Management information system [mis]:

INTRODUCTION:
A management information system (MIS) is a
system that provides information needed to
manage organizations effectively. Management
information systems are regarded to be a subset
of the overall internal controls procedures in a
business, which cover the application of people,
documents, technologies, and procedures used
by management accountants to solve business
problems such as costing a product, service or a
business-wide strategy. Management information
systems are distinct from regular information
systems in that they are used to analyse 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, e.g. Decision Support Systems, Expert
systems, and Executive information systems.
Definition: Management Information Systems
(MIS) is the term given to the discipline focused
on the integration of computer systems with the
aims and objectives on an organisation.
The development and management of
information technology tools assists executives
and the general workforce in performing any

tasks related to the processing of information.

MIS and business systems are especially useful
in the collation of business data and the
production of reports to be used as tools for
decision making.

ADVANTAGES OF MIS:
An MIS provides the following advantages.
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 a
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 Coordination: MIS facilities
integration of specialized activities by keeping

each department aware of the problem and

requirements of other departments. It
connects all decision centres 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.Management oriented: better management of
resources reducing the cost of production.
8.Efficiency: due to faster processing
technology management can see the
information in their perspective and take
different view of the business.

DISADVANTAGES OF MIS:
Depending on organization deployment, usage
and extraneous factors, some disadvantages
related to Management Information Systems
can come to the fore. Allocation of budgets for
MIS upgrades, modifications and other
revisions can be quite tricky at times. If
budgets are not allocated uniformly or as per
immediate requirements, key functionalities
might get affected and benefits might not be
realized consistently. Integration issues with

legacy systems can affect the quality of output

and vital business intelligence reports.
1.Constant Monitoring Issues:
Change in management, exits or departures
of department managers and other senior
executives have a broad effect on the
working and monitoring of certain
organization practices including MIS systems.
Since MIS is a critical component of an
organization's risk management strategy and
allied systems, constant monitoring is
necessary to ensure its effectiveness. Quality
of inputs into MIS needs to be monitored;
otherwise consistency in the quality of data
and information generated gets affected.
Managers are not able to direct business,
operational and decision-making activities
with the requisite flexibility.
2.Unemployment:
While information technology may have
streamlined the business process it has also
crated job redundancies, downsizing and
outsourcing. This means that a lot of lower
and middle level jobs have been done away
with causing more people to become
unemployed.
3.Privacy:
Though information technology may have
made communication quicker, easier and
more convenient, it has also bought along

privacy issues. From cell phone signal

interceptions to email hacking, people are
now worried about their once private
information becoming public knowledge.
4.Lack of job security:
Industry experts believe that the internet
has made job security a big issue as since
technology keeps on changing with each day.
This means that one has to be in a constant
learning mode, if he or she wishes for their
job to be secure.
5.Dominant culture:
While information technology may have made
the world a global village, it has also
contributed to one culture dominating
another weaker one. For example it is now
argued that US influences how most young
teenagers all over the world now act, dress
and behave. Languages too have become
overshadowed, with English becoming the
primary mode of communication for business
and everything else.

APPLICATIONS OF MIS:
With computers being as ubiquitous as they
are today, there's hardly any large business
that does not rely extensively on their IT
systems.
However, there are several specific fields in
which MIS has become invaluable.
Strategy Support :

While computers cannot create business

strategies by themselves they can assist
management in understanding the effects of
their strategies, and help enable effective
decision-making.
MIS systems can be used to transform data
into information useful for decision making.
Computers can provide financial statements
and performance reports to assist in the
planning, monitoring and implementation of
strategy.
MIS systems provide a valuable function in
that they can collate into coherent reports
unmanageable volumes of data that would
otherwise be broadly useless to decision
makers. By studying these reports decisionmakers can identify patterns and trends that
would have remained unseen if the raw data
were consulted manually.
MIS systems can also use these raw data to
run simulations hypothetical scenarios that
answer a range of what if questions
regarding alterations in strategy. For
instance, MIS systems can provide
predictions about the effect on sales that an
alteration in price would have on a product.
These Decision Support Systems (DSS)
enable more informed decision making within
an enterprise than would be possible without
MIS systems.
Data Processing :
Not only do MIS systems allow for the
collation of vast amounts of business data,

but they also provide a valuable time saving

benefit to the workforce. Where in the past
business information had to be manually
processed for filing and analysis it can now
be entered quickly and easily onto a
computer by a data processor, allowing for
faster decision making and quicker reflexes
for the enterprise as a whole.

Management by Objectives :
While MIS systems are extremely useful in
generating statistical reports and data
analysis they can also be of use as a
Management by Objectives (MBO) tool.
MBO is a management process by which
managers and subordinates agree upon a
series of objectives for the subordinate to
attempt to achieve within a set time frame.
Objectives are set using the SMART ratio:
that is, objectives should be Specific,
Measurable, Agreed, Realistic and TimeSpecific.
The aim of these objectives is to provide a
set of key performance indicators by which
an enterprise can judge the performance of
an employee or project. The success of any
MBO objective depends upon the continuous
tracking of progress.
In tracking this performance it can be
extremely useful to make use of an MIS
system. Since all SMART objectives are by
definition measurable they can be tracked

through the generation of management

reports to be analysed by decision-makers.

