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MANAGEMENT INFORMATION SYSTEM

INFORMATION AN IMPORTANT RESOURCE

DATA Vs INFORMATION

Data is a collection of facts, figures and statistics related to an object. Data can be processed to create

useful information.

The manipulated and processed form of data is called information. It is more meaningful than data. It

is used for making decisions. Data is used as input forprocessingand information I output of this

processing.

FIVE MAIN RESOURCES IN ANY ORGANIZATION:

Personnel

Material ------------------- PHYSICAL Machines

Money

Information --------------------- CONCEPTUAL

Today, Information is the driving force for any business.It goes without saying that all the managerial

functions are performed through decision making for taking rational decisions, timely and reliable

information is essential for proper function of any business.

Inorder to survive and grow in todays' world of ever increasing complexities of business as well as

management in every business organization, one must have a properly planned, analyzed, designedand maintained Information system so that it provides timely, reliable and useful infromation to

enable the managment to take speedy and rational decisions.Thus, information and information

processing are vital to organizational functioning and the term MIS well understood in this domain.

The era of liberalization and globalization, in which the organizations are required to compete not

locally but globally, has further enhanced the necessity for such a system. Computers and information

technology have added yet another dimension in this direction. It is because of the above cited reasons

that MIS nowadays, is considered to be of paramount importance, sometimes regarded as the nerve

centre of an organization. Such systems assist decision makers in organizations by providing

management information at various stages of decision making and thus greatly help the organizations

to achieve the predetermined goals and objectives. On the other hand, MIS which is not adequately

planned for, analyzed , designed , implemented or obsolete information, which may prove costly or

even fatal for the organization.

MIS is not new; only its computerization is new. Before computers, MIS techniques existed to supply

managers with the information that would permit them to plan and control operations. The computer

has added one or more dimensions such as speed, accuracy and increase volumes of data that permit

the considerations of more alternatives in decisions.

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CONCEPT OF MIS

The concept of MIS has evolved over a period of time comprising many different facets of the

organisational functions.

The initial concept of MIS was to process data from the organization and present it in the form of

reports at regular intervals.

This concept was further modified when a distinction was made between data and ifnormation. What

is needed is an information and not a mass of data .However, the data can be analysed in a number oif

ways, producing different shades and specifications of the information as product .

This concept was further modified , that the system should present information in sucha form and

form that it creates impact on user, provoking decisions,an action or investigation.Hence the concept

of exception reporting was imbibed in MIS.

The concept was then evolved that the system should be capable of handling needbased exception

reporting. This need maybe either for an individual or a group of people.This called for keeping alldata togetherin such a form that it can be accessed byanybody and can be processed to suit his

needs..This gave rise to the concept of DATABASE.

Over a period of time, when these conceptual developments were taking place, the concept of the end

user computing using multiple database emerged. The change was, decenteralization of the system

and the user of information becoming independent of computer professionals.When thsi became

reality, concept of MIS changed to decision making system.

A MIS can be evolved for a specific objective if it is evolved after systematic planning and design.It

calls for an analysis of a business, management views and policies , organization culture and the

management style.The information should be generated in this setting and must be useful in managing

the business. The MIS today hanles databases, provides computing facilities,gives varitiey of decision

making tool and gives information through data analysis, therefore it relies heavily on system theory .

System theory offers solution to handle the complex situations of input and output.

The conceptual view of MIS:

The concept is a blend of principles, theories and practices of management, information and

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system giving rise to a single product called MANAGEMENT INFORMATION SYSTEM.

The concept of management gives high regard to the individual and his ability to use the

information.

MIS gives information through data analysis for which it relies on many academic disciplines

like management science, OR, organization behavior, psychology, etc.

The foundation of MIS is the principles of management and its practices.

The MIS,therefore relies heavily on systems theory.

PHYSCIAL VIEW OF MIS

The physical view of MIS can be seen as as assembly of several subsystems based on the databases in

the organisation. These subsystems range from data collection, transacion processing and validating,

processing, analysing and storing the information in databases. The subsystems could be at a

functional level or a corporate level. The information is evolved through them for a functional or a

departmental management and it provides the information for the management of business at the

corporate level.All the systems shown in the above diagram together are MISs.

SYSTEM APPROACH.

The idea of system approach in business was born with the notion of synergism, ie. The working

together of two things to produces an affetc greater than the sum of their individual affects.

Due to the increased complexity of business and management , the effectiveness of business

organization has been been less optimum because managers fails to relate the part or fucntions of the

systems to each other and the whole.

The need for synergy in organization calls for the systems approach in management. It has been

accelerated by two major reasons:

The increased complexity of business

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The increased complexity of management

The increased complexity of business can be attributed to four primary causes

(i) Technological revolution

(ii) Research and development

(iii) Product changes

(iv) Information explosion

The increased complexity of management can be met by following four breakthroughs or

developments:

(i) The theory of information feedback systems

(ii) A better understanding of the decision making process

(iii) Operations research or management science techniques that permit an experimental or

simulation approach to complex problems

(iv) The electronic computer

MANAGEMENT INFORMATION SYSTEM

Before begin with to understand the term MIS, it is important to understand the three sub-

components:Management, Information and System - spereately so that when put together , it can bring

out the focus clearly & effectively.

