MIS

MIS

Manageme
nt
Informatio
n System
Only for reference

Raja Sekar

MIS

Management Information System

UNIT 1

Management Information System:Management Information System is an acronym of these words

Management
Information
System

Management: Management is the art of getting things to be done through and

with the people in formally organized groups
(Koontz 1973)
The basic functions which a manager performs in an organization

Planning: Planning is a process of foreseeing the future in advance. It bridges

a gap between where we are and where we want to be. Planning should answer the
following questions 1. What to do? 2. When to do? 3. Who is to do? 4. How is it to be
done? 5. Where is it to be done?

Organization:

Organization is the process of identifying the entire job,

dividing the job into convenient subjects/task allocating sub-jobs to persons or
group.

Staffing: Staffing is the process of putting the right person at the right job.
Directing: The function of directing has been identified with command
(Henri Fayol) Acc. To modern Management Philosophers 1. Communication 2.
Motivation 3. Leadership Direction is important in order to achieve pre-determined
goods and objectives

Controlling:

Controlling and planning are the two sides of the same coin.
Controlling ensures that activities are being performed as per plans. Controlling is a
process which includes

Fixing standards for measuring work performance

Measurement of actual performance
Comparing actual with standards and finding out deviation if any, and
Taking corrective action

Information:

Information, the second component in the term Management

Information System, is considered as a valuable resource by the management in order to
run a business organization. Information is data that is processed and in presented in a
form which assists decision-makers. It may contain an element of surprise, reduced
uncertainty or provoke a manager to initiate an action. Data usually take the form of
historical records. In contrast to information, raw data may not be able to surprise us, may
not be organized and may not add anything to our knowledge. The relation of data to
information is that of raw material to finished product, as depicted in the following
diagram.

DATA
DATA

PROCESSI
INFORMATI
PROCESSI
INFORMATI
NG
ON
Sometime the information of today may
not be information after
a certain period of time.
NG
ON
Because of this relationship between data and information, the two terms are8 often used
interchangeably.
G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Information is a necessary and vital input in any decision-making process in an

organization. However, it is not available in a ready form. Information reduces uncertainty
and triggers action.

System:

The system is the most loosely held term in management literature

because of its use in different contexts. However, a system may be defined as a set of
elements which are joined together to achieve a common objective. The elements are
interrelated and interdependent. The set of elements for a system may be understood as
Input, Process and Output. A system has one or multiple input(s); these inputs are
processed through a transformation process to convert these input(s) into output(s).

INPUT
INPUT

PROCESS
PROCESS

Management Information System:

OUTPU
OUTPU
TT

MIS is a system consisting of people, machines, procedures, database and data

models as its elements for capturing data, processing and retrieving data according to
manager requirements for decision support system.
D.P. Goyal
OR
Management Information System
An integrated user machine system
For providing information,
To support the operations, management analysis and decision making.
The system utilizes
Computer hardware and software
Manual Procedures
Models for analysis, planning, controlling and decision-making and
A Database
Gordon B. Davis
OR
The typical MIS is based on four major components

Data Gathering: To collect data from different sources

Data Entry: Data is inputted and stored in databases as information
Data Transformation: Modifying the information into required format
Information Utilization: To disseminate the data to different levels of management
with in the organization, for decision making.

Management Information System Characteristics:

System Approach:

The information system follows a system approach.

The systems approach implies a holistic to the study of the system and its
performance in the light of the objective for which it has been constituted. This
approach is anti-piecemeal in nature. In other words, systems approach, in the
sense intended here, means taking a comprehensive view or a complete look at the
interlocking sub-system that operate with in an organization.
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Management Information System

Management Oriented: This is an important characteristic of MIS. For

designing of MIS, top-down approach / bottom-up approach should be followed. Topdown approach suggests that the system development starts from the
determination of management needs and over all business objectives and viseversa

Need based: MIS design and development should be as per the information

needs of managers at different levels, viz., strategic planning level, management

control level and operational control level. In other words, MIS should cater to the
specific needs of managers in an organizations hierarchy.