ENTERPRISE RESOURCE PLANING SYSTEM

[ERP]:

INTRODUCTION:
Enterprise resource planning (ERP) integrates
internal and external management information
across an entire organization, embracing
finance, accounting, manufacturing, sales and
service, etc. ERP systems automate this
activity with an integrated software
application. Its purpose is to facilitate the flow
of information between all business functions
inside the boundaries of the organization and
manage the connections to outside
stakeholders.
ERP systems can run on a variety of hardware
and network configurations, typically
employing a database to store data.
ERP systems typically include the following
characteristics:
An integrated system that operates in (next
to) real time, without relying on periodic
updates.
A common database which supports all
applications.
A consistent look and feel throughout each
module.

 Installation of the system without elaborate

application/data integration by the
Information Technology (IT) department.
Enterprise Resource Planning or ERP is
actually a process or approach which attempts
to consolidate all of a company's departments
and functions into a single computer system
that services each department's specific
needs. It is, in a sense, a convergence of
people, hardware and software into an
efficient production, service and delivery
system that creates profit for the company.
The most often-cited example of an ERP
software is customer ordering and delivery
where a customer's order moves smoothly
from Sales, where the 'deal' is consummated,
to Inventory and Warehousing, which retrieves
and packages the order for delivery, to
Finance, where invoicing, billing and payments
are handled, and on to Manufacturing, where
replacement of the bought-and-paid-for
product is done.

ADVANTAGES OF ERP:
The fundamental advantage of ERP is that
integrating the myriad processes by which
businesses operate saves time and expense.
Decisions can be quicker and with fewer errors.
Data becomes visible across the organization.
Tasks that benefit from this integration
include:

1.Sales forecasting, this allows inventory

optimization.
2.Order tracking, from acceptance through
fulfilment.
3.Revenue tracking, from invoice through cash
receipt.
4.Matching purchase orders (what was
ordered), inventory receipts (what arrived),
and costing (what the vendor invoiced).
5.ERP systems centralize business data.
6.Eliminates synchronizing changes between
multiple systemsconsolidation of finance,
marketing and sales, human resource, and
manufacturing applications
7.Enables standard product naming/coding.
8.Provides comprehensive enterprise view.
Makes real time to make proper decisions.
9.Protects sensitive data by consolidating
multiple security systems into a single
structure.
DISADVANTAGES OF ERP:
1.Customization is problematic.
2.Reengineering business processes to fit the
ERP system may damage competitiveness
and/or divert focus from other critical
activities
3.ERP can cost more than less integrated
and/or less comprehensive solutions.
4.High switching costs increase vendor
negotiating power, support, maintenance and
upgrade expenses.

5.Overcoming resistance to sharing sensitive

information between departments can divert
management attention.
6.Integration of truly independent businesses
can create unnecessary dependencies.
7.Extensive training requirements take
resources from daily operations.

APPLICATION OF ERP:
Enterprise applications suites, commonly
known as enterprise resource planning (ERP)
systems, represent the transactional backbone
for most enterprises and comprise a variety of
applications for finance and administration as
well as industry-specific applications for
business operations. Comprehensive ERP
suites from leading vendors now typically span
customer relationship management (CRM),
supply chain management (SCM), analytics,
and other applications traditionally sold as
best-of-breed products. As vendors and
enterprises enter the next generation of
applications that support new deployment
options like software-as-a-service (SaaS),
deliver on service-oriented architecture (SOA)
principles, and support business processes via
Web services, Forrester's ERP research
provides the knowledge of the basics, best
practices, trends, strategic advice, and vendor
and product comparisons that firms need in

order to navigate the complexities across the

software ownership life cycle.
An ERP system would qualify as the best model
for enterprise wide solution architecture, if it
chains all the below organizational processes
together with a central database repository
and a fused computing platform.
Manufacturing:
Engineering, resource & capacity planning,
material planning, workflow management,
shop floor management, quality control, bills
of material, manufacturing process, etc.
Financials:
Accounts payable, accounts receivable, fixed
assets, general ledger, cash management, and
billing (contract/service)
Human Resource:
Recruitment, benefits, compensations,
training, payroll, time and attendance, labour
rules, people management
Supply Chain Management:
Inventory management, supply chain planning,
supplier scheduling, claim processing, sales
order administration, procurement planning,
transportation and distribution

Projects:
Costing, billing, activity management, time and
expense

Customer Relationship Management

Sales and marketing, service, commissions,
customer contact and after sales support
Data Warehouse:
Generally, this is an information storehouse
that can be accessed by organizations,
customers, suppliers and employees for their
learning and orientation
ERP Systems Improve Productivity, Speed and
Performance:
Prior to evolution of the ERP model, each
department in an enterprise had their own
isolated software application which did not
interface with any other system. Such isolated
framework could not synchronize the interdepartment processes and hence hampered
the productivity, speed and performance of the
overall organization. These led to issues such
as incompatible exchange standards, lack of
synchronization, incomplete understanding of
the enterprise functioning, unproductive
decisions and many more.
For example: The financials could not
coordinate with the procurement team to plan
out purchases as per the availability of money.
Hence, deploying a comprehensive ERP system
across an organization leads to performance
increase, workflow synchronization,
standardized information exchange formats,
complete overview of the enterprise

functioning, global decision optimization,

speed enhancement and much more.