Management: Management can be defined as science of using resources rationally (using appropriate skills,

approaches and techniques) and economically to achieve desired results. Management comprises the

processes or activities that managers do in the operation of their organization:plan by setting strategies and

goals and selective the best course of action to achieve the plan ; They organize the tasks necessary for the

operational plan , set these tasks up into homogeneous groups and assign authority delegations . Theycontrol the performance of the work by setting performance standards and avoiding deviations from

standard.

Information: The information is product of analysis of data. This concept is similar to a raw material and a

finished product, where data is a raw material and the finished product is information. Information consists

of data that have been retrieved, processed, or otherwise used for informative or inferences purposes, or a

basis for forecasting or decision making.

System: A system can be described simply as a set of elements joined together for a common objective.

A subsystem is part of a larger system with which we are concerned. All systems are part of larger systems.

In MIS, the word system implies that MIS follows a system approach which means a wholistic approach and

is based on the concept of synergy where the output is greater than the sum of its parts.Thus , it clearly indicates that MIS is not a single system, rather it is an integrated system where fit into an

overall design. Hence, The system concept of MIS is therefore one of optimizing the o/p of the organization

by connecting the operating subsystems through he medium of information exchange.

MIS: DEFINITION:

The MIS is defined as an integrated system of man and machine for providing information to support the

operations, the management and the decision making functions in the organization.

A management information system (MIS) is a subset of the overall internal controls of a business covering

the application of people, documents, technologies, and procedures by management accountants to solve

business problems such as costing a product, service or a business-wide strategy. MIS are distinct from

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regular information systems in that they are used to analyze other information systems applied in operational

activities in the organization. Academically, the term is commonly used to refer to the group of information

management methods tied to the automation or support of human decision making, ex: Decision Support

Systems, Expert systems, and Executive information systems.

It has been described as, "MIS 'lives' in the space that intersects technology and business.

Technology Businesss

MIS combines tech with business to get people the information they need to do their jobs

better/faster/smarter. Information is the lifeblood of all organizations - now more than ever. MIS

professionals work as systems analysts, project managers, systems administrators, etc., communicating

directly with staff and management across the organization." The termsMISand information system are often

confused. Information systems include systems that are not intended for decision making. The area of study

called MIS is sometimes referred to, in a restrictive sense, as information technology management. That area

of study should not be confused with computer science. IT service management is a practitioner-focused

discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporateselements that are not necessarily focused on decision support.

VARIOUS OTHER DEFINITIONS FOR MIS

"An integrated user-machine system for providing information to support operations, management

and decision making functions in an organization. The system utilizes computerized and manual

procedures; models for analysis, planning, control and decision making; and a database."

A management information system (MIS) is a computer-based system that provides the information

necessary to manage an organization effectively. An MIS should be designed to enhancecommunication among employees, provide an objective system for recording information and support

the organization's strategic goals and direction.

WHY MANAGEMENT INFORMATION SYSTEM?

A majority of workers today are knowledge workers they spend time creating, distributing, or using

information. Example: bankers, coordinators, caseworkers, counselors, community organizers,

programmers, etc

About 80% of an executives time is devoted to information receiving,

communicating, and using it. Information is the basis for virtually all activities performed in an organization.

Best use of two key ingredients in organizations people and information.

Effective utilization of information systems in management..

Productive use of information.

Information is a resource to increase efficiency, effectiveness and competitiveness of an enterprise.

Some Examples of MIS

Airline reservations (seat, booking, payment, schedules,

boarding list, special needs, etc.)

Train reservation

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Bank operations (deposit, transfer, withdrawal)

Payroll management system

Library Management System

MIS PRINCIPAL CONCERNS

Facilitate decision making by supplying the information needed in an up-to-date and

accurate form

To the people who need it

On time

In a usable form

MIS OBJECTIVES:

An effective MIS has the following objectives

1. Facilitate the decision - making process by furnishing information in the proper time frame. This

helps the decision - maker to select the best course of action.

2. Provide requisite information at each level of management to carry out their functions.

3. Help in highlighting the critical factors to the closely monitored for successful functioning of the

organization.

4. Support decision-making in both structured and unstructured problem environments.

5. Provide a system of people, computers, procedures, interactive query facilities, documents for

collecting, sorting, retrieving and transmitting information to the users.

MIS FUNCTIONS:

Any MIS performs the following functions:

Data Capturing: MIS gets / captures data from various sources in the organization or external

sources through manually or computers.

Processing: Data captured is processed to get the required information. Processing may includes

calculating, sorting, organizing, analyzing, manipulating data using different methods.

Storage: The processed / semi processed information is stored in an accurate manner to be referred

later on.

Retrieval: Information can be retrieved as and when required.

Distribution: Information is distributed in the form required.

CHARACTERISTICS OF MIS :

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The Basic characteristics of an effective Management Information System are as follows:

(1) Management-oriented: The basic objective of MIS is to provide information support to the

management in the organization for decision making. So an effective MIS should start

its journey from appraisal of management needs, mission and goal of the business

organization. It may be individual or collective goals of an organization. The MIS is suchthat it serves all the levels of management in an organization i.e. top, middle and lower

level.

(2) 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. Manager should guide the MIS professionals not only at the

stage of planning but also on development, review and implementation stages so that effective

system should be the end product of the whole exercise in making an effective MIS.

