION SYSTEM

Unit 1 BBA 6 sem

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Overview

MANAGEMENT CHALLENGES• Why information systems?

• Contemporary approaches to INFORMATION SYSTEMS

• New role of info systems in organizations

• Learning to use info systems: new opportunities with technology

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Content

An introduction to Information System Meaning of Management Information System Characteristic of MIS Components of MIS The aim of MIS Types of MIS Outputs of MIS Benefits of MIS

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Meaning Of Information Systems

An information system is an organized combination of people, hardware, software, communications Networks and data resources that collects, transforms, and disseminates information in an organization.

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Types Of Information System

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MIS – A concept:

Management: Art of getting things done through and with the people in formally organized groups.

MIS is a general term for the computer systems in an enterprise that provide information about its business operations. It's also used to refer to the people who manage these systems

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MIS – A concept:

Typically, in a large corporation, "MIS" or the "MIS department" refers to a central or centrally-co ordinate system of computer expertise and management, often including mainframe systems

The study of effective systems for the development and use of information in an organization.

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MIS – A Definition

MIS is a formalized computer information system

which can integrate data from various sources to

provide the information necessary for decision-

making at the management level.

An organized assembly of resources

and procedures required to collect, process, and

distribute data for use in decision-making.

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MANAGEMENT INFORMATION SYSTEM

Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization.

MIS involve three primary resources: technology, information, and people.

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MANAGEMENT INFORMATION SYSTEM(MIS)

Management information systems are regarded to be a subset of the overall internal controls procedures in a business,

which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy

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MIS: A Definition:

An MIS is• An integrated (computer-based) user-machine

system

• For providing information

• To support decision-making functions

• In an organization

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The MIS is defined as a system based on the database of the evolved for the purpose of providing information to the people in the organization.

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MANAGEMENT INFORMATION SYSTEM(MIS)

Managerial functions:

Planning Organizing Staffing Directing Control

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Planning• Process of foreseeing the future

• What, when, who, how, where, why

• Setting goals and objectives

• Lay down policies, procedures, budgets,

strategies, programmes and schedules, to achieve

the plans

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Organizing

• Process of identifying the entire job

• Dividing the job into convenient subtasks

• Allocating subtasks to persons/groups

• Delegating authority, for effective operation and achievement of goals

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Staffing• Right person at the right job

• Define job requirements – people perspective

• Select suitable person/s for the positions

• Training and development (?)

• Organizing in respect of Staffing (?)

• Job-orientation vs. person-orientation

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Directing

• Issuing commands – classical view

• Modern philosophy• Communication

• Motivation

• Leadership

• People have to be guided, motivated and led

by the MANAGER

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Managerial functions:

Controlling• Controlling and planning – two sides of the same coin

• Ensures that activities are performed as per plans• Fixing standards of work measurements

• Measurement of actual performance

• Taking corrective measures

Decision-making is the essence of management.

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Management hierarchy: Robert Anthony – 3 levels of business

activities Strategic management (Top management)

• Exploring different markets, formulating policies, plans and budgets

Management control (Middle management)• Facilitator role; scheduling, monitoring

Operational control (Operating management)• Process and control the basic products and

services

• Raw material procurement, selling of products, physical recording and posting of cheques

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Interaction amongst the 3 levels:

Policies, plans, objectives and budgets of Top management

Passed to middle mngt as Revenue, cost, profit goals

Review and agreement Middle mngt issues specific schedules and

operating goals along with yardsticks of measurement

Operating mngt – produce goods and services to meet the revenue and profit goals

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Information Processed data, presented in a form which

assists decision-makers May contain an element of surprise,

reduce uncertainty May provoke a manager to initiate action Data and Info – relative concepts

• Recent

• Producer-consumer relationship Often used interchangeably

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Info needs of different levels:

According to J. Kanter (1996) Top Management

• Unstructured

• Non-programmed

• Futuristic

• Approximate

• External

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Operating Management:

• Structured

• Programmed

• Historical

• Exact

• Internal

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New perspective of Information:

MIS = MI + S MIS must provide MI to managers for decision-

making MI – quality info

• Timeliness

• Accuracy

• Completeness

• Adequacy

• Explicitness MI – a subset of the entire available info

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System A set of interconnected elements to achieve a common

objective

Elements are interrelated and interdependent

Composed of sub-systems, which in turn may be made up of other subsystems

The set of elements may be: Input(s), Process(es), or output(s)

Info system converts data into information

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System Cybernetic systems – self-regulating, self-

monitoring (feedback and control elements attached)

A system cannot exist in vacuum

It exists and functions in an environment, separated by its boundary

Several systems may share the same environment

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System

Some systems may be connected by a shared boundary

Open system: interacts with its environment, exchanges inputs and output

Closed systems: do not interact, or exchange any inputs or outputs with its environment

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The system utilizes:

• Computer hardware and software

• Manual procedures

• Models for decision-making, and

• A database

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Characteristics of MIS Management-oriented: The basic objective of MIS

is to provide information support to the management in the organization for decision making.

Management directed: When MIS is management-oriented, it should be directed by the management because it is the management who tells their needs and requirements more effectively than anybody else.

Integrated: It means a comprehensive or complete view of all the subsystems in the organization of a company.

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Characteristics of MIS Common data flows: The integration of different

subsystems will lead to a common data flow which will further help in avoiding duplicacy and redundancy in data collection, storage and processing.

Heavy planning-element: The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years and sometimes a much longer period.

Subsystem concept: When a problem is seen in 2 sub parts, then the better solution to the problem is possible.

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Characteristics of MIS Common database: This is the basic feature of MIS

to achieve the objective of using MIS in business organizations.

