Management Information System (MIS)

Unit-1-Understanding MIS Introduction to Management information systems It is well known fact that organizations grow in level and also in their complexity of functioning. Tremendous amount of information is generated ever year, most of it goes into the archives without any reference to it the future. Also information which is needed by the organization for different applications is not possible to be made available at the right time at the right level. MIS is considered as one such method of generating information which is used by management of organization for decision making , control of activities, operations etc. Learning Objective 1 : Understand The Basics Of MIS And The Impact Of MIS On Business And The Phases Of Development Of MIS Brief about MIS origin During the period of pre-industrial revolution most of the data processing was done manually. It was after the industrial revolution that the computers slowly started replacing manual labour. The modern digital computer was basically designed to handle scientific calculations. During the period 1940 to 1960 computers were commercially used for census and payroll work. This involved large amount of data and its processing. Since then the commercial application exceeded the scientific applications for which the computer were mainly intended for. MIS is an Information system which helps in providing the management of an organization with information which is used by management for decision making. Impact of MIS MIS has a major impact on the functions of any organization. The organization derives benefits from the systems in the following form: a) speedy access to information, b) interpretation of data, c) quick decisions, d) speedy actions, e) increased productivity and thereby increase in the profit f)reduced transaction cost The usage of Electronic media for data storage and processing the data is an integral part of MIS. The texts and images in electronic forms are effective in
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communicating ideas from source to destination. It is technology driven in the sense it revolves around wireless electronic gadgets, internet, money cards credit cards , debit cards, id cards, ATM cards etc. MIS is very significant in modern day education system where we come across usage of LCD s, Smart boards, internet etc in class rooms. In the tourism MIS has led to radical changes in booking system, tourist information system, hotel facilities, accommodation facilities, transportation modes available, images of the facilities that could be provided etc.

Transformation stage - manual systems to automated systems The manual system which was prevalent in the organizations before industrial revolution was slowly transformed into digital form by means of computer and related electronic instruments. A transformation had to necessarily go through the following stagesa) appraisal of the procedures b) types of documents c) storage systems d) formulations and coding e) verification and validation f) review g) documentation Learning Objective 2 : Understand The Role And Significance Of MIS In Business, Types And Its Classification
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Role and importance MIS characteristics

In any organization managers will have varieties of tasks to manage. MIS is mainly designed to take care of the needs of the managers in the organization.

Organizations will have different departments like marketing, production, sales, inventory, maintenance etc. Each of these departments function individually and also in relationship with other departments. Information is available in abundance. MIS aids in integrating the information generated by various departments of the organization.

MIS helps in identifying a proper mechanism of storage of data. The data is maintained in such a way that the unnecessary duplication of data is avoided.

MIS also helps in establishing mechanism to eliminate redundancies in data. MIS as a system can be broken down into sub systems. Each such sub system may be programmed. This results in easy access of data, accuracy of data and information. It helps in maintaining the consistency of data.

Function of MIS The main function of MIS is to help the managers and the executives in the organization in decision-making.

Large quantities of data like customers information, competitors information, personnel records, sales data, accounting data etc is collected from internal sources like the company records and external sources like annual reports and publications.

The collected data is organized in the form of a database. The data from the database is processed and analyzed by using different tools and techniques.
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The result of the analysis is properly presented to the managers to help them in decision-making.