Exception Based:

MIS should be developed on the exception-based

reporting principle, which means an abnormal situation i.e. the maximum, minimum
or excepted values vary beyond tolerance limits. In such situations, there should be
exception reporting to the decision-makers at the required level.

Future Oriented: Besides exception-based reporting, MIS should also look

at the future. In other words, MIS should not merely provide past or historical.
Information; rather it should provide information, on the basis of projections based
on which actions may be initiated.

Integrated:

Integration is necessary characteristic of a MIS. Integration is

significant because of its ability to produce more meaningful information.
Integration in the sense intended here, means taking a comprehensive view or
looking at the complete picture of the interlocking sub-system that operate within
the company. One can start developing an MIS by attacking a specific sub-system,
but unless its place in the total system is realized and properly reflected, serious
shortcomings may result. Thus an integrated system that blends information from
several operational areas is a necessary characteristic of an MIS.

Common Data Flow: Because of integration concept of MIS, there is an

opportunity to avoid duplication and redundancy in data gathering, storing and

dissemination. System designers are aware that a few key source document
account foe much of the information flow. The common data flow concept support
several of the basic tenets of the system analysis. These include avoiding
duplication, combining similar functions and simplifying operations wherever
possible. The development of common data, flow is an economically sound and
logical concept, but it must be viewed in a practical light.

Long-Term Planning: MIS is developed over relatively long periods. Such

systems do not develop overnight. A heavy element of planning is involved. The
MIS designer must have the future objectives and needs of the company in mind.
The designer must avoid the possibility of the system going obsolete before its
time.

Sub-System Concept:

The process of MIS development is quite

complex and one is likely insight frequently. Thus the system, through viewed as a
single entity, must be broken into digestible sub-systems which are more
meaningful at the planning stage

Central Database: A Central database is the mortar that holds functional

system together. Each system requires access to the master file of data covering
inventory, vendors. Personnel, customers etc.

Management
Functions:

Information

G. Raja Sekar (9700779756, 9966556665, 9700076336)

System
8

Management Information System

MIS is set up by an organization with the prime objective management information

to be used by its managers in decision-making. Thus, MIS must perform the following
functions in order to meet its objectives.
Sourc
e

Sourc
e

Use
r

Data
Data
capture
capture

Sourc
e

Sourc
e

Processi
Processi
ng
ng

Use
r

Dissemina
Dissemina
tion
tion
Use
r

Sourc
e

Use
r

Retrieva
Retrieva
ll
Data Capture: MIS capture data from various internal and external sources
of an organization. Data capture may
be manual
Storage
of or through computer terminals.
End users typically record data aboutStorage
transactionsof
on some physical medium, such
Data
as a paper from, or enter it directly into a computer.
Data
Processing of Data: The captured data is processed to convert it into
the required management information. Processing of data is done by such activities
as calculating, comparing, sorting, classifying and summarizing. These activities
organize, analyze and manipulate data using various statistical, mathematical,
operations research and / or other business models.

Storage of Information: MIS stores processed or unprocessed data for

future use. If any information is not immediately required, it is saved as an
organizational record. In this activity, data and information are retained in an
organized manner for later use. Stored data is commonly organized into fields,
record, files and database.

Retrieval of Information: MIS retrieves information from its stores as

when required by various users. As per the requirements of management users, the
retrieved information is either disseminated as such or it is processed again to
meet t he exact Management information demand.

Dissemination of Information:

Information, which is a finished

product of MIS, is disseminated to the users in the organization. It could be periodic,
through reports or online through computer terminals

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G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Approaches to Information system

Technical Approach: It is a model to study information systems, as well as
the physical technology and formal capabilities of these systems

Computer Science:

It concerned with establishing theories of

computability, methods of computation and methods of efficient data storage and
access.

Management Science: For Development of models for decision making

and management practices.

Operations Research:

Focuses on mathematical techniques for

optimizing selected parameters of organization, such as transportation, inventory
control, etc.

Behavioral Approach:

Concerned issues such as strategic business,

Integration, Design, Implementation, Utilization and management cant explored usefully
with the models used in technical approach.

Sociologists Study:

How groups and organization shape the

development of system and also how system affects individuals groups and
organizations.