(3) Integrated: It means a comprehensive or complete view of all the sub systems in the

organization of a company. Development of information must be integrated so that all theoperational and functional information sub systems should be worked together as a single

entity. This integration is necessary because it leads to retrieval of more meaningful and useful

information.

(4) Common data flows: The integration of different sub systems will lead to a common dataflow which will further help in avoiding duplicacy and redundancy in data collection, storage and

processing. For example, the customer orders are the basis for many activities in an organization viz.

billing, sales for cashing, etc. Data is collected by a system analyst from its original source only one

time. Then he utilizes the data with minimum number of processing procedures and uses the

information for production output documents and reports in small numbers and eliminates the

undesirable data. This will lead to elimination of duplication that simplify the operations andproduce an efficient information system.

(5) 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. So the system expert has

to keep 2 things in mind one is that he has to keep future objectives as well as the firms

information well in advance and also he has to keep in mind that his MIS will not be

obsolete before it gets into action.

(6) User friendly/Flexibility: An MIS should be flexible i.e. there should be room for further

modification because the MIS takes much time in preparation and our environment is dynamic

in nature.MIS should be such that it should be used independently by the end user so that they

do not depend on the experts.

PG:220 MANAGEMENT BY EXCEPTION - JAWEDKAR

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Read following pages from your text book before pursuing further.

Pg:45-48 -ORGANIZATION AS SYSTEM - JAWEDKAR

Pg: 104 107 ORGANIZATION AND INFORMATION, MIS AND INFORMATION

CONCEPTS, MIS AS PYRAMIDAL STRUCTURE - JAWEDKARMIS has been described as a pyramidal structure, with four levels of information resources. The levels

of information would depend upon the organizational structure. The top level supports strategic

planning and policy making at the highest level of management. The second level of information

resources aid tactical planning and decision making for management control. The third level supports

day-to-day operations and control. The bottom level consists of information for transaction

processing. It then follows that since decision making is specific to hierarchical levels in an

organization, the information requirements at each level vary accordingly. REFER JAWAEDKAR

Location of MIS in the organisation

For proper discharge of functions in any org, MIS should be appropriately placed in any org.

The exact location of MIS in the org depends upon the type of business the organisation is in and how

important is the info for the organisation.

Eg in banking, transport, airlines etc. data processing and MIS are prevalent an all areas of business.

The various alternatives are-

As part of financial dept: In such type of structures the MIS dept is placed under the

authority of the finance manager/Chief finance officer. In many companies, the finance org

gained early control over computer centre. As a result, information system were conceived of

as control decision aid rather than planning decision aid.

Under the direct control of chairman/Director/Chief Executive: This is done to give more

importance to the MIS functions and get acceptance from other areas of organisation as well.

This is also done so that the accurate information can be supplied to everyone without

distortion.

MIS as a distinct entity: MIS is given a separate status or entity in the organisation as other

functional areas of the org.

(I) MIS in the Organisation Concept

For designing the MIS for the Organisation, the information needs or requirement of the diff erent

processes of the management are seen.

(1) Info needs for Planning

Planning requires analysis of external and internal info

The internal info are:

1. Policies sales disc, stock levels, employee info etc...

2. Financial plans and budgets sales budgets, capital expenditure budgets, purchasing budgets,

labour schedule atc.

3. Forecasts sales forecast, site location, machinery, infrastructure needs etc.

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4. Resources logistics, finance, labour, employees etc.

The external organizing are:

Govt regulations, economic trends, social trends, demography, technology, competitiveness etc.

(2) Info needs for organisingInfo regarding wages, salaries, staff restructuring, takeovers, mergers etc

(3) Info needs for Controlling

Monitoring quality of services and products, steady sales, good cash flows, monitoring feedback and

performance.

(4) Info needs for Directing

Keeping track of skills and performance of staff, employing better infrastructure, revamping of

resources, dept etc.

(II) MIS in the Organisation DESIGN

Various phases of designing and MIS for the org are:

Study and analysis: this phase includes duty of the org goals, analyzing resources, analyzing

the human and technological capabilities, evaluating the MIS design using cost beneficial

analysis.

Design: this phase includes the determination and evaluation of subsystems, determining the

computerization needed, creation of databases , establishing the inputs and outputs. Taking

feedback and documentation.

Implementation:

Organizing the computer infrastructure. Training the end-users

Modifying the modules based on feedback from users

Debug and test the modules

Evaluating the complete system

Documentation

Switching from the old system to new system

Evaluating periodically

Maintenance of system

Planning for the expansion of the new system.

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ADVANTAGES / IMPACT OF MIS

1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound

decision making . Due to increase in the size and complexity of organizations, managers have lost personal

contact with the scene of operations.

2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and

there by avoids the confusion which may arise when managers are flooded with detailed facts.

3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for

monitoring operations at lower levels. MIS is successfully used for measuring performance and making

necessary change in the organizational plans and procedures.

4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each department

aware of the problem and requirements of other departments. It connects all decision centers in the

organization .

5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the

ability of management to evaluate and improve performance. The used computers has increased the data

processing and storage capabilities and reduced the cost .

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information

7. MIS helps better understand the business itself as it begins with the basic definition of each and every dataentity and its attributes.

