Introduction to MIS
The word system is derived from the Greek word ―system‖ which means a
organized relationship among the following unit or component.
“A system is an orderly grouping of interdependent components linked together according
to a plan to achieve a specific goal.”
The word component may refer to physical parts (engine, wheels of cars), management steps
(planning, organizing, controlling) or a sub subsystem in a multi level structure. It is to be
noted that a system is not a randomly arranged set. It is arranged with some logic governed
by rules, regulation, principles and policies.
In MIS we are usually concerned with man-made system involving input, process and output,
as represented in figure. A system may have multiple inputs and multiple outputs.
All systems operate in an environment. The environment may influence the system in its
design and performance. When a system is designed to achieve certain objective, it
automatically sets the boundaries for itself. The understanding of boundaries of the system is
essential to bring clarity in explaining the system components and their arrangement.
Characteristics of System :
Following characteristics are present in all systems :
a) Organization
b) Interaction
c) Interdependence
d) Integration
e) Central Objective
Organization : Organization implies structure and order. It is the arrangement of
components that helps to achieve objectives. Hierarchical relationship starting with the
president on top and leading down ward to the blue collar worker represent the organization
structure
Interaction : Interaction refers to the procedure in which each component interact with other
components of the system. In an organization, for example purchasing must interact with
product, advertising with sales and payroll with personnel.
Interdependence : Independence is concerned with how a system is tied together; it is more
than sharing a physical part or location. It means that parts of the system part or location with
in the system, even through each part performance. A unique function successful integration
will typically produce a better request as whole rather than if each component works
independently.
Central Objective : Objective may be real or stated. Objective is determined by higher
management and user must be aware about the central objective well in advance.
Types of System :
Physical or Abstract : Physical system is tangible entities that may be static or dynamic in
nature. Abstract system is conceptual or non-physical. The abstract is conceptualization of
physical situations.
Open and Closed : An open system continually interacts with its environment. It receives
input from the outside and delivers output to outside. A closed system is isolated from
environment influences.
Sub System and Super System : Each system is part of a large system. The business firm is
viewed as the system or total system when focus is on production, distribution of goal and
sources of profit and income. The total system consists of all the objects, attributes and
relationship necessary to accomplish an objective given a number of constraints.
Sub systems are the smaller systems within a system. Super system denotes extremely large
and complex system
Permanent and Temporary System : A permanent system is a system enduring for a time
span that is long relative to the operation of human. Temporary system is one having a short
time span.
Natural and Man Made System : System which is made by man is called man made
system. Systems which are in the environment made by nature are called natural system.
Deterministic and Probabilistic : A Deterministic system is one in which the occurrence of
all events is perfectly predictable. If we get the description of the system state at a particular
time, the next state can be easily predicted.
Probabilistic system is one in which the occurrence of events cannot be perfectly predicted.
Man-made Information System : It is generally believed that the information reduces
uncertainty about a state or event. An information system is the basis for interaction between
the user and the analyst. It determines the nature of relationship among decision makers.
An information system may be defined as a set of devices, procedures and operating system
designed around user-base criteria to produce information and communicating it to the user
for planning control and performance.
Information
Data :Data is raw facts. Data is like raw material. Data does not interrelate and also it does
not help in decision making. Data is defined as groups of non-random symbols in the form of
text, images, voice representing quantities, action and objects.
Information : Information is the product of data processing. Information is interrelated data.
Information is equivalent to finished goods produced after processing the raw material. The
information has a value in decision making. Information brings clarity and creates an
intelligent human response in the mind.
According to Davis and Olson : ―Information is a data that has been processed into
a form that is meaningful to recipient and is of real or perceived value in the current or the
prospective action or decision of recipient.
It is a most critical resource of the organization. Managing the information means managing
future. Information is knowledge that one derives from facts placed in the right context with
the purpose of reducing uncertainty.
Characteristics of Information :
The parameters of a good quality are difficult to determine for information.
Quality of information refers to its fitness for use, or its reliability.