Psychologists Study:

8
How the top managers Or decision
makers
perceive and use formal information
G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Economical Study: Have control and cost structure with in the firm and
with in markets. It focuses on changes in attributes of management and
organizational policy and behavior.
Computer
: Optimizing both the social and
Science
technical system used in production.

Socio-Technical Approach system

Management
Science

MI
S

Psychology
Study

Operations
Research

Sociologists
Study

Economists
Study

Structure of MIS:
MIS structure may be described by following a variety of approaches

Physical Components:

Hardware, Software, Databases, procedures,

Input and Output

Information System Processing Functions:

a.
b.
c.
d.
e.

To
To
To
To
To

process transactions
maintain Master files
produce Reports
process enquiries
process Interactive Support Applications

Decision Support
Levels of Management Activities

a. Strategic Planning: long range consideration, business directions, Market

Strategy, Product Mix, etc.
b. Management Control Level: Acquisition, organizing of resources, structure of
work
c. Operational Control: It is related to short-term decisions for current operations.

Organizational Functional:

Production, Finance, Marketing, Human

Resource and MIS

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G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Digital Firm

Organizations in which nearly all significant business process and relationships with
customers, suppliers and employees are digital enabled and key corporate assets are
managed through digital means.
Just in time
Online Marketing
Organizations
need
to be able to add, change, and retire their technology
capabilities
very
Just
in
time
Online
Marketing
production
Onlinemore
Salesinformal
rapidly to
respond
to
new
opportunities.
Companies
are
adopting
shorter,
production
Online Sales
Continuous
Inventory
development
process
for many of their e-commerce and e-businessBill-to-ordered
applications,
process
Continuous
Inventory
Bill-to-ordered
Planning
products
thatProduction
provide fast
solutions that do not disrupt their core transaction process
systems and
Production
Planning
products
Replenishment
Customer
Service
organizational
database. In addition to using software packages,
application
service
Replenishment
Customer
Service
Sales force
providers and other outsourcing services business are relaying more heavily
on fast-cycle
Salesstandardized
force
techniques such as joint applications design, prototypes, and reusable
automation
automation
software components that can be assembled into a complete set of services for ecommerce and e-business.

Factories
Factories

Remote
Remote
Offices
Offices&&
Work
WorkGroups
Groups

E-Commerce
E-Commerce

MIS
MIS

Suppliers
Suppliers
Procurement
Procurement
Supply
Chain
Supply Chain
Management
Management

Communication Plans
Communication
& Policies Plans
Policies
Group &
Collaboration
Group Collaboration
E-Communication
E-Communication
Scheduling
Scheduling

Business
Business
Partner
G. Raja Sekar (9700779756,
9966556665, 9700076336)
Partner
Joint Design
Joint
Design
Out
Sourcing
Out Sourcing

Management Information System

Dimensions of Information System:

HR
HR
S&M
S&M
M&P
M&P
F&A
F&A

Management
Senior Managers
Middle Level
Managers
Operational
Manager
Managers Senior
Senior
MiddleManager
level
Middle level
Managers
Managers
Operational
Operational
Managers
Managers

Computer
Computer
Software
Software
Communication
Communication
Technology
Technology
Storage
Storage
Technology
Technology

The Challenge of Information Systems:

The

information system investment challenge: How can organizations obtain

business value from their information systems?
8
The Strategic Business Challenge: What complementary assets are needed
to use
information technology effectively?
G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

The

Globalization Challenge: How can firm understand the business and systems
requirements of global economic environment?

The

Information Technology Infrastructure Challenge: How can organization an

information technology infrastructure that can support their goals

Ethics and Security:

Pitfalls of MIS:

It is common for the people within the organization to resist the implementation of
an MIS or the modification or replacement of an existing MIS. According to Dickson and
Simmons, there are five factors leading of the resistance of new MIS system.

Disruption of departmental boundaries :

A new MIS often

results in changes in several organizational units. For instance, inventory and
purchasing departments might be merged in order to make MIS more efficient.

Distribution

of

the

informal

system:

the informal
communication network may be disrupted as the MIS alters communication
patterns.

Specific individual Characteristics:

People who have worked

with the old systems for years may feel threatened towards their job comfort zone
or their power base.