Necessity of MIS Managers play a key role in any organization. They are responsible for taking decisions appropriate to the need of the market. Information system has become the main tool used by managers in decision making. Managers perceive information as the driving force to achieve success in any business. Hence there is a need for MIS. Roles of IS in Business (Source : Management Information Systems James A O'Brien , George M Marakas - seventh edition Tata Mc Graw Hill) There are three fundamental reasons for all business applications of information technology. They are found in the three vital roles that information systems can perform for a business enterprise. a) Support of its business processes and operations As a consumer, you regularly encounter information systems that support the business process and most retail stores where you shop. For example, most retail stores now use computer based information systems to help them record customer purchases, keep track of inventory, pay employees, buy new merchandise and evaluate sales trends. Store operations would grind to a halt without the support of such information systems.
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b) Support of decision making by its employees and managers Information systems also help store managers and other business professionals make better decisions. For example, decisions on what lines of merchandise need to be added or discontinued, or on what kind of investment they require, are typically made after an analysis provided by computer-based information systems. This not only supports the grain an advantage over other retailers in the competition for customers. c) Support of its strategies for competitive advantage-Gaining a strategic advantage over competitors requires innovative application of information technologies. For example, store management might make a decision to install touch-screen kiosks in all of their stores, with links to their e-commerce web-site for online shopping. This might attract new customers and build customer loyalty because of strategic information systems can help provide products and services that give a business a comparative advantage over its competitors. The major roles of the business applications of a Management Information System may be represented in the pyramid form as shown below. The apex of pyramid represent the Top Level Management and the base of the pyramid represent the Bottom Level Management. The intermediate layer is the Middle Level Management.

Major Roles Of The Business Applications Of IS The business applications of information systems have expanded significantly over the years. The following figure summarizes these changes.

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Types of MIS Classification: MIS is classified into various types. The classification depends on the following aspects a) Functionality b) Utility c) Area of application d) Processing type e) Frequency of usage

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Various management activities like the one which deals with scheduling, planning, resource allocation, product design, processes, competitive strategy is the functional classification of MIS. Some of the processes like artificial intelligence, generating management related information, providing aid in decision making, necessary support systems, executive information system is the utility classification of MIS. Depending upon the area where MIS could be used MIS is classified as Banking IS, Insurance IS, Production IS, Data warehouse IS, Public IS etc. Depending upon the type of management service in processing a data to generate information, MIS is classified into various processing types like Online transactions, Batch processing, distributed processing, multi-processing etc. A MIS system is a system in which there is a constant need for review of the system. A mechanism can be built in the system to look into its performance and the outcome of such performed tasks may be assessed. This may be done periodically at fixed interval of time. Such mechanisms are categorized under MIS classification of frequency. Relationships Though different types of IS exists in any organization, they are related to each other directly or indirectly. The information generated in one department may be used by another department to generate further information to be used by other departments and so on. Thus there exists a relationships between various types of IS being used in any organization. Learning Objective 3 : Understand The Managers View Of The Information System And Manager's view of information systems Types of IS There are six major types of information systems.

Transaction processing systems (TPS) - A transaction processing system (TPS) helps in conducting the daily routine activities like sales order entry, airline reservations, payroll etc.

Office systems Some of the tasks involved in the administration of an office are storage of data, manipulation of data, documentation, communication etc. To increase the efficiency of these activities various word processors, image processors, telecommunications systems, networks are adopted. This constitutes the offices systems.
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Knowledge Based Systems (KBS) KBS is a system that represents knowledge. Abundant information is available today. This information is representative of various facts and figures. These constitute knowledge base. The system adopted is capable of quick data acquisition and interpretation of the data which is necessary in decision making. This system is used as an expert to give expert advice on various subject matters and at time as a consultant. Such a system is known as knowledge based system. Decision-support system (DSS) - Managers are usually faced with challenges which are unstructured. The problems they face are normally under situations involving uncertainties and risks. Decision making becomes very difficult under such situations. A system which provides solutions to such problems is known as decision support system (DSS). Management Reporting Systems (MRS) - Management reporting system (MRS) helps the management in decision-making by providing them with reports and different statistical tools.

Executive support systems- Executive support systems helps the senior executives in the organization in decision making through advanced graphics and communication.

View of Structure Different kinds of information systems serve different levels in an organization. Each level of system and its sub system is viewed differently depending upon the following levels of classification. Operationallevel systems help the managers in keeping track of the daily routine activities. For example, recording daily sales and placing orders. Knowledge-level systems form the workstations and office systems in an organization which help in including the latest technology in the working of the organization. For example, preparing displays for advertisements.

