Management

Information System
Unit- III (Part-2)
By-
Ms. Geetanjli K. Raghuwanshi
Assistant Professor
Dept. of Computer Applications
BSSS College, Bhopal
 Management Information System
The three components of MIS provide a more complete and focused
definition, where System suggests integration and holistic view,
Information stands for processed data, and Management is the
ultimate user, the decision makers.
 Management information system can thus be analyzed as follows −

 Management

 Management covers the planning, control, and administration of the

operations of a concern. The top management handles planning; the

middle management concentrates on controlling; and the lower
management is concerned with actual administration.
 Information

 Information, in MIS, means the processed data that helps the

management in planning, controlling and operations. Data means all

the facts arising out of the operations of the concern. Data is
processed i.e. recorded, summarized, compared and finally
presented to the management in the form of MIS report.
 System

 Data is processed into information with the help of a system. A

system is made up of inputs, processing, output and feedback or

control.
 Goals of MIS
The goals of an MIS are to implement the organizational structure and
dynamics of the enterprise for the purpose of managing the organization
in a better way and capturing the potential of the information system for
competitive advantage.
Following are the basic objectives of an MIS −
 Capturing Data − Capturing contextual data, or operational
information that will contribute in decision making from various
internal and external sources of organization.
 Processing Data − The captured data is processed into information

needed for planning, organizing, coordinating, directing and

controlling functionalities at strategic, tactical and operational level.
Processing data means −
◦ making calculations with the data
◦ sorting data
◦ classifying data and
◦ summarizing data
 Information Storage − Information or processed data need to be

stored for future use.

 Information Retrieval − The system should be able to retrieve this

information from the storage as and when required by various users.

 Characteristics of MIS
Following are the characteristics of an MIS −
 It should be based on a long-term planning.
 It should provide a holistic view of the dynamics and the structure of the
organization.
 It should work as a complete and comprehensive system covering all
interconnecting sub-systems within the organization.
 It should be planned in a top-down way, as the decision makers or the management
should actively take part and provide clear direction at the development stage of
the MIS.
 It should be based on need of strategic, operational and tactical information of
managers of an organization.
 It should also take care of exceptional situations by reporting such situations.
 It should be able to make forecasts and estimates, and generate advanced
information, thus providing a competitive advantage. Decision makers can take
actions on the basis of such predictions.
 It should create linkage between all sub-systems within the organization, so that
the decision makers can take the right decision based on an integrated view.
 It should allow easy flow of information through various sub-systems, thus avoiding
redundancy and duplicity of data. It should simplify the operations with as much
practicability as possible.
 Although the MIS is an integrated, complete system, it should be made in such a
flexible way that it could be easily split into smaller sub-systems as and when
required.
 A central database is the backbone of a well-built MIS.
Characteristics of Computerized MIS
Following are the characteristics of a well-designed
computerized MIS −
 It should be able to process data accurately and with high

speed, using various techniques like operations research,

simulation, heuristics, etc.
 It should be able to collect, organize, manipulate, and update

large amount of raw data of both related and unrelated

nature, coming from various internal and external sources at
different periods of time.
 It should provide real time information on ongoing events

without any delay.

 It should support various output formats and follow latest

rules and regulations in practice.

 It should provide organized and relevant information for all

levels of management: strategic, operational, and tactical.

 It should aim at extreme flexibility in data storage and

retrieval.
 Elements of MIS

Managing with information involve gathering the necessary data

(crude input or raw material) and processing these data into
meaningful information. To understand MIS clearly, it is very much
required to define these three words management, information, and
system. It can be described with the help of figure 1.1.
 Objectives of MIS
When any organization wishes to establish the MIS, it must be very
clear about the need of information required by the different levels of
management.
Followings are the reasons for the adoption of the MIS:
1. To provide information for planning, organizing and controlling
purposes.
2. To store and manage data efficiently from all the functional areas
of the business.
3. To process the collected data and derive information out of them.
4. To provide information quickly as and when required.
5. To reduce the risk and uncertainties in the managerial decision-
making.
6. To collect and store the data for the purpose of internal research.
7. To assist in identifying the managerial problems and their solution.
8. To provide information regarding work force planning.
9. To provide the information regarding the financial health of the
business organization.
10. To provide information regarding production and inventory.
…cont.

