Introduction:

What is MIS?

MIS is the use of information technology, people, and business processes to

record, store and process data to produce information that decision makers can use
to make day to day decisions. The full form of MIS is Management Information
Systems. The purpose of MIS is to extract data from varied sources and derive
insights that drive business growth.

Management: is the ultimate user, manager, CEO and the decision makers

Information: Stands for Processed Data.

System: A system means Co-related components which works together for a same
goal.

What is Data?

Data is a raw and unorganized fact that required to be processed to make it

meaningful. Data can be simple at the same time unorganized unless it is
organized. Generally, data comprises facts, observations, perceptions numbers,
characters, symbols, image, etc.

What is Information?

Information is a set of data which is processed in a meaningful way according to

the given requirement. Information is processed, structured, or presented in a given
context to make it meaningful and useful.

Types of Data

Data may be qualitative or quantitative. Once you know the difference between
them, you can know how to use them.

Qualitative Data: They represent some characteristics or attributes. They depict

descriptions that may be observed but cannot be computed or calculated. For
example, data on attributes such as intelligence, honesty, wisdom, cleanliness, and
creativity collected using the students of your class a sample would be classified as
qualitative. They are more exploratory than conclusive in nature.
Quantitative Data: These can be measured and not simply observed. They can be
numerically represented and calculations can be performed on them. For example,
data on the number of students playing different sports from your class gives an
estimate of how many of the total students play which sport. This information is
numerical and can be classified as quantitative.

Characteristics of Valuable Information

Five characteristics of high quality information are

1. Accuracy: The information that is input into a data base is presumed to be

perfect as well as accurate.  The information that is accessed is deemed
reliable.  Flaws do arise with database design but do not let something in
your control, accurate and reliable data, be one of them.  A database design
that is accurate and reliable will help achieve the development of new
business ideas as well as promoting the organizational goals. 

2. Completeness: Completeness is another attribute of high quality

information.  Partial information may as well be incomplete information
because it is only a small part of the picture.  Completeness is as necessary
as accuracy when inputting data into a database.

3. Consistency: Consistency is key when entering information into a

database.  For example, with a column for a phone number entry 10 digits is
the expected length of the field.  Once the fields have been set in the
database, a number more or less than 10 digits will not be accepted.  The
same applies for any field, whether it is an entry that requires a number, a
series of numbers, an address, or a name, etc.  If the fields are not set to a
specific limit for information then consistency is even more important. 

4. Uniqueness: Uniqueness is the fourth component of high quality

information.  In order to add value to any organization, information must be
unique and distinctive.  Information is a very essential part of any
organization and if used properly can make a company competitive or can
keep a company competitive. 

5. Timeliness: New and current data is more valuable to organizations than old
outdated information.  Especially now, in this era of high technological
 advances, out-of-date information can keep a company from achieving their
goals or from surviving in a competitive arena.  The information does not
necessarily need to be out of date to have effect, it just needs to not be the
most current.  Real-time information is an element of timeliness.   

Stages of Data Processing:

Collection

Collection of data refers to gathering of data. The data gathered should be defined
and accurate.

Preparation

Preparation is a process of constructing a dataset of data from different sources for

future use in processing step of cycle.

Input

Input refers to supply of data for processing. It can be fed into computer through
any of input devices like keyboard, scanner, mouse, etc.

Processing

The process refers to concept of an actual execution of instructions. In this stage,

raw facts or data is converted to meaningful information.

Output and Interpretation

In this process, output will be displayed to user in form of text, audio, video, etc.
Interpretation of output provides meaningful information to user.

Storage

In this process, we can store data, instruction and information in permanent

memory for future reference.
What is System?

The word system is derived from the Greek word “system” which means a
organized relationship among the following unit or component. “A system is an
orderly grouping of interdependent components linked together according to a plan
to achieve a specific goal”.

Types of System : Physical or Abstract : Physical system is tangible entities that

may be static or dynamic in nature. Abstract system is conceptual or non-
physical. The abstract is conceptualization of physical situations. Abstract systems
are conceptual. These are not physical entities. They may be formulas,
representation or model of real system

Open and Closed: An open system continually interacts with its environment. It
receives input from the outside and delivers output to outside. A closed system is
isolated from environment influences.

Information System:

Information systems are a special class of systems whose main objective is to

store, retrieve and process, communicate and secure data. Information systems
which help management at different levels to take suitable decisions are called
management information systems. Typically information systems are housed in a
computerized environment/platform to enable users to get faster and accurate
information.

Types of Information Systems

The type of information system that a user uses depends on their level in an
organization. The following diagram shows the three major levels of users in an
organization and the type of information system that they use.
Transaction Processing Systems (TPS)

This type of information system is used to record the day to day transactions of a
business. An example of a Transaction Processing System is a Point of Sale (POS)
system. A POS system is used to record the daily sales.

Management Information Systems (MIS)

Management Information Systems abbreviated as MIS, are used to guide tactic

managers to make semi-structured decisions. The output from the transaction
processing system is used as input to the MIS system.