8. MIS calls for systemization of operations for an effective system design which to leads to

streamlining of operations.

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ROLE OF MIS IN AN ORGANIZATION

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 pure blood 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.

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 control, 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 them 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 theprocess of decision making. The MIS, therefore, plays a vita role in the management, administration and

operations of an organization.

LIMITATIONS OF MIS

Quality of outputs is governed by the quality of inputs and processing.

MIS mostly emphasizes on the quantitative aspects of details rather than qualitative aspects.

MIS do not have the flexibility to update itself with the changing times.

MIS can not provide sometimes the requisite information for all decisions.

It is affected by the frequent changes in the top management.

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CLASSIFICATION OF INFORMATION SYSTEMS:

An Information System model consists of the following:-

Resources such as people, data, hardware, software and networks are used by Information

Systems.

Information Processing consists of system activities of input, processing, output, storage and

control.

The majorroles of Information Systems are:-

1. Support Business Processes

2. Support Decision Making

3. Support Competitive Advantage

Types of Information Systems

1. Operations support systems produce a variety of information products for internal and

external use, which process data used by business operations. These have three further

categories:-

a. Transaction processing systems record and process data resulting from businesstransactions. Transactions are processed in two basic ways:

i. Batch, where transactions are accumulated over a period of time. A group of

entries are made at a time; which are accepted by the information system, on a

command by the user, for updating the records.

ii. Real-time or on-line, where processing is done immediately. Whenever an

activity takes place in the organization, an entry is made in the information

system in the form of a record and the computer automatically updates its all

other records affected by the entry

b. Process control system monitors and controls physical process

c. Enterprise collaboration systems enhance team and workgroup communication and

productivity and are also called office automation systems.

2. Management support Systems provide information and support for effective decision-making.

These are of following types

a. Management Information Systems provide information in the form of reports and

displays to managers and many business professionals

b. Decision support systems give direct support to managers during the decision-making

process. It provides some indications to a user on the basis of information stored in the

system and the parameters provided by the user.

c. Executive information systems provide critical information from a wide variety of

internal and external sources, in easy-to-use displays, to executives and managers.

3. Expert systems provide expert advice from operational chores like equipment diagnostics or

decisions for loan portfolio management.

4. Knowledge management systems support the creation, organization and dissemination of

business knowledge to employees and managers throughout the company.

5. Functional business systems focus on operational and managerial applications in support of

basic business functions such as accounting or marketing.

6. Strategic information systems apply IT to firms products, services, or business processes to

help it gain a strategic advantage over its competitors.

7. Cross functional Information Systems interact with several types of Information Systems that

provide a variety of functions.

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The success of an Information System is measured not only by its efficiency in terms of minimizing

costs, time and the use of information resources, but also by the effectiveness of Information

Technology in supporting an organizations business strategies, enabling its business processes,

enhancing its organizational structures and culture, and increasing the customer and business value of

the enterprise.

Information systems can be classified on the following basis as well-

1. By usage

a. Transaction processing

b. Management Information

c. Decision support

d. Expert system

2. By levels of management

a. For operational control TPS, OAS

b. For management control- MISc. For strategic control- DSS, EIS

3. By application

a. Manufacturing

b. Warehousing

c. Distribution

d. Marketing

e. Retailing

f. Services

g. Bankingh. Insurance

i. Transportation

j. Governmental

k. Defense

l. GISThe information needs are different at different organizational levels. Accordingly the information can be

categorized as: strategic information, managerial information and operational information.Strategic

information is the information needed by top most management for decision making. For example the trends

in revenues earned by the organization are required by the top management. The information systems that

provide these kinds of information are known as Decision Support Systems.The second category of

information required by the middle management is known as managerial information. The information

required at this level is used for making short term decisions and plans for the organization. Information like

sales analysis for the past quarter or yearly production details etc fall under this category. Management

information system (MIS) caters to such information needs of the organization. Due to its capabilities to

fulfill the managerial information needs of the organization, Management Information Systems have become

a necessity for all big organizations. And due to its vastness, most of the big organizations have separate MIS

departments to look into the related issues and proper functioning of the system.The third category of

information is relating to the daily or short term information needs of the organization such as attendance

records of the employees. This kind of information is required at the operational level for carrying out the

day-to-day operational activities. Due to its capabilities to provide information for processing transaction of

the organization, the information system is known as Transaction Processing System or Data Processing

System. Some examples of information provided by such systems are processing of orders, posting of entries

in bank, evaluating overdue purchaser orders etc.

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TRANSACTION PROCESSING SYSTEM:

As the name indicates, TPS records and processes data and produces reports . It represents the

automation of the fundamental , routine processing used to support business operations. It does not

provide any information for decision making purpose. These systems process transactions either in

batch processing or real time processing. Eg: Point of sale systems at many retail stores useselectronic cash register terminals to elecetronically capture and transmit sales data over

telecommunication links to head office computer center for immediate (real time ) or weekly ( batch)

processing. TPS is shown in the following diagram

INPUT OUTPUT

TPS processes business transaction of the organization. Transaction can be any activity of the

organization. Transactions differ from organization to organization. For example, take a railway

reservation system. Booking, canceling, etc are all transactions. Any query made to it is a transaction.

