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Audience
This tutorial has been prepared for the beginners as well as advanced learners
who want to learn the basics of Management Information System. This tutorial is
very useful for the undergraduate students of computer science, engineering,
business administration, management, science, commerce and arts where an
introductory course on Management Information System is a part of the
curriculum.
Prerequisites
Knowledge of computers is not a prerequisite to follow the contents of this
tutorial. This tutorial does not require a background in computers or computer
programming, though a basic knowledge of computer terminologies will help in
understanding the given concepts very easily.
Table of Contents
About the Tutorial i
Audience i
Prerequisites i
Copyright & Disclaimer i
Table of Contents ii
2. CLASSIFICATION OF INFORMATION 4
Classification by Characteristic 4
Classification by Application 5
3. QUALITY OF INFORMATION 6
4. INFORMATION NEED AND OBJECTIVE 8
Implications of Information in Business 8
MIS Need for Information Systems 10
ii
Characteristics of MIS 14
Characteristics of Computerized MIS 15
Nature and Scope of MIS 15
iii
Definition of KMS 26
Purpose of KMS 27
Activities in Knowledge Management 27
Level of Knowledge Management 28
iv
Phases of BCP 40
Project Management and Initiation 40
Business Impact Analysis 40
Recovery Phase 41
BCP Development Phase 41
Final Phase 42
22. SUMMARY 70
vi
MIS
Information Definition
According to Wikipedia:
"Information can be recorded as signs, or transmitted as signals.
Information is any kind of event that affects the state of a dynamic
system that can interpret the information.
Conceptually, information is the message (utterance or expression) being
conveyed. Therefore, in a general sense, information is "Knowledge
communicated or received, concerning a particular fact or circumstance".
Information cannot be predicted and resolves uncertainty."
MIS
Information Vs Data
Data can be described as unprocessed facts and figures. Plain collected data as
raw facts cannot help in decision-making. However, data is the raw material that
is organized, structured, and interpreted to create useful information systems.
Data is defined as 'groups of non-random symbols in the form of text, images,
voice representing quantities, action and objects'.
Information is interpreted data; created from organized, structured, and
processed data in a particular context.
According to Davis and Olson:
"Information is a data that has been processed into a form that is
meaningful to recipient and is of real or perceived value in the current or
the prospective action or decision of recipient."
MIS
MIS
2. CLASSIFICATION OF INFORMATION
Information can be classified in a number of ways and in this chapter, you will
learn two of the most important ways to classify information.
Classification by Characteristic
Based on Anthony's classification of Management, information used in business
for decision-making is generally categorized into three types:
MIS
Classification by Application
In terms of applications, information can be categorized as:
MIS
3. QUALITY OF INFORMATION
Various authors propose various lists of metrics for assessing the quality of
information. Let us generate a list of the most essential characteristic features
for information quality:
Timely - It must be current and it must reach the users well in time, so
that important decisions can be made in time.
MIS
MIS
In a nutshell:
MIS
information
system
accomplishes
the
following
The following list summarizes the five main uses of information by businesses
and other organizations:
Decision-making - MIS is primarily concerned with managerial decisionmaking, theory of organizational behavior, and underlying human
behavior in organizational context. Decision-making information includes
the socio-economic impact of competition, globalization, democratization,
and the effects of all these factors on an organizational structure.
Computer science:
o
MIS
Computer networking
Information theory
MIS
Content management
IT services management
Form automation
Basically these applications intend to model the business processes, i.e., how
the entire organization works. These tools work by displaying, manipulating and
storing large amounts of data and automating the business processes with these
data.
MIS
12
MIS
6. MANAGEMENT INFORMATION
SYSTEM
To the managers, Management Information System is an implementation of the
organizational systems and procedures. To a programmer it is nothing but file
structures and file processing. However, it involves much more complexity.
The three components of MIS provide a more complete and focused definition,
where System suggests integration and holistic view, Information stands for
processed data, and Management is the ultimate user, the decision makers.
Management information system can thus be analyzed as follows:
Management
Management covers the planning, control, and administration of the operations
of a concern. The top management handles planning; the middle management
concentrates on controlling; and the lower management is concerned with actual
administration.
