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MANAGEMENT INFORMATION SYSTEM

MIS is a planned system of collecting, processing, storing and disseminating data in the form of
information needed to carry out the functions of management.

A Management information system is a subset of the overall internal controls of business

covering the application of people, documents, technologies, and procedures 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 analyze other information systems applied in operational activities in the
organization.

MIS lives in the space that intersects technology and business. MIS combines technology
with business to get people the information they need to do their jobs better.

The term MIS is not a new one but only its computerization is new. Before the use of
computers, “MIS” techniques existed to supply managers with the information. This information
would permit them to plan and control operations. The computer has only added one more
dimensions such as accuracy, speed, etc. that permit the consideration of more alternatives in a
decision.

MIS consists of the following three parts:

1. Management
Management is the process of planning and regulating the activities of an enterprise. It is
commonly used to cover the formulating of policies, its execution, the designing of the
organization and its employment.
According to Kimball and Kimball, ”management may broadly defined as the art of applying
the economic principles that underline the control of men and materials in the enterprise
under considerations.
To analyze the management process, it is better to know what the manager does. Functions
of management are given below.
a) Planning
b) Organizing
c) Staffing
d) Direction
e) Co-ordination
f) Control
2. Information: information consists of data that have been retrieved, processed or
otherwise used for informative process.
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3. Systems: a system is a set of element joined together for a common purpose.

A sub-system is a part of large system with which we are concerned. But all systems are
Parts of large systems. A definition of a management information system, as the term is
generally understood, is an integrated, user-machine system for providing information to
support operations, management and decision-making functions in an organization. The
system utilizes computer hardware and software; manual procedures, model for analysis,
planning, control and decision-making and a database.
It is also popularly known as the information system, the information system and decision
sysrem, the computer-based information system.

According to Institute of management accounts, U.K. MIS is a system in which defined data are collected,
processed and communicated to assist those responsible for the use of resources.

According to Thomas R. Prince, MIS is a computer based network containing one or more operating systems,
provides relevant data to management for decision-making purposes and also contains the necessary
mechanism for implementing changes of responses made by management in decision-making.

Characteristics of MIS:
MIS is a comprehensive coordinated set of information sub-systems, which are rationally integrated
and transform data into information, in a variety of ways to increase productivity in conformity with
the management style of working. Thus the following are the main characteristics of MIS.

1. MIS is Integrative system:

A MIS is a rationally integrated. Integration significant so as to product more meaningful MIS. Sub-
Systems are integrated so that the activities of each are inter-related with those of the others. The
integration is accomplished primarily by passing data between these systems.

2. MIS is Sub-System concept:

 Even though the system is viewed as a single entity, it must be broken down into digestible
subsystem tem that can be implemented one at a time.
 The breakdown of MIS into meaningful age for a prioritized implementation. This sub-
system analysis is essential for applying boundaries to the problem thus enabling the
designer to focus on manageable entities that can be assigned and computerized by
selected system and programming teams.
1. MIS Provides Relevant Information to Management:
A MIS should provide only relevant information. Determining what information is relevant may
be difficult in situations in which analysis vary for different managers or according to particular
circumstances, such as in the case of special problems.
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2. MIS is Flexible:
MIS must be designed to be easily modified. Information system should be capable of being easily
expanded to, accommodate growth or new types of processing activities and also easily
contracted.
3. MIS is a Feedback System:
A Management information system should provide feedback about its own efficiency and
effectiveness. Statistics prepared by the system about who uses each system facility and how
much they use each one are more sophisticated forms of feedback.

4. MIS is Management Oriented:

This is more significant characteristic of MIS. The system is designed from the top down. This
doesn’t mean that the system development starts from an appraisal of management needs and
overall business objectives. It is possible that middle management or operating management is
the focus of the system, such that their needs are the corner stone on which the system is built.

7. MIS Enhances Productivity:

MIS enables routine tasks such as,

1. Document preparation to be carried out more efficiently.

2. Provides higher levels of service to external organizations and individuals
3. Supplies the organization
4. With early warning about the internal problems are external threats, gives early notice of
opportunities, facilitates the organizations normal management processes and enhances
managers ability to deal with unanticipated problems.

8. MIS is coordinated system:

MIS is centrally coordinated to ensure that its data processing, office auto machine, intelligence and
decision support systems as well as other components, are developed and operated in a planned
and coordinated way. It is done so.

1. To ensure that information is passed back and forth among the sub-systems as needed.
2. To ensure that information system operates efficiently.

9. MIS is Distributed data processing:

The majority of companies implementing MIS have a geographic network of sale offices,
distribution points, manufacturing plants, division’s subdivisions and so on.
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10. MIS Computerized system:

It is possible to have a MIS without using a computer. But its use increases the effectiveness of the
system. In fact, its use equips the system to handle a wide variety of applications by providing
quickly their information requirements. Besides accuracy and consistency in processing data
reduction in staff are other attributes of the computer to MIS.