Decision Support Systems (DSS)

Decision support systems are used by top level managers to make semi-structured
decisions. The output from the Management Information System is used as input to
the decision support system. DSS systems also get data input from external sources
such as current market forces, competition, etc.
Fundamental Roles of Information Systems:

Operations

A business information system carries out specific functions in support of

operations, including payroll, employee record storage, preparing and storing
company documents and credit card processing.

If your company operates a manufacturing line, the information system can

schedule tasks and processes while keeping quality records.

Some companies, such as graphic designers or advertising companies, use the

information system to produce their products and services.

In supporting operations, the information system can increase efficiency and

improve employee productivity.

Controls

Monitoring and controlling the activities of employees is a core function of

information systems. This is especially true of financial transactions in which
management has a duty to prevent fraud and theft. In this role, the security of the
information system is critical, as managers rely on it to track payments received
from customers and invoices from suppliers. The system imposes its control
functions by allowing only authorized employees to log in and access the relevant
functions. For example, only a few employees may be authorized to generate a
company check. In addition to limiting who can perform such functions, the
system keeps track of who logged in and carried out the task.

Decisions

A third fundamental role for information systems is management support in

making decisions. Managers can get all the information they need about company
activities from the system. Complete, accurate information means management
decisions are more effective. More sophisticated systems can go beyond supplying
data to running scenarios:

CBIS (A computer-based information system (CBIS)): is an information system

that uses computer technology to perform different functions. For example, the
google uses internet to accomplish its task, to reach its customers. Computer Based
Information System is a field of studying computers and algorithmic processes
including their applications. Such a system can include personal computer and
software. It aims to support operations, management, and decision making.

Major components of CBIS:

Computer hardware

This is the physical technology that works with information. Hardware can be as
small as a smartphone that fits in a pocket or as large as a supercomputer that fills a
building. Hardware also includes the peripheral devices that work with computers,
such as keyboards, external disk drives, and routers. With the rise of the Internet of
things, in which anything from home appliances to cars to clothes will be able to
receive and transmit data, sensors that interact with computers are permeating the
human environment.

Computer software

The hardware needs to know what to do, and that is the role of software. Software
can be divided into two types: system software and application software. The
primary piece of system software is the operating system, such as Windows or iOS,
which manages the hardware’s operation. Application software is designed for
specific tasks, such as handling a spreadsheet, creating a document, or designing a
Web page.

Telecommunications

This component connects the hardware together to form a network. Connections

can be through wires, such as Ethernet cables or fibre optics, or wireless, such as
through Wi-Fi. A network can be designed to tie together computers in a specific
area, such as an office or a school, through a local area network (LAN). If
computers are more dispersed, the network is called a wide area network (WAN).
The Internet itself can be considered a network of networks.
Databases and Data warehouses

This component is where the “material” that the other components work with
resides. A database is a place where data is collected and from which it can be
retrieved by querying it using one or more specific criteria. A data warehouse
contains all of the data in whatever form that an organization needs. Databases and
data warehouses have assumed even greater importance in information systems
with the emergence of “big data,” a term for the truly massive amounts of data that
can be collected and analyzed.

Human Resources and procedures

The final, and possibly most important, component of information systems is the
human element: the people that are needed to run the system and the procedures
they follow so that the knowledge in the huge databases and data warehouses can
be turned into learning that can interpret what has happened in the past and guide
future action.

Components of MIS

The major components of a typical MIS long-form (Management Information

System) are:

 People – people who use the information system

 Data – the data that the information system records
 Business Procedures – procedures put in place on how to record, store and
analyze data
 Hardware – these include servers, workstations, networking equipment,
printers, etc.
 Software – these are programs used to handle the data. These include
programs such as spreadsheet programs, database software, etc.

Manual Information Systems VS Computerized Information Systems (MIS)

Data is the bloodstream of any business entity. Everyone in an organization needs

information to make decisions. An information system is an organized way of
recording, storing data, and retrieving information.

In this section, we will look at manual information systems vs. computerized

information systems.
Manual Information System

A manual information system does not use any computerized devices. The
recording, storing and retrieving of data is done manually by the people, who are
responsible for the information system.

The following are the major components of a manual information system

 People –people are the recipients of information system

 Business Procedures –these are measures put in place that define the rules
for processing data, storing it, analyzing it and producing information
 Data –these are the recorded day to day transactions
 Filing system – this is an organized way of storing information
 Reports –the reports are generated after manually analyzing the data from
the filing system and compiling it.

The following diagram illustrates how a typical manual information system works

Advantages and Dis-advantages of a manual information system

Advantages:

The following are the advantages of manual information systems

 Cost effective – it is cheaper compared to a computerized system because

there is no need to purchase expensive equipment such as servers,
workstations, printers, etc.
 Flexible –evolving business requirements can easily be implemented into
the business procedures and implemented immediately
Disadvantages:

The following are some of the disadvantages of a manual information system.