Following are the essential characteristic features :
i) Timeliness : Timeliness means that information must reach the
recipients within the prescribed timeframes. For effective decision-making,
information must reach the decision-maker at the right time, i.e. recipients
must get information when they need it. Delays destroys the value of
information. The characteristic of timeliness, to be effective, should also
include up-to-date, i.e. current information.
ii) Accuracy : Information should be accurate. It means that information
should be free from mistakes, errors &, clear. Accuracy also means that the
information is free from bias. Wrong information given to management
would result in wrong decisions. As managers decisions are based on the
information supplied in MIS reports, all managers need accurate
information.
iii) Relevance : Information is said to be relevant if it answers especially for
the recipient what, why, where, when, who and why? In other words, the
MIS should serve reports to managers which is useful and the information
helps them to make decisions..
iv) Adequacy : Adequacy means information must be sufficient in quantity,
i.e. MIS must provide reports containing information which isrequired in
the deciding processes of decision-making. The report should not give
inadequate or for that matter, more than adequate information, which may
create a difficult situation for the decision-maker. Whereas inadequacy of
information leads to crises, information overload results in chaos.
v) Completeness : The information which is given to a manager must be
complete and should meet all his needs. Incomplete information may
result in wrong decisions and thus may prove costly to the organization.
vi) Explicitness : A report is said to be of good quality if it does not require
further analysis by the recipients for decision making.
vii) Impartiality : Impartial information contains no bias and has been
collected without any distorted view of the situation.
Information system, an integrated set of components for collecting, storing, and processing
data and for providing information, knowledge, and digital products. Business firms and
other organizations rely on information systems to carry out and manage their operations,
interact with their customers and suppliers, and compete in the marketplace. Information
systems are used to run interorganizational supply chains and electronic markets. For
instance, corporations use information systems to process financial accounts, to manage their
human resources, and to reach their potential customers with online promotions.
Classification of Information : The information can be classified in a number of ways
provide to better understanding. Jhon Dearden of Harvard University classifies information
in the following manner :
(1) Action Verses No-Action Information : The information which induces
action is called action Information. ‗No stock‗report calling a purchase
action is an action information.
The information which communicates only the status is No-Action
Information. The stock balance is no-action information.
(2) Recurring Verses No-Recurring Information : The information
generated at regular intervals is Recurring Information. The monthly
sales reports, the stock statement, the trial balance, etc are recurring
information. The financial analysis or the report on the market research
study is no-recurring information.
(3) Internal and external information : The information generated through
the internal sources of the organization is termed as Internal Information,
while the information generated through the govt. reports, the industry
survey etc., termed as External Information, as the sources of the data are
outside the organization.
The information can also be classified, in terms of its application :
Planning Information : Certain standard norms and specifications are
used in planning of any activity. Hence such information is called the
Planning Information. e. g. Time standard, design standard.
Control Information : Reporting the status of an activity through a
feedback mechanism is called the Controlling Information. When such
information shows a deviation from the goal or the objective, it will induce
a decision or an action leading to control.
Knowledge Information : A collection of information through the library
records and the research studies to build up a knowledge base as an
information is known as Knowledge Information.
Organization Information : When the information is used by everybody
in the organization, it is called Organization Information. Employee and
payroll Information is used by a number of people in an organization.
Functional/ Operational Information : When the information is used in
the operation of a business it is called Functional/ Operational
Information.
Database Information : When the information has multiple use and
application, it is called as database information. Material specification or
supplier information is stored for multiple users.
Different Sub system of MIS
The system approach applies equally to management information system as well.The
management information system receives input form various internal and external
sources. These inputs are processes through the MIS to produce the desired output, which
may be in turn used for different managerial task within the organization. MIS has several
subsystems which are interdependent, interrelated and interacting.
The Sub-Systems within the MIS are :
Computer System : The computer system as a subsystem of MIS includes the Hardware, the
operating system and the software.
Management : The management system as a subsystem of MIS includes the managerial task
relating to the effective functioning. It includes planning, control and co-ordination, human
resource development etc.
System Engineering : The system engineering subsystem of MIS includes system design and
development as well as system maintenance. The synergistic combination of hardware and
system engineering is evolved into software engineering. Software engineering as defined by
Fritz Baucer, as the establishment and use of engineering principals in order to obtain
economically feasible software that is reliable and works efficiently on real machines.
Application : The application subsystem of MIS includes various application system, which
are developed and implemented to the desire outputs.
This process of integration of business system with management information system involves
three key elements. They are :
a) Technology
b) People
c) Business
Technology : Technology provides the bridge between the business systems, their
information needs on one side, the means of providing these information needs on the other.
Technology provides the tools and techniques that help to generate the information that are
required for the business system. Selection of the appropriate technology has got bearing on
effectiveness of the bridge.
People : People generate the required information and apply the same for business planning,
control and decision making. The attitude and aspiration of the people involved in generating
and utilizing the information has a bearing on effective use of integrated system.
Business : The business function and the environment in which the business organization
have an impact on the entire integration exercise.
Management Information Systems (MIS), referred to as Information
Management and Systems, is the discipline covering the application of
people, technologies, and procedures collectively called information
systems, to solving business problems.