12. To speed up the execution of the results with the

reliable data available.
13. To smooth up the flow of data through various levels
of the organization.
14. To provide information regarding work force planning.
15. To provide the information regarding the financial
health of the business organization.
 Importance of MIS
 In present business organizations, MIS play a very important role. It is
a process of collection and storing of the data useful for the
organization. Executives retrieve these data, when required and
processed them for generating information. Executives determine the
future course of action of the organization over the long and short-term
periods.
 The responsibility of corporate executives is decision making, laying
down policy, planning, organizing, controlling, directing,
communicating and motivating, evaluating and gathering things done
to meet the overall objectives and goals of organization. MIS provides
information regarding all these aspects of managing.
 Previously, the business organizations were not perceived as a system.
All the functional areas were independent and there was not a cross
discussion amongst the managers of different functional areas. At that
time, sale was considered only the marketing phenomenon and the sale
force was solely responsible for the achievement of the sales target.
 However, in present days, all departments hold equal responsibility. If
there is any problem in selling goods, all the members concerned of
Marketing and Production departments sit together and find out the
fault after recognizing the problem(s). Appropriate steps are taken to
find out the ways to achieve the sales target. This mechanism helps the
organization to achieve its objectives efficiently and economically.
 Information System
The various types of systems the organization, exchange data with
one another. Transaction processing systems are major source of
data for other systems, especially MIS and DSS. Executive support
systems are primarily receipts of data from lower level systems.
However, the different systems in an organization are only loosely
integrated. The information needs of the various functional areas and
organizational levels are too specialized to be served by a single
system.
Information systems to support three levels of strategy used in
business.
Information systems can be used to support strategy at the
business, firm and industry level.
Information systems can be used to help firms become a low-cost
producer, differentiate products, or serve new markets.
Information systems can also be used to “lock in” customers and
suppliers using efficient customer response and supply chain
management applications.
Value chain analysis is useful at the business level to highlight
specific activities in the business where information systems are
…cont.

At the firm level, information systems can be used to

achieve new efficiencies or to enhance services by tying
together the operations of disparate business units, so
that they can function as a whole or promote the
sharing of knowledge across business units.
At the industry level, systems can promote
competitive advantage by facilitating cooperation with
other firms in the industry, creating consortiums or
communities for sharing information, exchanging
transactions or coordinating activities.
The competitive forces model and network economics
are useful concepts for identifying strategic
opportunities for systems at the industry level.
 Types of information System
There are six major types of information systems in contemporary organizations that
are designed for different purposes and different audiences.
 1.Operational-level systems are Transaction Processing Systems (TPS), such as
payroll or order processing, that track the flow of the daily routine transactions
necessary to conduct business. Knowledge-level systems support clerical, managerial
and professional workers.
 2.They consist of Office Automation Systems (OAS) for increasing the productivity
of data workers and Knowledge Work Systems (KWS) for enhancing the
productivity of knowledge workers
 3.Management-level systems (MIS and DSS) provide the management control level
with reports and access to the organization’s current performance and historical
records
 4.Most MIS reports condense information from a TPS and are not highly analytical.
Decision support systems (DSS) support management decisions when these
decisions are unique, rapidly changing, and not specified easily in advance. These
systems have more advanced analytical models and data analysis capabilities than
MIS and often draw on information from external as well as internal sources.
 5.Executive Support Systems (ESS) support the strategic level by providing a
generalized computing and communications environment to assist senior
management’s decision making .An ESS has limited analytical capabilities but can
draw on sophisticated graphics software and many sources of internal and external
information.
 6.An Expert System is a Software System that attempts to reproduce the
performance of one or more humans and experts, most commonly in a specific
problem domain
Role of MIS and MIS Instrument for
Organizational Change
 MIS acts’ as an agent or a catalyst to bring about organizational change
that is needed to cope up with the changing business environment and
the effect of external forces
 The role of the MIS in an organization can be compared to the role of
heart in the body. The information is the blood and MIS is the heart. In
the body, the heart plays the role of supplying pureblood to all the
elements of the body including the brain. The heart works faster and
supplies more blood when needed. It regulates and controls the incoming
impure blood, processes it and sends it to the destination in the quantity
needed. It fulfills the needs of blood supply to human body in normal
course and also in crisis.
 The MIS plays exactly the same role in the organization. The system
ensures that an appropriate data is collected from the various sources,
processed, and sent further to all the needy destinations. 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. The MIS satisfies the diverse needs through a variety of
systems such as Query Systems, Analysis Systems, Modeling Systems
and Decision Support Systems. The MIS helps in Strategic Planning,
Management Control, Operational Control and Transaction Processing.
…cont.

 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. The MIS helps the junior management
personnel by providing the operational data for planning,
scheduling and Controlling and helps them further in decision
making at the operations level to correct an out of control
situation. The MIS helps the middle management in short-term
planning, target setting and controlling the business functions. It
is supported by the use of the management tools of planning and
control. The MIS helps the top management in goal setting,
strategic planning and evolving the business plans and their
implementation. The MIS plays the role of information generation,
communication, problem identification and helps in the process of
decision making. The MIS, therefore, plays a vital role in the
management, administration and operations of an organization.
Any doubts ?