Computerized: MIS can be used without a computer. But the use of computers increases the effectiveness and the efficiency of the system.

User friendly/Flexibility: An MIS should be flexible.

Information as a resource: Information is the major ingredient of any MIS.

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MIS Functions:

Data capturing Processing of data Storage Retrieval Dissemination of MI – finished product of

MIS

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Role Of MIS

The role of MIS in an organization can be compared to the role of

heart in the body.

1.The information is the blood and MIS is the heart. In the body

the heart plays the role of supplying pure blood to all the

elements of the body including the brain.

The MIS plays exactly the same role in the organization.

2.The system ensures that an appropriate data is collected from

the various sources, processed, and sent further to all the

needy destinations.

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Role Of MIS

3. The system is expected to fulfill the information needs of

an individual, a group of individuals, the management

functionaries: the managers and the top management.

4.The MIS satisfies the diverse needs through a variety of

systems such as Query Systems, Analysis Systems,

Modeling Systems and Decision Support Systems.

5. The MIS helps in Strategic Planning, Management

Control, Operational Control and Transaction Processing.

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Role Of MIS

6.The MIS helps the clerical personnel in the transaction

processing and answers their queries on the data pertaining

to the transaction, the status of a particular record and

references on a variety of documents.

7.The MIS helps the junior management personnel by

providing the operational data for planning, scheduling and

control, and helps them further in decision making at the

operations level to correct an out of control situation. 

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Role Of MIS

8.The MIS helps the middle management in short term

planning, target setting and controlling the business

functions.

9.It is supported by the use of the management tools of

planning and control.

10.The MIS helps the top management in goal setting,

strategic planning and evolving the business plans and their

implementation.

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Role Of MIS

11.The MIS plays the role of information generation, communication problems and helps in the process of decision making.

12.The MIS, therefore, plays a vital role in the management, administration and operations of an organization.

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Features of MIS

Timeliness Accuracy

Consistency Completeness

Relevance

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Components of MIS

1) Marketing Research System (MRS)

Marketing research can be seen as the systematic and objective search for and analysis of data and information relevant to the identification and solution of any problem in the field of marketing.

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Components of MIS

2) Marketing Intelligence System (MIS)The process of acquiring and analyzing information in order

to understand the market (both existing and potential customers);

to determine the current and future needs and preferences, attitudes and behavior of the market;

and to assess changes in the business environment that may affect the size and nature of the market in the future.

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Components of MIS

3) Internal Record System (IRS) Marketing managers rely on internal reports on orders, sales,

prices, costs, inventory levels, receivables, payables, and so on. By analyzing this information, they can spot important opportunities and problems.

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Components of MIS

4) Decision Support System(DSS)A decision support system (DSS) is a computer-based

information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance.

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Aim of Management Information System

The main aim of MIS is to inform management and help them make informed decisions about management and the way the business is run.

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Elements of MIS 1.Hardware

2.Software

3.Control4.Databases and application programs5.People6.Telecommunications and Networks

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Outputs Of a MIS

Key-indicator report which summarizes the previous day’s critical activities and also it is typically available at the beginning of each day.

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Outputs Of a MIS

Scheduled reports which are produced periodically, or on a Schedule (daily, weekly, monthly).

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Outputs Of a MIS

Demand report which gives certain information at a manager’s request.

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Outputs Of a MIS

Exception report which is automatically produced when a situation is unusual or requires management action.

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Benefits of MIS

1.It improves personal efficiency.

2.It expedites problem solving(speed up the progress

of problems solving in an organization).

3.It facilitates interpersonal communication

4.It promotes learning or training.

5.It increases organizational control.

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Benefits of MIS

6.It generates new evidence in support of a decision.

7.It creates a competitive advantage over competition.

8.It encourages exploration and discovery on the part

of the decision maker.

9.It reveals new approaches to thinking about the

problem space.

10.It helps automate the Managerial processes.

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MANAGEMENT INFORMATION SYSTEM AND COMPUTER

Translating the real concept of the MIS into reality is technically, an infeasible proposition unless computers are used.

The variety of the hardware having distinct capabilities makes it possible to design the MIS for a specific situation.

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MANAGEMENT INFORMATION SYSTEM AND COMPUTER

The ability of the hardware to store data and process it at a very fast rate helps to deal with the data volumes, its storage and access effectively.

The ability of the computer to sort and merge helps to organize the data in a particular manner and process it for complex lengthy computations.

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MANAGEMENT INFORMATION SYSTEM AND COMPUTER

Since the computer is capable of digital, graphic, word image, voice and text processing, it is exploited to generate information and present it in the form which is easy to understand for the information user.

The computer system provides the facilities such as READ ONLY where you cannot delete to UPDATE.

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Types Of MIS Transaction processing systems: These systems

process a large volume of routine, recurring transactions.

Operations information systems: These systems gather comprehensive data, organize it and summarize it in a form that is useful for managers.

Decision support systems: These systems help mangers with the necessary information to make intelligent decisions.

Expert systems: They are meant to mimic humans in making decisions in a specific field.

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MIS Characteristics:

1.System approach

• Takes Comprehensive view in the light of its objective

2.Management oriented

• Top down approach followed

• Derived from the overall business objectives

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MIS Characteristics:

3.Need based

• Caters to info needs at different levels4.Exception based

• Exception based reporting principle5.Futuristic

• On the basis of projections

6.Integrated• Blends info from several operational areas

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MIS Characteristics:

7.Common data flows• Should avoid data duplication and redundancy

8.Long term basis• Strive to be futuristic

9.Divide and conquer• Use partitioning into subsystems

10.Central database• Let subsystems access the master data

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