Information
Information, in MIS, means the processed data that helps the management in
planning, controlling and operations. Data means all the facts arising out of the
operations of the concern. Data is processed i.e. recorded, summarized,
compared and finally presented to the management in the form of MIS report.
System
Data is processed into information with the help of a system. A system is made
up of inputs, processing, output and feedback or control.
Thus MIS means a system for processing data in order to give proper
information to the management for performing its functions.
Definition
Management Information System or 'MIS' is a planned system of collecting,
storing, and disseminating data in the form of information needed to carry out
the functions of management.
Objectives of MIS
The goals of an MIS are to implement the organizational structure and dynamics
of the enterprise for the purpose of managing the organization in a better way
and capturing the potential of the information system for competitive advantage.
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MIS
sorting data
summarizing data
Characteristics of MIS
Following are the characteristics of an MIS:
It should provide a holistic view of the dynamics and the structure of the
organization.
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MIS
It should be able to process data accurately and with high speed, using
various techniques like operations research, simulation, heuristics, etc.
It should support various output formats and follow latest rules and
regulations in practice.
15
MIS
16
MIS
Why ERP?
ERP is very helpful in the following areas:
Linkage between all core business processes and easy flow of integration
Critical decision-making
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Competitive advantage
Features of ERP
The following diagram illustrates the features of ERP:
Scope of ERP
Logistics:
Production
planning,
material
management,
maintenance, project management, events management, etc.
Work flow: Integrate the entire organization with the flexible assignment
of tasks and responsibility to locations, position, jobs, etc.
plant
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MIS
Advantages of ERP
Onetime shipment
Quick decision-making
Better transparency
Disadvantage of ERP
19
8. CUSTOMER RELATIONSHIP
MANAGEMENT
MIS
Why CRM?
To let the customers know about the existing as well as the new products
and services.
20
MIS
Scope of CRM
Advantages of CRM
Disadvantages of CRM
Overhead costs.
21
MIS
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MIS
Attributes of a DSS
Ease of use
Ease of development
Extendibility
Characteristics of a DSS
Support for
problems.
decision-makers
in
semi-structured
and
unstructured
Benefits of DSS
and
capability
of
futuristic
MIS
Components of a DSS
Following are the components of the Decision Support System:
Support Tools: Support tools like online help; pulls down menus, user
interfaces, graphical analysis, error correction mechanism, facilitates the
user interactions with the system.
Classification of DSS
There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS
as follows:
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MIS
Types of DSS
Following are some typical DSSs:
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MIS
All the systems we are discussing here come under knowledge management
category. A knowledge management system is not radically different from all
these information systems, but it just extends the already existing systems by
assimilating more information.
As we have seen, data is raw facts, information is processed and/or interpreted
data, and knowledge is personalized information.
What is Knowledge?
Personalized information
Intranet
Internal expertise
Definition of KMS
A knowledge management system comprises a range of practices used in an
organization to identify, create, represent, distribute, and enable adoption to
insight and experience. Such insights and experience comprise knowledge,
either embodied in individual or embedded in organizational processes and
practices.
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MIS
Purpose of KMS
Improved performance
Competitive advantage
Innovation
Sharing of knowledge
Integration
Driving strategy
Start with the business problem and the business value to be delivered
first.
Identify what kind of strategy to pursue to deliver this value and address
the KM problem.
Think about the system required from a people and process point of view.
27
MIS
28
MIS
Creating content
Storing content
Indexing content
Searching content
Retrieving content
Publishing content
Archiving content
Revising content
for
example,
web
Advantages of CMS
Content management system helps to secure privacy and currency of the
content and enhances performance by:
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MIS
30
MIS
Market intelligence
Investment intelligence
Technology intelligence
External databases
Market reports
Government policies
31
MIS
Advantages of ESS
Instruments of change
MIS
Better understanding
Time management
Disadvantage of ESS
33
MIS
Characteristics of BIS
Benefits of BIS
34
MIS
Approaches of BIS
For most companies, it is not possible to implement a proactive business
intelligence system at one go. The following techniques and methodologies could
be taken as approaches to BIS:
Enterprise Reporting
Capabilities of BIS
Ad hoc analysis
Data quality
Data mining
Information Delivery
o
Dashboard
Collaboration /search
Managed reporting
Visualization
Scorecard
Ad hoc Analysis
Production reporting
OLAP analysis
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MIS
All these systems work as individual islands of automation. Most often these
systems are standalone and do not communicate with each other due to
incompatibility issues such as:
Characteristics of EAI
EAI, when used effectively allows integration without any major changes
to current infrastructure.