However, there are some transactions, which are common to almost all organizations. Like employee

new employee, maintaining their leave status, maintaining employees accounts, etc.This provides

high speed and accurate processing of record keeping of basic operational processes. These include

calculation, storage and retrieval. Transaction processing systems provide speed and accuracy, and

can be programmed to follow routines functions of the organization.

COMPONENTS OF TPS:

INPUT: Various inputs of a TPS are in the form of source documents, such as customer orders,

purchase orders, invoices, employee time cards etc. These document help TPS capture data, facilitate

operarations by communicating data and providing permanent file for future use uf documents are

retained.

PROCESSING: Processing involves the use of journals and registers to provide a chrological record

of inputs. Journals are used to record financial accounting transactions, and registers are used to

record other types ofdata not directly related to accounting.

STORAGE: The computer stores various records in files. There are several types of file which are

classified as transaction file and master file. Transaction files usually contain data that are temporary

in nature. Master file contains data that are of a more permanent nature or continuing interest.

OUTPUT: Variety of output can eb generated from a TPS which can be used for various puropses.

These outputs are in the form of documents.Some of these outputs can eb used as inputs for further

processing.

DATA PROCESSING DATA

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METHODS FOR PROCESSING TRANSACTIONS:

Real time processing:

In a real time processing, there is a continual input, process and output of data. Data has to be

processed in a small stipulated time period (real time).Each transaction in real-time processing is

unique. It is not part of a group of transactions, even though those transactions are processed in thesame manner. Transactions in real-time processing are stand-alone both in the entry to the system and

also in the handling of output.Real-time processing requires the master file to be available more often

for updating and reference than batch processing.

For example: assembly line robots , ATM transaction and radar system.

Batch Processing

In a batch processing group of transactions collected over a period of time is collected, entered,

processed and then the batch results are produced. Batch processing requires seperate programs for

input, process and output. It is an efficient way of processing high volume of data. With batch

processing, the data is organised and stored before the master file is updated. Errors can occur during

these steps. The database is not accessible all of the time for batch processing.

For example: Payroll system,billing system, Examination system and billing system.

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MANAGEMENT SUPPORT SYSTEM:

These are the information system applications that focus on providing information and decision

support for effective decision making by managers.

1) MANAGEMENT INFORMATION SYSTEM: MIS is an information system which processes

data and converts it into information. MIS uses TPS for its data inputs The informationgenerated by MIS may be used for control of operations, strategic and long range planning

,short range planning , management control and other managerial problem solving.

In contrast to TPS, MIS is more comprehensive; it encompasses processing in support of a wide range

of organizational functions and management processes. Secondly, MIS is capable of providing

analysis, planning and decision making support.

MIS is also defined as an integrated system . In business organizations, information systems are

generally developed to cater to the information needs of managers of each of the functional areas of

the business. The functional areas may be marketing, production, human resource, finance etc.There

may be a common structure useful to each of these business functions. Integration of the information

may be:

Hierarchical Operational level systems feed data to a higher level system.

Horizonatal - Integration of information systems within a functional area or a chain of

command . Eg: Production department may several processes in which information will be

passed form one process to another process.

Cross functional Associated with different functional areas. Eg: Production department

sending information sales department.

FEATURES AND COMPONENTS OF MIS HAS BEEN DISCUSSED ABOVE.

DECISION SUPPORT SYSTEM

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A DSS is an information system application that assists decision making. DSS tends to be used in

planning, analysing alternatives and trial and error search for solutions.Such systems are generally

operated through terminal based interactive disalouges with users. They incorporate a variety of

decision models and thus are capable of performing what if analysis for managers. Each DSS is

different from the other infromation system and is tailor made for every manager. A DSS is tailored to

a specific managerial task or special problem , its use is limited to that task or problem. DSS tend tobe designed to serve management control level and strategic planning level managers. The elements

of a DSS include a database , model base and a software providing interactive dialouge facility for

the manager.

DSS has three major components:

Database / Knowledge base: Combination of internal corporate files and data from external sources.

A DSS does not create or update data as this is not its function; rather it uses live organisational data

so that individuals and groups are able to make decisions based on actual conditions.While controlling

and processing data from the database , the DSS protects the integrity of data.

Model Base : A model base is a collection of mathematical and analytical models that can be madeaccessible to the DSS users. The model base, contains one or more models for the kind of analysis the

system will perform. For example, if the purpose of the system is to supply sales projections under

different conditions, one model might be a linear regression formula derived from past sales and other

factors., Analysing demand by industry.

User interface: User can communicate with DSS via terminal hooked up to the mainframe

computers either directly or indirectly . The user interface integrates the two into a coherent system

and provides the decision maker with controls forand possibly feedback aboutmanaging the data

and the models.

USER

DATABASE

USER

INTERFACE

MODEL

BASE

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DSS goes one step further to MIS and it uses MIS to take some relevant information.

a1

a2

a3

DSS can be diffierentiated from MIS in terms of its processing capabilities. Whereas MIS processes

data to convert it into information; DSS processes information to support the decision making process

of a manager. MIS will provide relevant infromation on the basis of which decisions can be taken but

DSS will help user do what-if analysis and decide on which decision is to be taken. DS provides an

interactive dialouge which the user can interact with the system to add/alter the data as per his/her

requirements whereas in MIS, user can not interact with the system.