Nature of MIS:

1. Report-Orientation: The concept of management information system is modified, so that

information rather than voluminous data has become the requirement of the user. Although
data can be analyzed by different persons separately giving various shades and shapes to
the information. So the system concept is now individual-oriented.
2. Action-Oriented: This concept was further modified due to the need that information
should be such that it leads to some action, decision or investigation or research.
3. Exception-ORIENTED: After having action-oriented nature of MIS it was realized that
there must be some specific or elective approach to the action or the analysis of data. So
the concept of exception was introduced indicting that MIS is related to the exceptional
situations of business rather than routine matters.
4. Database Orientation: As we know our environment is a dynamic in nature of the change
in every system is must. So is the case with MIS as the business environment becomes
competitive. The concept was then evolved that the system should be capable of handling a
need-based exception reporting. This need may be of individual group or organizational. To
full fill this need, a common database is prepared which can be used by each & every
individual accordingly. So the concept of MIS based on database in emerged and proven to
be effective.
5. End-User Orientation: After successfully implementing these changes, the concept of
end user computing using multiple databases emerged. This concept brought a basic change
in the nature of MIS that is decentralization of system and independency of user over
computer professionals or experts. Now the user uses the database to collect the
information and uses that information accordingly. the concept of MIS has been moulded to
a system which handles the databases, provides computing facilities to the end user, and
gives a variety of decision making tools to the user of the system.
6. Academic Discipline Orientation: MIS is based on the information gatherd for
analyzing the data. While analyzing the data it relies on many academic disciplines like
theories, principles and concepts from management, organization behavior , computer
science, psychology and human behavior. The principles of these academic fields re used in
designing a MIS, in preparing its different modules etc.
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SCOPE OF MIS:
1. MIS is an integrated system for providing information to support:
a. The operations
b. Management
c. Decision-making functions in an organization
2. MIS utilizes computer hardware/software, manual procedures. management and
decision models and database
3. MIS has a pyramidal structure
a. Bottom layer provides information for transaction processing
b. The next level provides information resources to support routine operations.
c. The third level offers information resources to help tactical planning and
decision-making for middle management planning control.
d. The top level presents information resources in support of strategic planning and
policy making by top management group.

If the information is better, complete, more reliable and timely, it is easier for the manager to make
a final decision and to exercise effective control.

Lower management is interested in technical and operational information. Operational and

technical decisions are programmed decisions for controlling routine operations.

Middle management: is interested in technical information. Ex. Comprehensive reports

basically planning/control oriented, for taking tactical decisions. Tactical decisions are related to the
implementation of plans and policies approved by to management.

IMPORTANCE OF MIS
In present business organizations, MIS play a very important role. It is a process of collection and
strong of the data useful for the organization. Executives retrieve these data, when required and
process them for generating information. Previously, the business organizations were not perceived
as a system. All the functional areas were independent and there was not a cross discussion
amongst the managers of different functional areas. However, in present days, all departments
hold equal responsibility. This mechanism helps the organization to achieve its objectives efficiently
and economically.

Thus the following points can summarize the importance of MIS

1. It helps in minimizing the risk in decision making.

2. It processes the data and derives information out of them.
3. It provides information about the various aspects of business.
4. It helps the executives to avail the information regarding the functional areas quickly.
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5. The database helps in conducting research. The data stored are used as secondary data
6. It provides sound information regarding the financial health of business organization.
7. It helps in preparing corporate report.
8. It helps the HRD manager in finding out the requirement of the human resource, their wages
and salary, performance appraisal, training, promotion, absenteeism and employees
turnover, which is useful in drafting sound HRD policies.

FUNCTIONS OF MIS
MIS is a combination of computers and procedures for providing information that manager’s use in
making decisions.

1. Collect data:
Massive amount of information available to organization- personnel records, information
about customers, and information about competitors, sales data, accounting data and so
on. The first function of an MIS is to determine the information needed to make decisions
and organize it into database.
A ‘Database’ is an integrated collection of data stored in one place for efficient access and
information processing. Data can be obtained from sources, within and outside the
organization. Generally, most data collected for an MIS come from internal sources such as
company records or reports and information compiled by managers themselves. External
sources include trade publications, customers and consultants.

2. Store and Process Data:

After creation of data, a data base must be stored and be processed in a form useful to
managers. Data are generally stored on magnetic tape or hard disks when main frame
computers are used and on hard disk or floppy disk, when minicomputers are used. The
data can be loaded into computers in seconds for easy access by the user.
3. Present Information to Managers:
After collection of data, storing and processing of data, the next stop is to present the
information to managers for their use.
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