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MIS
Unrestricted sharing
organization.
of
data
and
business
processes
across
an
Reduce the on-going cost of maintenance and reduce the cost of rolling
out new systems.
Challenges of EAI
Hub and spoke architecture concentrates all of the processing into a single
server/cluster.
Types of EAI
MIS
38
MIS
management
are
major
Objectives of BCP
Following are the objectives of BCP:
prospective
market
and
competitive
Traditionally a business continuity plan would just protect the data center. With
the advent of technologies, the scope of a BCP includes all distributed
operations, personnel, networks, power and eventually all aspects of the IT
environment.
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MIS
Phases of BCP
The business continuity planning process involves recovery, continuation, and
preservation of the entire business operation, not just its technology component.
It should include contingency plans to protect all resources of the organization,
e.g., human resource, financial resource and IT infrastructure, against any
mishap.
It has the following phases:
Recovery strategies
Selecting interviewees
40
MIS
Customizing questionnaire
Analyzing information
Assigning MTDs
Recovery Phase
This phase involves creating recovery strategies are based on MTDs, predefined
and management-approved. These strategies should address recovery of:
Business operations
Network
Maintenance plan
Testing plan
MIS
Final Phase
The final phase is a continuously
maintenance, and training.
evolving
process
containing
testing,
42
MIS
operations management
logistics
procurement
information technology
Objectives of SCM
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MIS
Features of SCM
Scope of SCM
44
MIS
SCM Processes
Demand Management
Procurement Management
Returns Management
Advantages of SCM
SCM have multi-dimensional advantages:
To the suppliers:
o
Inventory Economy:
o
Distribution Point:
o
Satisfied distributor and whole seller ensure that the right products
reach the right place at right time
Channel Management:
o
Financial management:
o
Low cost
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MIS
Operational performance:
o
Realistic analysis
External customer:
o
Competitive prices
Delivery
Quality work
Delivery
46
MIS
Technological changes
Competitive forces
Strategic planning sets targets for the workings and references for taking such
long-term policy decisions and transforms the business objectives into functional
and operational units. Strategic planning generally follows one of the four-way
paths:
Growth orientation
Product orientation
Market orientation
In this chapter, let us discuss the Strategic Business Objectives of MIS with
regards to the following aspects of a business:
Operational Excellence
Improved Decision-making
Operational Excellence
This relates to achieving excellence in business in operations to achieve higher
profitability. For example, a consumer goods manufacturer may decide upon
using a wide distribution network to get maximum reach to the customers and
exposure.
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MIS
MIS
Various policies that will dominate the course and movement of business.
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MIS
MIS
End/Mean Analysis
The requirement analysis part involves understanding the goals, processes, and
the constraints of the system for which the information system is being
designed.
It is basically an iterative process involving systematic investigation of the
processes and requirements. The analyst creates a blueprint of the entire system
in minute details, using various diagramming techniques like:
Context diagrams
Recommending a solution
Defining Requirements
The requirement analysis stage generally completes by creation of a 'Feasibility
Report'. This report contains:
A preamble
A goal statement
The feasibility report and the proposed alternatives help in preparing the costs
and benefits study.
Based on the costs and benefits, and considering all problems that may be
encountered due to human, organizational or technological bottlenecks, the best
alternative is chosen by the end-users of the system.
MIS
Detailed specification
Hardware/software plan
Database design
In some cases, a 'parallel run' of the new system is performed, where both the
current and the proposed system are run in parallel for a specified time period
and the current system is used to validate the proposed system.
52
MIS
53
MIS
This system should deal with the management information not with data
processing alone.
Accuracy of information.
Reliability of information.
54
MIS
Creating a unified MIS covering the entire organization will lead to a more
economical, faster and more integrated system, however it will increase in
design complexity manifold.
It should take care of not only the users i.e., the managers but also other
stakeholders like employees, customers and suppliers.