The organizational culture:

If the organization has a culture of

openness, trust and free communication, employees will not resist the MIS.
However, if the culture is closed and inflexible, resistance is almost a certainty.

How the change is implemented:

If management and
subordinates work together in planning to strategically implement at new MIS,
resistance can be minimized.

Types of Decisions:
Structured Decisions:

These are repetitive and routine and decision

makers can follow a definite procedure for handling them to be efficient, these
decisions are made by Lower, Middle level management in the organization, but
include unstructured components.

Unstructured Decisions: In

which the decision makers must provide

judgment evaluation, and insights into the problem definition. These decisions are
made at higher level of the firm.

Semi Structured Decisions: In which only part of the problem has a

clear-cut answer provided by an acceptance procedure.

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G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Stages in the decision making process:

Simon (1960)
Intellige
Intellige
nce
nce

Identifying and understanding the problems

Identifying
and understanding
MIS
deliver information
can helpthe
for problems
identify problems
MIS deliver information can help for identify problems

Problem
discovery

Design
Design

What are the possible solutions?

What
the possible
solutions?
DSS
forare
exploring
alternatives,
because they process
DSS
for
exploring
alternatives,
because
they
process
analytical tools for modeling data,
grabbing
users
to
analytical
tools
for
modeling
data,
grabbing
users
to
explore various options quickly
explore various options quickly

Choice
Choice

What is the best solution?

What
is the
best solution?
DSS
using
analytical
tools to identifying optional
DSS
using
analytical
tools to identifying optional
solutions
solutions
Also GDSS using online meeting and collaborative tools
GDSS
meeting
collaborative
toAlso
choose
theusing
mostonline
acceptable
andand
widely
support tools
to
choose
the
most
acceptable
and
widely
support
solution
solution

Solution
discovery

Choosing
Solutions

Implement
Implement
ation
ation
Testing the
Solution

How well the solution working

How
well themanagers
solution working
MIS
providing
with routine reports on the
MIS
providing
managers
with routine reports on the
progress of a specific
solution
progress
of
a
specific
solution
DSS using analytical models and data to fine tune of
DSS using analytical models and data to fine tune of
solution
solution

Models of Decision Making:

Individual Decision making models:

a. Rational Model: [Equity] Rational is built on human behavior ideas
that people engage in basically consistent, rational, value-maximization calculation.
According to this model an individual identifies goals, action by their contribution to
those goals and choose the alternatives that contribute most to those goals.
Negative aspects:
Looking personal benefits
Single goal oriented
8
Unlimited needs and preferences of human beings
G. Raja Sekar (9700779756, 9966556665, 9700076336)

Management Information System

Personal bios
b.

Congnitive Model: [Thinking indifferent Manner]

Underlying personality dispositions towards the treatment of information, selection
of alternatives, and evaluation of consequences
Congnitive style that describes people (systematic decision makers) who approach
a problem by structuring it in terms of some formal methods
Congnitive style that describes people (intuitive decision makers) who approach a
problem with multiple methods in an unstructured manner using trail and error to
find a solution.

Group Decision Making Models:

a. Organizational Models: Decision making that takes into account the
structural and political characteristics of an organization.

b. Bureaucratic Models:

Decision making where decisions are shaped by

the organizations standard operating procedures (SOPs)
Rules are strictly followed
Traditionally thinking
Structure of hierarchy

c. Political Models:

Decision making where decisions result from

competition and bargaining among the organizations interest groups and key
leaders.

d. Garbage Models:

Decision making that states that organizations are not

rational and that decisions are solutions that become attached to problems for
accidental reasons. If any one takes faulty decision making then that information
stored for future purpose.

Role
of
Information
Organization:

Systems

in

Business
Business Strategy,
Strategy, Rules
Rules and
and
Process
Process
Softwares
Softwares
Hardwar
Hardwar
ee

Tele8
Tele
Communication
G. Raja Sekar (9700779756, 9966556665, 9700076336)
Communication
s
s

Data
Data
base
base

Management Information System

Unit II

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G. Raja Sekar (9700779756, 9966556665, 9700076336)