1. MIS, ITS COMPONENTS AND ITS SUBSYSTEMS.

Def: MIS is also preferred Information Processing System, Information and Decision System,
organizational Information System or simply Information System which is integrated, user machine
system or providing information to operations, management and decision making functions in an
organization. The system utilizes computer hardware, software, manual procedures, and models for
analysis, planning control and decision making and a database. The fact that it is an integrated system
doesn’t mean that it is a single but it means that all parts fit into an overall design.

MIS for strategic

policy planning
& decision making

MIS for tactical planning and

Decision making

MIS for operational planning

Decision making & control

Transaction Processing Inquiry response

Pyramid structure of MIS

MIS has been described as a pyramid structure in which bottom layer consist of information for
transaction processing, status inquiries etc.
The next level consists of information resources in day to day operation and control.
The third level consists of information resources to ate in tactical planning and decision making for
management control.
The top level consists of information resources to support strategic planning and policy making by
higher levels of management.

1
Each level of information processing may make use of data provided for lower level but new data may
also be introduced.
E.g. some of information to support management and decision making is provided by data obtained for
transaction process while some may be new data about activities external to the organization.

Computer based user machine system:

A MIS can exist without computers but it is a capability of computer which makes MIS
feasible. The question is not whether computer should be used in MIS but the extend to which
computers should be used in MIS and how much information should be computerized.

The concept of user machine system means some functions are best performed by users while
others are best performed by machines. The user of MIS is any person responsible for entering input
data, instruction given to system or utilizing the information output of the system. For many problems
the user and computer forma combined system with results obtained from a set of interactions between
computer and user.

Computer based means that designer of MIS must have a knowledge of computer and of their
use in information processing. The user machine means that the system designer should also understand
capabilities of human as system components and behavior of users of information system.
Information system application should not require user to be computer experts. However users need to
be able to specify their information requirement. Some understanding of computer, the nature of
information and its use in various management function aids users in this task.

Significance of MIS:

MIS have become a vital component of successful business firms and other organizations. They
contribute an essential field of study in business administration and management. That’s why business
managers must take a subject in information systems. Since you intend to be a manager or business
professional it is very important to have a basic understanding of information systems as it is to
understand any other functional area in business. The following are the reasons why Information
systems are important.

2
1. Information system Resources and technologies:
An information system is an organized combination of people, hardware, software
communication network and data resources that collects, transfer the information in organization.
End users work by using many types of information system. They might include simple manual
hardware devices and informal communication channels.

2. An end user perspective:

Anyone who uses information system or information it produces is an end user. This
usually related to all persons in an organization are distinguished from the smaller number of
persons who are information system analysts or professional computer programmers. A manager
end user is a manager or professional who personally uses information systems so most
managers are managerial end users.

3. An enterprise perspective:
Information system plays a vital role in business success of an enterprise. Information
technology can provide the information. A business needs for efficient operations, effective
management and competitive advantage. However if information system don’t properly related
to the strategic objectives, business operations or management needs of an enterprise they can
seriously damage its success so the proper management of information system is a major
challenge for managers. Thus information system functions include following points:-
It consists of a major functional area of business.
• A major part of resource of an enterprise and its cost of doing business makes a major
resource management challenge.
• It includes any important factor effecting operational efficiency, productivity and
costumer service and satisfaction.
• It helps as a major source of information and a support needed to help effective decision
making by manager.
• It acts as vital, dynamic and challenging opportunity for users.

4. A global society perspective:

We are living in a global info society, with a global economy that is increasingly
dependent on the creation, management and distribution of information dependent on creation.
So information is the basic resource in today’s society.

3
 People in many nations no longer stay with agriculture societies composed of farmers or
even industrial societies where a majority of work force consists of factory workers. Instead the
work force in many nations consist of farmers in service occupations or knowledge workers that
is the persons who spend most of their day in creating, using, and distributing information.