“'MIS' is a planned system of collecting, storing and
disseminating data in the form of information needed to carry out
the functions of management.”
Academically, the term is commonly used to refer to the group of
information management methods tied to the automation or support for
human decision making, e.g. Decision Support Systems, Expert Systems,
and Executive Information Systems.
Management : Management is art of getting things done through and
with the people in formally organized groups. The basic functions
performed by a manager in an organization are: Planning, controlling,
staffing, organizing, and directing.
Information : Information is considered as valuable component of an
organization. Information is data that is processed and is presented in a
form which assists decision maker.
Processin Informatio
Data g n
Information Generation
System : A system is defined as a set of elements which are joined together to achieve a
common objective. The elements are interrelated and interdependent. Thus every system is
said to be composed of subsystems. A system has one or multiple inputs, these inputs are
processed through a transformation process to convert these input( s) to output.
These subsystems are interrelated through a process of
Input - Throughput - Output
Transformation
Input Output
Process
Objectives of MIS :
Data Capturing : MIS capture data from various internal and external sources of
organization. Data capturing may be manual or through computer terminals.
Processing of Data : The captured data is processed to convert into required information.
Processing of data is done by such activities as calculating, sorting, classifying, and
summarizing.
Storage of Information : MIS stores the processed or unprocessed data for future use. If any
information is not immediately required, it is saved as an organization record, for later use.
Retrieval of Information : MIS retrieves information from its stores as and when required
by various users.
Dissemination of Information : Information, which is a finished product of MIS, is
disseminated to the users in the organization. It is periodic or online through computer
terminal.
Characteristics of MIS :
Systems Approach : The information system follows a systems approach. Systems approach
means taking a comprehensive view or a complete look at the interlocking sub-systems that
operate within an organization.
Management Oriented : Management oriented characteristic of MIS implies that the
management actively directs the system development efforts. For planning of MIS, top-down
approach should be followed. Top down approach suggests that the system development
starts from the determination of management‘s needs and overall business objective. To
ensure that the implementation of system‘s polices meet the specification of the system,
continued review and participation of the manager is necessary.
Need Based : MIS design should be as per the information needs of managers at different
levels.
Exception Based : MIS should be developed on the exception based also, which means that
in an abnormal situation, there should be immediate reporting about the exceptional situation
to the decision –makers at the required level
Future Oriented : MIS should not merely provide past of historical information; rather it
should provide information, on the basis of future projections on the actions to be initiated.
Integrated : Integration is significant because of its ability to produce more meaningful
information. Integration means taking a comprehensive view or looking at the complete
picture of the interlocking subsystems that operate within the company.
Common Data Flow : Common data flow includes avoiding duplication, combining similar
functions and simplifying operations wherever possible. The development of common data
flow is an economically sound and logical concept, but it must be viewed from a practical
angle.
Long Term Planning : MIS is developed over relatively long periods. A heavy element of
planning should be involved.
Sub System Concept : The MIS should be viewed as a single entity, but it must be broken
down into digestible sub-systems which are more meaningful.
Central database : In the MIS there should be common data base for whole system
Organizational Need for MIS in a Company?
To facilitate the management decision making at all levels of company,
the MIS must be integrated. MIS units are company wide. MIS is available
for the Top management. The top management of company should play
an active role in designing, modifying and maintenance of the total
organization wide management information system.
Information system and Information technology have become a vital
component of any successful business and are regarded as major
functional areas just like any other functional area of a business
organization like marketing, finance, production and HR. Thus it is
important to understand the area of information system just like any other
functional area in the business. MIS is important because all businesses
have a need for information about the tasks which are to be performed.
Information and technology is used as a tool for solving problems and
providing opportunities for increasing productivity and quality.
Information has always been important but it has never been so available,
so current and so overwhelming. Efforts have been made for collection
and retrieval of information, However, challenges still remain in the
selection analysis and interpretation of the information that will further
improve decision making and productivity.
MIS for a Business Organization :
Support the Business Process : Treats inputs as a request
from the customer and outputs as services to customer. Supports
current operations and use the system to influence further way of
working.
Support Operation of a Business Organization : MIS
supports operations of a business organization by giving timely
information, maintenance and enhancement which provides
flexibility in the operation of an organizations.
To Support Decision Making : MIS supports the decision
making by employee in their daily operations. MIS also supports
managers in decision making to meet the goals and objectives of
the organization. Different mathematical models and IT tools are
used for the purpose evolving strategies to meet competitive
needs.
Strategies for an Organization : Today each business is running
in a competitive market. MIS supports the organization to evolve
appropriate strategies for the business to assented in a competitive
environment