EXPERT SYSTEM:

Information from

MIS

Decision ( most appropiate

alternative)

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Business expert system which are based on artificial intelligence , are advanced infromation systems.

AI may be reffered to as the capability that makes computer display intelligent, human like

behavior.For example, reasoning , drawing inferences , learning and problem solving are such acts of

intelligence.

A Expert system is a knowledge based information system that uses its knowledge about a scpecific ,

complex application area to act as an expert .Thus , expert systems provide deicison support to

managers in the form of advice from an expert ina specific problem area. Expert systems findapplication in diverse areas , ranging from medical, engineering and business.

The main advantages of using expert systems may be outlined as follows:

1) The knowledge of many experts can be used to build a single expert system.

2) Decision - making in critical times can be more relaible , as these systems are not affected by

emotional factors or fatigue.

3) Multiple hypotheses can be considered simultaneously.

The expert system is interactive in nature , which enables it to ask questions f the user. On the basis of

these questions , an expert system searches its knowledge base for facts and rules , explains itsreasoning process when asked and comes out with expert advice to te end user in the subject area

being explored.

The main component of expert system includes:

Knowledge base: contains facts about the specific expert area and heuristic that describe the reasoning

procedures of an expert on the subject. It contains various rules that are applied in arriving at

solutions. A rule specifies -'IF -Then-' PROPOSITION depending upon the nature of the problem.

Inference engine : contains the logic of reaching an inference from the stored data and rules.It

performs reasoning work by using the contents of knowledge base in a particular sequence. It

examines the rules of knowledge base one at a time and if a rule's condition is true , the specified

action is taken.

User interface: User interface enables the user to enter the instruction/ information in the system and

to get solutions/ explanations fromt he system.

Executive information system

An Executive Information System (EIS) is a type ofmanagement information system intended to

facilitate and support the information and decision-making needs of senior executives by providingeasy access to both internal and external information relevant to meeting the strategic goals of the

Rules,facts Logic

User interface

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organization. It is commonly considered as a specialized form of a Decision Support System (DSS)

The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer strong

reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level

executives analyze, compare, and highlight trends in important variables so that they can monitor

performance and identify opportunities and problems.

An EIS is an information system at the strategic level of an organisation designed to addressunstructured decision making through advanced graphics and communications.

Features:

1) EIS are relevant to top management of an organisation, the level at which strategic decisions

affecting the organisation are made.

2) EIS cut accross the functional areas. These system may derive daa from different functional

areas but the decisions are made for the organisation as a whole.

3) EIS combines both internal and external information. While external information is related to

customers, suppliers, competitors, government policies, internal information is related to the

working of the entire organization.4) The information generated by EIS is in the form of summary, reports opr graphics.

Component of executive information system

Like any other information system, EIS have the same component users, database,software, and

output. However, the nature of all these components is different because of different requirements of

EIS ..figure shows the components of an Eis.

Thus, the major components of an executive information system are executive and his staff,database,

and output.

Query

Data mining

Executive

An executive is the end user of output derived from EIS .through executivesmay retrieve desiredinformation and on there own specially database contain taiolered info..most of the executive

preferred to get this job done by there staff either bcoz they are busy in there work or they do not

prefer to work on computer .

Database

Database for EIS is both comprehensive as well as specific it is comprehensive in the sense that EIS

require data about functioning of the entire organization besides data about environmental factors

custumers,suppliers , competitors, govt policies toward business and technological development. Data

for EIS is specific because relevant data for EIS must must be stored in concise from an easy retrival

and protecting, them from unauthorized access bcoz a significant portion of data may be sensitive

and need confidently. Database for EIS may be categorized as data warehouse and datamart.

Executive EIS Software

Database-

Datwarehouse

Datamart

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---> Datawarehouse

A data warehouse is a collection of current and historical operational data stored for use in EIS

.bisides operational data ,stored from various departnentof an org, relevant environmental data are

also stored. The data are usally extracted from a number of sources and collected, integrated and

storedin a relational database for quick and easy access without affecting the data of the underline

traction processing system.the data in the warehouse may be update daily,weekly , biweekly or

monthly,depending on the type of data and the need of the user.

---->Datamart

A data mart is usallty a customized database as per the requirmentof a specifis type of users. Datamart

are created generally from a data warehouse which contain data to be used for a variety of purposes

and by variety of users.for creating a datamart, relvant data are extracted fropm data warehouses and

are earmarked for specific users . EIS datamart contain those data which are relevant for executives

for strategic management that involves strategic planningand strategic control.

Datamining is an activity which involves finding relevant data from the data warehouse . it just like

normal mining activity in which minerals are extracted from mine.data mining attempts to discovervarious pattrren which are followed by available data automatically.

EIS software

EIS software is dedicated from that is used for data manipulation from database. EIS software falls in

three catogries ie. Personal productivity ,prewritten EIS software, customised software

Personal productivity software

It is generally purpose software that any one can use to develop his own application.many of software

system relevant for DSS. Such as spead sheet,analysis package ,model generator e.t.c, can be used for

EIS to through the orientation is differ .while for DSS such tools are used primarily for modlling and

analysis in a fairly narrow range of decision situations.

Prewritten EIS software

It is specially designed to meet the information needs of executives. Such a software generally

provides compression and drill down facility . Some software developers have developed prewritten

EIS software which contains external information in the form of industry trends , competition analysis

etc.