Knowledge workers include executive, managers and supervisors, professional such as

accountants, engineers etc. Most of them are end users who make their efficiency in using
information system to create, distribute, manage and use information resources. Thus
information system helps them to manage financial, material, energy and other resources
involved in their work responsibilities. Information or information system are valuable resource
or knowledge workers, their organization and society. A major challenge for global information
society is to manage its information resources to benefit all members of society while meeting
the strategic goals of organization and nation.
This means using information system to find more efficient and responsible base of using
information system to find more efficient and responsible base of using the limited supply of
material energy and other resources. Since the information systems of so many organizations are
interconnected by local, global, telecommunication networks, knowledge workers who can know
access and distribute information and manage resources all over the world. For these reasons
information system play an increasingly vital role in our global economy.

MIS model:

In the MIS model, the database contains the data provided by the subsystem. In addition both
data and information are entered from environment. The database contents are used by software that
product periodic and special reports as well as mathematical models that perform various aspects of the
firms operation. The software output are used by people who are responsible for solving the firm’s
problems. Note that some of problem solvers can exist within the firm’s environment. The MIS provides
information to other members of inter organizational information system.

Components of MIS:

Components are identified by describing the system as a processor. The system process is
defined by identification of inputs and transformation of inputs to outputs.
The typical example of system as a processor is data processing system. The processes include
classification calculation and summarization of data. These processes are related to the production of
useful information. A computerized MIS processes the information, in this case the processes consists of
computation and skillful management of reports. The functional relationship between input and output
of a process is used to design and evaluate feedback systems. Basically the MIS is having three
components

4
Process:

The total process of a system is the net contribution of many individual processes in MIS design.
This is accomplished by ongoing activities in converting inputs to outputs. For example if we consider
typical marketing information system, the fundamental inputs and outputs could be processed as
follows:

Inputs:

1. Sales on units by each salesman for a period.

2. Estimated sales in units of competitor corresponding to above.
3. Economic conditions and trends.

Outputs:

1. Sales by product i.e. month wise and till date.

2. Sales by salesman i.e. month wise and till date.
3. Sales by trend analysis.
4. Sales forecasting.
For conversion of output from inputs it is important to classify transfer, aggregate and analyze
input quantities to get desired outputs variables. This enables the current information at any specific
point of time.

Parameters of MIS:

An introduction of new technologies, restructuring of sales staff or discovery of new market

spaces result in constant variations in sales, forecasting reports. These quantities which describe state of
system are called the parameters of MIS.

Boundaries of MIS:

Any system is identified by certain limiting factors which includes its components processes and
inter relationships. These limiting factors are termed as boundaries of a system. Effective interface can
be built among various systems by identification of various boundaries. Example: a teller of accounts in
the bank is a system which contributes to the activities of deposits withdraws and related activities
affecting the customer bank balance.

5
 This excludes other banking activities like trust activities, loan activities etc. it is to be noticed
that everything outside the boundary of a system is called its environment. Flow from environment into
a system is called inputs and flow from inside boundary of system into environment is outputs. All
elements within the boundary contribute to specific goals of system.

MIS characteristics:

There are many characteristics of a system which serve as a checklist for system designer. The main
characteristics are:
I. Management orientation
II. Integration
III. Common data flow
IV. Heavy planning element
V. Subsystem concept
VI. Database
VII. Distributed system
VIII. Information as a source
IX. Business activities

Evolution of MIS:

In starting all business were local and small in operation. A single individual perform all
activities by himself. Single individual was responsible for production of goods, for storage and for the
exchanging purpose to the outside environment. There was practically no need for record keeping
because the person knew that how much of stock he had made etc. But over years business started
growing and along with growth business complexities also increased i.e. from one or two commodities
to several thousand products, with localized operations to global operations with production facilities
and wide marketing in many counties. The chief executive of such a big corporation has to depend on
reports, mostly periodic paper reports for information. It is impossible for him to visit all his corporation
facilities, warehouses etc. It is the operation system that keeps him informed of his corporation
activities such full fledged information. System requires an organized system to collect data at source
with accuracy, process it and keep all his files updated to feed the manager with most current highly
accurate information needing investment. Data is used in the form of raw material and must be subjected
to data processing to produce useful information and information system produces this useful
information by using data. If the information system generates information which is useful for managers
in planning and control then the whole system is called MIS.

