Unit 2: MIS & Its Implementation-Essential Understanding

Unit 2:
MIS & its Implementation- Essential

Understanding
Two perspectives/ definitions of MIS
MIS Levels
Objectives/ Role of MIS in an organisation
Three forms of MIS & their purpose in a Firm
Benefits from an Effective MIS
MIS Components/ Environment
CSFs for MIS Development/ Implementation
Putting Info Systems in place: 3 distinct approaches
Presentation content & material developed for exclusive use by V. Mohan. All rights reserved. No unauthorised copying or usage permitted.
MIS- 2 Perspectives/ Definitions

MIS is a subset of MSS
(Management Support Systems):
MIS is synonymous with MSS

(Management Support Systems):
A traditional & narrower view which has

been (& still is) in existence:
A modern & comprehensive view, in which the term

MIS includes IS such as EIS & DSS, which can go
beyond merely providing Information, into its deeper
analysis, generating & evaluating decision
alternatives and recommending a decision. The role
of MIS is to actively support the entire process of
decision-making; not merely facilitate the 1st step of
providing Information/ Intelligence:
A system using IT/ ICT, to generate &

make available, all Information
required by personnel (supervisors
& managers) in all functions and at all
levels in the Firm, to effectively run
day-to-day operations, effectively
control the organisation as a whole &
its performance.
Info Systems like EIS & DSS are viewed
as distinct from MIS. Role of MIS in
decision-making
is
to
provide
Information/ Intelligence effectively, for
users to execute further activities &
reach decisions.
A system using IT/ ICT, to generate & make

available, all Information required by personnel
(supervisors & managers) in all functions and at all
levels in the Firm, along with additional analysis &
decision-making support, as required, to effectively
run day-to-day operations, effectively control the
organisation as a whole & its performance and
implement effective future strategies to grow the
business & its competitive edge, through decisions
that are significantly rational/ objective.
MIS Levels
Since MIS caters to supervisors & managers at all levels, 3 levels of MIS can be
conceived, in sync with the Management pyramid:
Top
Mgt.
Middle &
Senior
Mgt.
1st
Lower Mgt.
(Supervisors/
Level Managers)
Strategic
Tactical/
Control
Operational
In-depth analysis of both internal

& external Data & Information, for
decisions related to longer-term
strategic objectives/ goals.
Periodic performance analysis

(Planned
vs.
Actual),
for
operations control decisions to
meet medium term goals.
DecisionMaking
Support
at all the
Management
levels
Exception reports/ alerts on

process
malfunctions,
for
immediate corrective action,
manual/ automated.
MIS Objectives/ Role in a Firm

Based on the modern & comprehensive perspective/ definition, MIS plays a very critical role in
any business organisation, at all levels of management and across all functions/ departments.
The role of a comprehensive & effective MIS in a Firm is to facilitate 4 goals/ objectives:

1. Day-to-day Control of Operations & Business Processes:
All business functions / departments (sales, marketing, customer service, finance,
procurement, inventory, order processing, manufacturing etc.) must be efficient &
run smoothly. In this regard, timely alerts & exception reports about something
going wrong is necessary, for first line supervisors / managers, to facilitate
immediate corrective decisions & actions, as required. Brings a process/
system back to normal functioning.
Some examples:
Delay in response to a Sales Enquiry/ Request for Quote
Delivery delay
A huge amount Invoice payment delayed past due date
Significant delay in delivery
A critical machine in the plant being unproductive/ under maintenance

2. Monitor Performance of Business Functions Periodically:
Actual performance of a business function/ process such as Sales, Marketing, Accounting,
Inventory Control, Procurement, etc. is determined for a defined time period, by computing
performance related information, from all the relevant transactions in that period, for that
function/ process. This is compared with preset performance levels (Targets), to bring out
performance deviations & related analysis, for functional managers to take corrective decision
& actions as required, to reduce/ eliminate the same over time. For middle/ senior
management; decisions are Tactical (short-medium term). Some examples:
Monthly/ Quarterly/ Half yearly/ Annual Sales: Target vs. Actual & % deviation: overall,
territory-wise, sales person wise, product wise, etc. Also, trends in performance deviation.
Plant Capacity Utilization, Target vs. Actual, factory-wise, shop floor wise, etc.
Customer Complaints Analysis, Trends.
Marketing Campaign Effectiveness
Periodic Financial Reports, Expense & Profit Analysis, etc.
Employee attrition rate analysis & trends.