Once the organizational planning stage is over, the designer of the system
should take the following strategic decisions for the achievement of MIS goals
and objectives:
Manpower Composition:
programmers.
The
staffs
should
have
analysts,
and
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MIS
Next, it looks for the critical success factors underlying these goals.
MIS
Then it describes the factors that make these outputs effective for the
user.
Problem Definition
Feasibility Study
Systems Analysis
System Design
Implementation
Maintenance
Logic Modeling
Data Modeling
Devices
Enterprise software - These are software system like ERP, SCM, Human
Resource Management, etc. that fulfill the needs and objectives of the
organizations.
57
MIS
Telecom services
Purpose
Definition
test inputs
Each sub-system and all their components should be tested using various test
procedures and data to ensure that each component is working as it is intended.
The testing must include the users of the system to identify errors as well as get
the feedback.
System Operation
Before the system is in operation, the following issues should be taken care of:
Systems control;
The hardware and software used should be able to deliver the expected
processing;
A system reference
architecture.
manual
describing
system
structures
and
58
MIS
All the users including the top management should be given proper
training, so that they have a good knowledge of the content and function
of the system, and can use it fully for various managerial activities such
as reporting, budgeting, controlling, planning, monitoring, etc.
59
MIS
Decision-Making Process
Following are the important steps of the decision-making process. Each step
may be supported by different tools and techniques.
60
MIS
MIS
In the process of solving the problem, you will have to gather as much as
information related to the factors and stakeholders involved in the problem. For
the process of information gathering, tools such as 'Check Sheets' can be
effectively used.
MIS
Rational models
Normative model
The rational models are based on cognitive judgments and help in selecting the
most logical and sensible alternative. Examples of such models include: decision
matrix analysis, Pugh matrix, SWOT analysis, Pareto analysis and decision trees,
selection matrix, etc.
A rational decision making model takes the following steps:
Identifying the important criteria for the process and the result,
all
solutions
and
comparing
the
Dynamic Decision-Making
Dynamic decision-making (DDM) is synergetic decision-making involving
interdependent systems, in an environment that changes over time either due to
the previous actions of the decision-maker or due to events that are outside of
the control of the decision-maker.
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MIS
Sensitivity Analysis
Sensitivity analysis is a technique used for distributing the uncertainty in the
output of a mathematical model or a system to different sources of uncertainty
in its inputs.
From business decision perspective, the sensitivity analysis helps an analyst to
identify cost drivers as well as other quantities to make an informed decision. If
a particular quantity has no bearing on a decision or prediction, then the
conditions relating to quantity could be eliminated, thus simplifying the decision
making process.
Sensitivity analysis also helps in some other situations, like:
Resource optimization
Dynamic models:
MIS
Simulation Techniques
Simulation is a technique that imitates the operation of a real-world process or
system over time. Simulation techniques can be used to assist management
decision making, where analytical methods are either not available or cannot be
applied.
Some of the typical business problem areas where simulation techniques are
used are:
Inventory control
Queuing problem
Production planning
Heuristic Programming
Heuristic programming refers to a branch of artificial intelligence. It consists of
programs that are self-learning in nature.
However, these programs are not optimal in nature, as they are experiencebased techniques for problem solving.
Most basic heuristic programs would be based on pure 'trial-error' methods.
Heuristics take a 'guess' approach to problem solving, yielding a 'good enough'
answer, rather than finding a 'best possible' solution.
Group Decision-Making
In group decision-making, various individuals in a group take part in
collaborative decision-making.
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MIS
Decision Room: Participants are located at one place, i.e. the decision
room. The purpose of this is to enhance participant's interactions and
decision-making within a fixed period of time using a facilitator.
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Security of data - ensuring the integrity of data when critical issues arise
such as natural disasters, computer/server malfunction, physical theft etc.
Generally an off-site backup of data is kept for such problems.
Maintaining and assuring the accuracy and consistency of data over its
entire life-cycle.
Ensuring that once a transaction takes place, none of the parties can deny
it, either having received a transaction, or having sent a transaction. This
is called 'non-repudiation'.
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MIS
Strive to achieve the highest quality, effectiveness, and dignity in both the
process and products of professional work.
MIS
69
22. SUMMARY
MIS
70