Customised EIS: If an organisation does not want to use prewritten sofwtare, it can develop EIS

software on its own according to its specific requirement. Such a software is more useful than other

availble alternatives.

EIS output: EIS output may be in the forms of reports and graphics. These may be either through

hard copy or screen display. EIS report is brief and without much technical jargons.

GROWTH AND DEVELOPMENT OF MIS

NOLAN'S GROWTH MODEL FOR MIS:

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It is pertinent to realise the importance of growth of MIS in stages in order to encounter increasingcomplexities of business processes and changing scenario of management. Nolan Stage Model is

based on fact that any organisation will move through stages of maturity. The Nolan stage model has

identified four stages of information system growth.

There are six stages in the growth of MIS according to NOLAN's model.

1) Initiation The first growth stage is known as initiation stage. In this stage, there is Initial

introduction of computers to the organisation. A few applications in the organization are

computerized. There are only a small number of users.This type of systems have rudimentary

technology to handle clerical and supervisory operationsin the organisation.

2) Contagion/Contagious: The advantages of computerisation are gradually realised by most ofthe people in an organisation . This leads to proliferation of computer , networking

technologies and computer based system applications within an organisation.During this stage

rapid and uncontrolled growth in the number and variety of IT applications takes place. Many

users adopt computers in solving their IT-related problems

3) Planning and control: As demand for computerisation increases, a need is realised for cost

benefit analysis. In this stage, organisations gain control over the technology's resources by

implementing formal control processes and standards. Thus, organisations are able to apply

cost-effectiveness criteria.This is imperative to plan for future MIS in cosr effective manner

However, controls sometimes become barriers in attaining potential benefits.

4) Integration of subsytems: In this stage, the use of new technology increases rapidly, providingnew benefits. Much emphasis is laid on integrating the applications.This comes with

realisation of inter dependence of inflow of data from various sources for valid information.

Management leverage existing subsystems to a unified system. Objective is to obliterate data

redundancy and facilitate communication of information amongst various department.

5) Data administration: Here impetus is on regulating data for company wide communication

.Database capibility is exploited as users understand the value of inofmration and are willing

to share it. In this stage, controls are further lowered to encourage development of systems

which contribute to strategic advantage of the organization

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6) Maturity: In the enhanced growth model, this stage is termed as the maturity stage. This stage

indicates that the application portfolio is complete and matches the objectives of the

organization. Now organisation is geared up to plan future MIS needs for an organisation. The

feedback from users of exissting MIS is also taken into account.

RECENT DEVELOPMENT IN FIELD OF MIS

(1) OBJECT ORIENTED SYSTEM ANALYSIS AND DESIGN

The latest development on systems analysis and design is marked with the evolution of the concepts

of object oriented systems. The growth of object orientation in system design and development can

primarily be attributed to popularity of GUI (Graphical User Interface) and Windows based systems

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which have become norms of all type of computer application in recent times. The sophistication of

the features in applications such as GUI has lead to object oriented approach whose distinction lies in

creating reusable codes

In simple terms, objects are the elements through which we perceive the real world. Object has

characteristics of identity, behavior and state with reference to the stage of its functions. Class of

objects identifies the typical objects of the same types. Typical objects are part of applications such asbanks, customers, shops, automobiles etc. or abstract coding tools such as data structures, stacks,

queues etc. which are used to develop and implement the applications. The key features of object

oriented approach are abstraction, encapsulation, inheritance and polymorphism.

Inheritance is a process in which a class inherits all the state and behavior of another class. this type

of relationship is called child-Parent or is-a relationship. "Subclasses" are more specialized versions

of a class, which inherit attributes and behaviors from their parent classes, and can introduce their

own.

Abstraction is simplifying complex reality by modeling classes appropriate to the problem, and

working at the most appropriate level of inheritance for a given aspect of the problem.

For example, Lassie the Dog may be treated as a Dog much of the time, a Collie when

necessary to access Collie-specific attributes or behaviors, and as an Animal (perhaps the parent

class ofDog) when counting Timmy's pets.

Encapsulation conceals the functional details of a class from objects that send messages to it.

For example, the Dog class has a bark() method variable,data. The code for the bark() method

defines exactly how a bark happens (e.g., by inhale() and then exhale(), at a particular pitch

and volume)

Polymorphism allows the programmer to treat derived class members just like their parent class's

members. More precisely, Polymorphism in object-oriented programming is the ability of objects

belonging to differentdata types to respond to calls ofmethodsof the same name, each one according

to an appropriate type-specific behavior.

Object oriented approach perceives the analysis and design as a unified single process where the

development stages progressively expand upon singular model of a system, whereas in contrast

traditional approach of analysis and design use different models at different stages of development. In

object oriented analysis a singular model of problem is created by identifying objects and classes (by

extension) existing in problem domain.

(2) TQM:Total Quality Management (TQM) is an approach that seeks to improve quality andperformance which will meet or exceed customer expectations. This can be achieved by

integrating all quality-related functions and processes throughout the company. TQM looks atthe overall quality measures used by a company including managing quality design and

development, quality control and maintenance, quality improvement, and quality assurance .Anumber of key principles can be identified in defining TQM, including:

Executive Management Top management should act as the main driver for TQM and create an

environment that ensures its success.