3. Formulate proactive & sound medium-long term strategies:
Each individual in the Top Management team is provided with timely, highly customized and
integrated Information (both internal & external), along with Query Processing, that enables
him/ her to:
assess the status of the business at a glance
identify opportunities & threats
probe & analyze in-depth and in a highly flexible manner, on specific issues
Initiate medium-long term plans/ strategies & related decisions/ actions
.Some examples:
Performance Dashboard, based on KPIs / KPPs
Drill Down analysis & Querying
High level alerts/ reports such as economic trends, specific competitor activity or
developments in the business environment that can impact the organisation. Can also
include internal escalations of complaints, positive & negative events etc.

4. Improve Decision-making at all levels:
An effective and comprehensive MIS should also include, wherever possible, Information
analysis tools that enable the decision-maker to evaluate & compare number of decision
alternatives, compare them and then make a choice as recommended by the decision support
tool or otherwise. Some examples:
Plant Schedule for a specific period (day, week..), based on pending job cards, machine
availability, deadlines, personnel & other resources available, cost etc.
Delivery plan (or job allocations to Customer Service staff) for the day, based on all the
pending deliveries, their locations, available resources, cost etc.
Customer Waiting Time Optimization
Preliminary Loan Sanction/ Rejection, based on various inputs & their evaluation
Target list for a DM campaign; Prioritization of Sales Opportunities, Order Quantity for a
special offer or seasonal demand etc.
Recommended solution for desired Cash Inflow/ Profitability gain
Recommended person for a particular role to be filled internally
Forecasts & Budgets (with what-if analysis, goal seeking & searching etc.)
Benefits from an effective MIS

The benefits that accrue for a Firm, from a comprehensive and effective MIS, are quite
obvious, derived from the role/ objectives expected from it:
1. Efficiency and performance of the organisation as a whole improves over time and this
translates into greater customer satisfaction & better supply chain management, growth in
revenue & profitability.
2. All resources of the Enterprise become productive and are managed effectively: Finance,
HR, Materials, Manufacturing facilities (if applicable).
3. The Firm, over time, becomes well equipped to retain/ enhance its position in the market,
tap market opportunities, monitor competition & maintain competitive edge, etc.
4. Supervisors & managers at all levels develop enhanced rational & objective decisionmaking ability. Person dependence decreases in general, which is a significant gain.
5. Business processes & core competencies of the Firm continually improve due to
appropriate use of technology and automation. This further impacts productivity and the
bottom line positively.
10
MIS Components / Elements

Often, the term Application is heard in relation to
Information Systems & MIS- Financial Analysis
Application, Inventory Control Application, ERP
Application, BI Application, etc. This actually refers to
only one sub-component of a system, when its viewed
physically, as consisting of different parts:
Application Software - the computer program(s)
corresponding to automation of various steps/
activities in one or more business processes.
Application S/w is no doubt the heart & soul of any
IS/ MIS, since it defines & governs what it does.
Hence, theres a tendency to consider these systems
as Software Systems and dilute focus/ attention
somewhat, on the other components/ elements,
without which the Application S/w cannot work!
Its critical to view & understand the full set of
components/ elements of Information Systems in
totality. All these are necessary for the IS/ MIS to
work effectively!
11
MIS Components / Elements

From another perspective, MIS can be seen as having two
components/ elements: Front & Back End Systems.
1. Front End System (Client)
Enables various Users to concurrently access Information
and/ or analysis/ decision support tools for further
processing.
Generally consists of PCs/ notebooks/ mobile devices etc.,
with various Software such as User Interface Applications
(also called Client S/w), stand alone applications, etc.
2. Back End System (Server)
All the data from across the organisation resides at the
Back End, in Databases shared by various Users as
required. All Application S/w related to transaction
processing & data analysis/ information generation also
resides here.
Consists of Servers & Storage Systems, with associated
S/w for Transaction Processing, MIS Applications, DBMS,
etc. Called Server End, since it serves Front End.
The entire set up is referred to as a Client-Server Environment.
12
MIS Critical Success Factors

1. Info Systems & MIS dont come free of cost! Can entail
massive investments. ROI is from the various benefits that
can potentially accrue & it materializes only when the MIS
development & implementation is successful- timely,
relevant & meaningful to the Users, fulfilling its role/
objectives, etc.
2. Success with MIS is not a given; has to be engineered
properly. Many cases exist, of success with MIS not being
as expected, not worth the investments and so on. Its also
very important to understand that the benefits have a
gestation period. They dont accrue overnight!
3. To improve chances of success with MIS, its necessary to
understand the CSFs the most important issues that
contribute to success and which if not favourable, will
certainly lead to failure with MIS!
4. Since no meaningful MIS is possible today w/o Information
& Communications Technology (ICT), MIS development &
implementation often tends to overly focus on this aspect,
resulting in subsequent hassles. Putting in place a
successful MIS is actually a synergy between 4 entities:
PPT&M People, Process, Technology & Management!
13
MIS Critical Success Factors