6
The evolution of MIS and its growth depends on following:
1. On growth of management theory and techniques
2. On growth of management accounting and its applications in business.
3. On changes in the production and distribution methods.

MIS support for decision making:

Decisions vary with respect to structure that can be provided for making them. Basically the decisions
are of two types:

1. Structured: A highly structured decision can be preplanned or pre specified. Structure decision
is also said to be programmable decision in the sense that unambiguous decisions rules can be
specified in advance. It doesn’t mean that the decision is automated although making
programmable decisions are automated. The structured program decision tends to be routine and
frequently repeated.
2. Unstructured: they are not preplanned or pre-specified the unstructured decisions tend to occur
with less frequency and tends to be non routine. The unstructured decision has no pre-established
decision procedure.

Subsystems of MIS:

There are two approaches:

1. Organizational function subsystem

They are somewhat different in terms of activities and are defined with managerial activities as
separate responsibilities. MIS may be viewed as a federation of information system one for each
major organizational function. There may be common support system used by more than one
subsystem but each functional system is unique in its procedure, programs, models etc.

7
 Major functional subsystems are:
I. Marketing
II. Manufacturing
III. Logistics
IV. Personnel
V. Finance and accounting
VI. Information processing
VII. Top management

2. Activities subsystem

Another approach to understand the structure of an information system is in terms of the

subsystem which performs various activities. Some of activities subsystem will be useful for one
organizational function subsystem others will be useful for only one function.

Major activity subsystems are:-

I. Transaction processing
II. Operational control
III. Management control
IV. Strategic planning

8
2. STUDY OF PHYSICAL AND CONCEPTUAL STRUCTURE OF MIS
Our company is a twenty years old company, manufacturing cement in its nine different Cement
Plants all over the country. The technology used in cement manufacturing is more or less the same; but
the plants vary in terms of the tonnage per day (TPD) production of cement. As part of the
diversification program, it has diverted into construction business of specialty. It constructs bridges and
has a special know how in this line.

Conceptual Structure of MIS:

The cement manufacturing is fairly a stable affair and the organization for this is functional and
hierarchical. The Finance, Sales, and Personnel are the centralized functions in location x, while the
Production and Material are functions, which are decentralized. The plant manager is a Chief Executive
at the Cement Plant, reporting to the Managing Director of the company. The plant manager is also
responsible for the commercial, accounting and personnel and such other functions, which are required
to operate the plant. In fact, each plant is termed as the Strategic Business Unit (SBU) responsible for
resources and results.
The nature of the business is such that the Chief Executive has been empowered to make decisions,
which will optimize the use of resources, and the Plant performance will be close to the rated TPD. The
infrastructure of the business is such that the Managing Director has adopted a policy of standardization,
simplification and rationalization backed by clear policy guidelines, rules, regulations, procedures and
systems.

Physical Structure of MIS:

Our Company has a Management Services Department (MSD), which continuously studies the
operation of business in the light of ever hanging requirements of the Management of the cement
business. The nature of the business is such that a fuller utilization of the plant capacity coupled with a
strict cost and expense control, are the keys to profitable business. The operations at the plant level are
procurement, transportation and material handling of cement raw material, distribution of cement as per
advices received from location X, hiring of temporary labor to clear the peak loads of distribution, And
upkeep and maintenance of plant to reduce breakdown and down times.

While at the Head Office in Location X, it is more Management Control and strategic
Management of Technology, Modernization, spares and Capital investment and economic distribution of
cement manufactured at each plant, as there is not much scope for price variation and manipulation.

9
 Managing Director

GM GM Projects
GM GM Management GM &
Finance Personnel Services Sales Construction

Manager Plant Manager Manager

Administration Production & Law and
Distribution Secretarial

Officer Officer Officer Officer

Personnel Distribution Purchase Commercial

10
 CONCEPTUAL STRUCTURE OF MIS OF OUR COMPANY

The organization is a typical mix of specialized function, such as the bridge construction and
staff and line functions such as finance and distribution. The decision-making in our company is in line
with the hierarchical structure. The managing Director takes the major decisions, which effect the
management of business with the assistance of General Managers that is the choice of technology,
pricing, expansion and diversification, man power and the allocation of cement production to various
orders from customers etc. Since the plant Manager takes the decisions pertaining to the operation of the
plant, the decision-making Authority is dedicated to the plant manager to the extent of his operations,
while he participates in the Management decision at the policy level. The Managing Director holds a
quarterly meeting with the Plant Managers for reviewing the performance and decision making to
improve the Plant performance. This Model has been working satisfactorily mainly because our
company has standardized systems and procedures throughout the company with the norms for
delegation of authority and decision-making. Considerable emphasis has been given on this latter aspect
of business.