Training Employees should receive regular training on the methods and concepts of quality.

Customer Focus Improvements in quality should improve customer satisfaction.

Decision Making Quality decisions should be made based on measurements.

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Methodology and Tools Use of appropriate methodology and tools ensures that non-

conformances are identified, measured and responded to consistently.

Continuous Improvement Companies should continuously work towards improving

manufacturing and quality procedures.

Company Culture The culture of the company should aim at developing employees ability to

work together to improve quality.

Employee Involvement Employees should be encouraged to be pro-active in identifying andaddressing quality related problems.

(3) Manufacturing Execution Systems (MES) are information technology systems thatmanage production in factories. The scope of such systems is somewhat imprecise, but

typically includes:

presentation of schedules (often derived from ERP orAdvanced Planning & Scheduling

systems) to workcentres

collection of production information (time, quantity, quality,...)

analysis of production information (e.g. "How many units of this product did this workcentre

produce last month?") control of planned and unplanned maintenance (although the planning of this is often relegated

to other, special-purpose, systems)

quality control

shipping / dispatch

product labelling

product traceability (particularly important in safety-critical applications, e.g.

pharmaceuticals)

Manufacturing execution systems typically do not encompass process control, i.e. the real-time

control of machinery, but there may be an overlap.

(4) Statistical process control (SPC) is the application of statistical methods to themonitoring and control of a process to ensure that it operates at its full potential to produce

conforming product. Under SPC, a process behaves predictably to produce as much

conforming product as possible with the least possible waste. While SPC has been applied

most frequently to controlling manufacturing lines, it applies equally well to any process with

a measurable output. Key tools in SPC are control charts, a focus on continuous improvement

and designed experiments.

Much of the power of SPC lies in the ability to examine a process and the sources of variation in that

process using tools that give weight to objective analysis over subjective opinions and that allow the

strength of each source to be determined numerically. Variations in the process that may affect the

quality of the end product or service can be detected and corrected, thus reducing waste as well as the

likelihood that problems will be passed on to the customer. With its emphasis on early detection and

prevention of problems, SPC has a distinct advantage over other quality methods, such as inspection,

that apply resources to detecting and correcting problems after they have occurred.

(5) BPR: BPR is a strategic decision to redesign the way the business is managed . The

importance of a buzzword BPR has emerged because the competitve pressure to meet

customer's expectations is radically evolving at such a fast pace that even a continuous

improvement of products and services through quality control technqiues is not sufficent to

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survive in the golbal market place and need for transformation of management process is

ordained. BPR covers 3 fundamental approaches namely process improvement, process

redesign and process reengineering.

Key principles in BPR:

1) customer driven

2) conceptually strategic

3) concentrating on key business processes

4) senior executive involvement

5) eliminating non value added processes

6) communication of clear vision.

MIS BASICSA management information system (MIS) is a system or process that provides the information

necessary to manage an organization effectively. MIS and the information it generates are generally

considered essential components of prudent and reasonable business decisions.

MIS is viewed and used at many levels by management. It should be supportive of the institution's

longer term strategic goals and objectives. To the other extreme it is also those everyday financial

accounting systems that are used to ensure basic control is maintained over financial recordkeeping

activities.

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Financial accounting systems and subsystems are just one type of institutional MIS. Financial

accounting systems are an important functional element or part of the total MIS structure. However,

they are more narrowly focused on the internal balancing of an institution's books to the general

ledger and other financial accounting subsystems. For example, accrual adjustments, reconciling and

correcting entries used to reconcile the financial systems to the general ledger are not always

immediately entered into other MIS systems. Accordingly, although MIS and accounting

reconcilement totals for related listings and activities should be similar, they may not necessarilybalance. An institution's MIS should be designed to achieve the following goals:

Enhance communication among employees.

Deliver complex material throughout the institution.

Provide an objective system for recording and aggregating information.

Reduce expenses related to labor-intensive manual activities.

Support the organization's strategic goals and direction.

Because MIS supplies decision makers with facts, it supports and enhances the overall decisionmaking process. MIS also enhances job performance throughout an institution. At the most senior

levels, it provides the data and information to help the board and management make strategic

decisions. At other levels, MIS provides the means through which the institution's activities

are monitored and information is distributed to management, employees, and customers.

Effective MIS should ensure the appropriate presentation formats and time frames required by

operations and senior management are met. MIS can be maintained and developed by either manual

or automated systems or a combination of both. It should always be sufficient to meet an institution's

unique business goals and objectives.

IMPORTANT QUESTIONS

1. Define MIS and explain its main characteristics.

2. What do you understand by DSS, explain with a diagram and example?

3. What is the role of MIS in the organisation? Give 3 reasons for using computers for MIS.

4."Lack of integration between organisation systems and MIS leads to disastrous results". Explain.

5. Explain Nolan's stage growth model for MIS.

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6. Describe the following:-

a) Components of EIS

b) Expert system

c) DSS vs TPS

d) Transaction processing system

e) Data vs Information with an example

7.'One persons data is another person's information'. Explain his statement with example.

8. Discuss the relationship between TPS, MIS and DSS.

9. How does MIS system support management by exception?

10. Explain how different information systems support different management levels in an

organization.