MANGEMENT
PEOPLE
Implementation process must be Top Management driven. Probably the most critical factor is the Quality and Participation
of Users. Besides being capable of properly articulating
Top Mgt. must have approved a broad IS implementation
information needs/ reports/ alerts & support needed for better
plan, including budget allocations, milestones, realistic ROI
functioning & decision making, the Users must devote necessary
expectations & plan etc.
time for this task, communicating effectively to the s/w provider(s),
A Steering Committee is highly desirable, with cross
Users must also participate & contribute effectively in the System
functional composition and chaired by a Top Management
Testing phase.
team member, to periodically monitor & review progress,
An appropriately staffed & equipped IT function must exist.
usage, benefits etc.
A reliable Technology Consultant is highly desirable.
PROCESSES
The organisation must have well defined & meaningful
process flows, without needless delays, bottlenecks etc.
There must also be ample willingness for process
improvements & changes, which can be necessitated due to
automation & technology usage.
Reliable & accurate data capture mechanisms must exist.
Raw data and processed data must be available on time,
when needed.
Transaction Processing Systems (TPS) must be in place.
TECHNOLOGY & TOOLS

It may not be important to have the best/ latest technology.
Rather, technology must be appropriate & relevant.
Reliable technology providers for hardware, networking, software
& their implementation and System Integrators (SI)
Appropriate System Engineering methodologies, to ensure that
various applications get developed/ implemented as per a clear
plan, without much of rework.
To the extent possible, the Firm must not get tied up with specific
suppliers/ service providers, due to Technology.
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3 Approaches for Info Systems

Today, a business organisation can adopt and also combine three distinct
approaches or methods to set up (put in place) Application Software and
Information Systems in general, including one or more forms of MIS. This has
been made possible by numerous advancements in Software Development
technology and Wide Area Networking (WAN), including the huge changes
brought about by the Internet:
1. Fully Customized Application S/w Development & Implementation by
Inhouse team or contracted to one or more Software Developers.
2. Procure use license for 3rd party Application Software Products /
Solutions at site. This is emerging as the most adopted method for medium
to large organisations, since its a middle-of-the-road approach and partially
offers advantages of the other two extreme approaches.
3. Use 3rd party Application Software Products/ Solutions remotely, under
license, as a managed service from the Provider. Also called SaaS
(Software as a Service) or Cloud Computing.
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3 Approaches for Info Systems

Approach
Brief Description
Fully customised
Application S/w
Development/
ImplementationInhouse or
contracted
Only approach till early/ mid 90s. Firm creates own Application S/w, exactly as required.
Needs full-fledged IT function, including infrastructure & S/w Dev. resources, if done Inhouse. Expensive & time consuming. Also, significant investments are in what may not be
the Firms Core Competence area. Though much less evident today, approach is still used
by large Firms particular about fully tailored S/w & ownership/ exclusive use. In-house
Dev. has given way to use of external S/w service providers.
Procure &
Implement 3rd
Party Software
Product/ Solution
at site (Firms
premises)
Rapidly becoming the default approach. Technology advancements brought in the S/w
Manufacturing & Implementation sector. Application S/w became largely available as an
item/ product which can be procured on license, for installation/ use in a Firm, with some
degree of customization (based on Firm-specific functional requirements) of the standard
product. Much cheaper & faster than (a). Not without cons like the need to change
business flows & processes based on the Product, no S/w ownership, heavy dependence
on S/w Provider etc.
Use 3rd Party S/w

Product/ Solution
remotely, as a
Managed Service
Suitable for small-medium Firms, which cant afford the above approaches. Involves very
little investment in IT. The Firm acquires license to use 3rd party Application S/w through
web-based login to the Service Providers server. No customization whatsoever. Use as-is,
pay as per usage levels and storage space requirements.
16

Unit 2: MIS & Its Implementation-Essential Understanding

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Unit 2:

MIS & its Implementation- Essential

MIS- 2 Perspectives/ Definitions

MIS is synonymous with MSS

A traditional & narrower view which has

A modern & comprehensive view, in which the term

A system using IT/ ICT, to generate &

A system using IT/ ICT, to generate & make

In-depth analysis of both internal

Periodic performance analysis

Exception reports/ alerts on

MIS Objectives/ Role in a Firm

MIS Objectives/ Role in a Firm

MIS Objectives/ Role in a Firm

MIS Objectives/ Role in a Firm

Performance Dashboard, based on KPIs / KPPs

Drill Down analysis & Querying

MIS Objectives/ Role in a Firm

MIS Objectives/ Role in a Firm

Benefits from an effective MIS

MIS Components / Elements

MIS Components / Elements

MIS Critical Success Factors

MIS Critical Success Factors

TECHNOLOGY & TOOLS

3 Approaches for Info Systems

3 Approaches for Info Systems

Use 3rd Party S/w

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