 Time consuming –all data entries need to be verified before filing, this is a
time consuming task when done by humans. Retrieving data from the filing
system also takes a considerable amount of time
 Prone to error – the accuracy of the data when verified and validated by
human beings is more prone to errors compared to verification and
validation done by computerized systems.
 Lack of security – the security of manual systems is implemented by
restricting access to the file room. Experience shows unauthorized people
can easily gain access to the filing room
 Duplication of data –most departments in an organization need to have
access to the same data. In a manual system, it is common to duplicate this
data to make it easy to accessible to all authorized users. The challenge
comes in when the same data needs to be updated
 Data inconsistency – due to the duplication of data, it is very common to
update data in one file and not update the other files. This leads to data
inconsistency
 Lack of backups – if the file get lost or mishandled, the chances of
recovering the data are almost zero.

Computerized information system

Computerized systems were developed to address the challenges of manual

information systems. The major difference between a manual and computerized
information system is a computerized system uses a combination of software and
hardware to record, store, analyze and retrieve information.

Advantages and Disadvantages of a computerized information system (MIS)

The following are some of the disadvantages of a computerized information

system.

Advantages:

The following are the advantages of computerized information systems

 Fast data processing and information retrieval – this is one of the biggest
advantages of a computerized information system. It processes data and
retrieves information at a faster rate. This leads to improved client/customer
service
  Improved data accuracy – easy to implement data validation and
verification checks in a computerized system compared to a manual system.
 Improved security – in addition to restricting access to the database server,
the computerized information system can implement other security controls
such as user’s authentication, biometric authentication systems, access rights
control, etc.
 Reduced data duplication – database systems are designed in such a way
that minimized duplication of data. This means updating data in one
department automatically makes it available to the other departments
 Improved backup systems – with modern day technology, backups can be
stored in the cloud which makes it easy to recover the data if something
happened to the hardware and software used to store the data
 Easy access to information – most business executives need to travel and
still be able to make a decision based on the information. The web
and Mobile technologies make accessing data from anywhere possible.

Disadvantages:

 It is expensive to set up and configure – the organization has to buy

hardware and the required software to run the information system. In
addition to that, business procedures will need to be revised, and the staff
will need to be trained on how to use the computerized information system.
 Heavy reliance on technology – if something happens to the hardware or
software that makes it stop functioning, then the information cannot be
accessed until the required hardware or software has been replaced.
 Risk of fraud – if proper controls and checks are not in place, an intruder
can post unauthorized transactions such as an invoice for goods that were
never delivered, etc.

Summary

 MIS stands for Management Information System. It is a collection of people,

procedures, data, and information technology that aids managers to make
informed decisions.
 Computerized information systems are more efficient compared to manual
information systems. Manual information systems are cheaper compared to
computerized information systems.
 Transaction processing systems (TPS) are by operational staff to record day
to day business transactions, and they are used to make structured decisions
 Management Information Systems (MIS) are used by middle-level managers
to make semi-structured decisions
  Decision Support Systems are used by top level managers, and they help top
level managers to make unstructured decisions.

Categories of Management Information Systems

In the information age, Management Information Systems incorporates tools that
enable operations, intelligence, IT and overall processes to run smoothly. It offers
broader services, as it includes multiple specialized systems into one. Here are
some of the major system types:
#Executive Information System (EIS):

The EIS enables top management to make decisions that influence the whole
organization. Executives look for in-depth data to understand the position well and
EIS meets the need.
#Marketing Information System (MIS):

As the name suggests MIS is used by the Marketing teams. It brings to light the
effectiveness of past and current campaigns. This information helps the marketers
to make use of the lessons learned to plan future campaigns.
#Business Intelligence System (BIS):

The collected data and information is analyzed to deliver the key points to take
right business decisions. The BIS is used by the operations team. It is similar to
EIS and helps the lower-level managers and executives.
#Customer Relationship Management System (CRM):

CRM or Customer Relationship Management System stores key information about

customers. The details comprise previous purchases, contact information, and sales
opportunities. Many departments access CRM and they are: marketing, customer
service, business development, and sales.
#Sales Force Automation System (SFA):

The Sales Force Automation System is a division of a CRM system that integrates
and automates many tasks of a sales team. This includes contact management, lead
tracking and generation, and order management.
#Transaction Processing System (TPS):
The Transaction Processing System could be a POS which completes a sale and
manages the related information. The key persons in an organization can track the
trends by going through this reports. It will present the usage trends and track sales
over time.
#Knowledge Management System (KMS):

The Knowledge Management System is used by the customer service department

to address customer related queries and issues.
#Financial Accounting System (FAS):

From the name (Financial Accounting System), it is easy to make out that the
accounting and finance use the system. The accounts payable (AP) and accounts
receivable (AR) get benefitted by Financial Accounting System.
#Human Resource Management System (HRMS):

The HR department can quickly track employee performance records and payroll
data with the help of Human Resource Management System. The HRMS helps
them to maintain a complete record of the employee cycle in the organisation.
#Supply Chain Management System (SCM):

The SCM helps manufacturing companies to track the flow of materials, resources,
and services. This includes the purchase stage to the final products shipping out.