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Management-level systems help in administrative activities and decisionmaking of the managers. For example, the monthly sales figures by territory. Strategic-level systems help the senior executives of the organization in addressing issues like planning and decision-making. For example, predicting the profit trend for the next 5 years.Learning Objective 4 : Understand The Hardware Support Needed Types of Computers used by organization in setting up MIS Computers are electronic devices used for processing data. It helps is generating the desired information output based on certain input data. The outputs are used for various decision making. There are various types of computers that may be used by an organization for effectively implementing MIS. Some of the types commonly used in business are desktop computer, notebook computer, PDA etc. Desktop Personal Computer These are systems which are kept on top of desks in various offices, residences, class rooms, departmental store, showrooms etc. Desktop personal computer are meant to be operated by a person sitting in front of the computer. Notebook computers These are smaller in size as compared to desk top computers. The screen size is approximately 11"x8". It is possible for a person to carry it in a bag. It is similar to the size of a note book, hence the name notebook computer. It is operated sometime by placing it on the lap of a person, hence it is also know as lap top computer. It is very convenient to use it for day to day applications when mobile. PDA These are small hand held devices known as personal digital assistant. It is possible to carry a PDA in pockets, hence is very convenient to use. It has simple applications like taking notes, phone, calendar, camera, etc. One can even have internet access on a PDA thus bringing the information of the entire world wide web on hand. Hardware support for MIS Generally hardware in the form of personal computers and peripherals like printers, fax machines, copier, scanners etc are used in organization to support various MIS activities of the organization. Advantages of a PC : Advantages a personal computer offers are a) Speed A PC can process data at a very high speed. It can process millions of instructions within fraction of seconds. b) Storage A PC can store large quantity of data in a small space. It eliminates the need of storing the conventional office flat files and box files which requires Page 9 of 11

lots of space. The storage system in a PC is such that the information can be transferred from place to another place in electronic form. c) Communication A PC on the network can offer great support as a communicator in communicating information in the forms of text and images. Today a PC with internet is used as a powerful tool of communication for every business activity. d) Accuracy A PC is highly reliable in the sense that it could be used to perform calculations continuously for hours with a great degree of accuracy. It is possible to obtain mathematical results correct up to a great degree of accuracy. e) Conferencing A PC with internet offers facility of video conferencing world wide. Business people across the globe travel a lot to meet their business partner, colleagues, customers etc to discuss about business activities. By video conferencing inconvenience of traveling can be avoided. A block diagram of a computer may be represented as -

Input unit is used to give input to the processor. Examples of input unit Keyboard, scanner, mouse, bar code reader etc. A processor refers to unit which processes the input received the way it has been instructed. In a computer the processor is the CPU Central Processing Unit. It does all mathematical calculations, logical tasks, storing details in the memory etc. Output unit is used to give output s from the computer. Example of output units are Monitor, printer, speakers, etc. Classification of computers: Computers are classified as follows a) Depending upon the processor used ex: Intel PI, PII, PIII, PIV, AMD, Celerons etc. b) Depending upon the purpose for which it is used a Computer may be a general purpose computer or a specific purpose computer. General purpose computers are the ones used for general tasks like business analysis, letter
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typing, generating reports for management decisions, scheduling activities, preparing balance sheets, invoice etc, Specific purpose computers are custom build for specific tasks like space research, weather forecasting, satellite sensing etc. Specific purpose computers are designed to perform tasks for which they are intended for and for no other applications. c) Depending upon the size: A computer may be classified based upon its size and voluminous computing speed as micro computers, mini computers, main frames and super computers. Super computer is the largest in size and also fastest in computing speed. Summary After going through this unit you would have learnt the fundamentals of MIS. The role and significance of MIS in business and its classification is explained. Also students would understand the impact of MIS on business and the various phases of a business. It is possible to understand the various phases of development in MIS based on the type of system required in any organization. You would also learn about the various types of computers used in MIS and the different types of input and output device

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