The organizational culture is fairly authoritarian. The Plant Manager enjoys the authority,
because of the position away from the Top Management at the remote location and derives the power to
decide on the spot on many issues. Normally the Plant Manager’s say is not over ruled. The work culture
is to work with the manuals of the system and the procedures and be within the framework of the
delegated authority. The growth cycle of our company is very typical as far as the cement production
and sales is concerned. After so many years, it has two parts of cycle, viz. Growth and maturity. The
decline of stagnancy in the business is something, which our company would not like to enter. In fact the
diversification into construction was a step towards this objective. As apart of this objective, our
company is thinking of closing down some plants and introducing a variety in cement quality.

Initially the goal of our company was to produce a mass quantity of cements for housing and
maximum utilization of plant and machinery. Then the goal was shifted to produce a cement mix for
different markets with Quality assurance. Then the shift came towards manufacture and sale at a
minimum cost, with a product mix and the quality maintained within the resources available. Our
company uses computers at each location with a large computer system in Location x. At the Plant
location the accounting applications are mainly processed and in location X the corporate application are
mainly processed

11
3. STUDY OF DSS, ITS USERS AND CHARACTERISTICS

Definition

Decision Support Systems (DSS) are a specific class of computerized information system that supports
business and organizational decision-making activities. A properly-designed DSS is an interactive
software-based system intended to help decision makers compile useful information from raw data,
documents, personal knowledge, and/or business models to identify and solve problems and make
decisions.

Typical information that a decision support application might gather and present would be:

• an inventory of all of your current information assets (including legacy and relational data
sources, cubes, data warehouses, and data marts),
• comparative sales figures between one week and the next,
• projected revenue figures based on new product sales assumptions;
• the consequences of different decision alternatives, given past experience in a context that is
described.

DSS features

12
Assist managers in unstructured/semistructuredtask

• Support rather than replace the human DM.

• Improve the effectiveness rather than the efficiency.

• Combine the use of models or analytical techniques with data access functions.

• Emphasis flexibility and adaptability to respect changes in the decision context.

• Focus on features to enhance user interaction.

13
Characteristics of a Decision Support System

1. Facilitation. DSS facilitate and support specific decision-making activities and/or decision
processes.

2. Interaction. DSS are computer-based systems designed for interactive use by decision
makers or staff users who control the sequence of interaction and the operations performed.

3. Ancillary. DSS can support decision makers at any level in an organization. They are NOT
intended to replace decision makers.

4. Repeated Use. DSS are intended for repeated use. A specific DSS may be used routinely
or used as needed for ad hoc decision support tasks.

5. Task-oriented. DSS provide specific capabilities that support one or more tasks related to
decision-making, including: intelligence and data analysis; identification and design of
alternatives; choice among alternatives; and decision implementation.

6. Identifiable. DSS may be independent systems that collect or replicate data from other
information systems OR subsystems of a larger, more integrated information system.

7. Decision Impact. DSS are intended to improve the accuracy, timeliness, quality and overall
effectiveness of a specific decision or a set of related decisions.

14
types

• File drawer systems that provide access to data items.

• Data analysis systems that support the manipulation of data by computerized tools
tailored to a specific task and setting or by more general tools and operators.

• Analysis information systems that provide access to a series of decision-oriented

databases and small models.

• Accounting and financial models that calculate the consequences of possible actions.

• Representational include:

models that estimate the consequences of actions on the basis of simulation models.

• Optimization models that provide guidelines for action by generating an optimal solution
consistent with a series of constraints.

• Suggestion models that perform the logical processing leading to a specific suggested
decision for a fairly structured or well-understood task.

15