MIS

Hari Raghava
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 Introduction
Management Information System (MIS) provides information for the managerial
activities in an organization. The main purpose of this research is, MIS provides
accurate and timely information necessary to facilitate the decision-making process
and enable the organizations planning, control, and operational functions to be
carried out effectively.

Management Information System (MIS) is basically concerned with processing data

into information and is then communicated to the various Departments in an
organization for appropriate decision-making.

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 What is information ?
• Data are facts, events, and transactions which have been recorded. They
are basically the raw inputs which further get processed to become
information.

• When facts are filtered through one or more processes (human or system),
and are ready to give certain kind of details… they are the information.

• Processed data when presented in some useful and meaningful form, it is

actually the information we are looking at.

Accurate
Accurate
Appropriate
Appropriate Data
Data Relevant
Relevant Decision
Decision
Information
Information

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 Difference b/w Data & Information
Data Information

Raw facts Processed facts

Dead stored facts Live presented facts

Inactive (only exists in the backend) Active (being processed data for knowledge
base)

Technology oriented Business oriented

Information
A
A process
process of
of transforming
transforming datadata into
into
information
information andand making
making itit available
available to
to users
users in
in aa
timely
timely enough
enough manner
manner to
to make
make aa difference
difference

Data 4
Characteristic of useful information

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 What is Management Information
• Useful information for management decisions

• Comprises processed data (information), necessary for making management decisions and generally
gives output in the form of tables, matrix, reports, dashboards, graphs, trends, etc for logical and
analytical comparisons.

• Viz. Market trend reports, sales report, IT application usage reports, Management dashboards, business
information reports, research reports, etc.

What is System?
• System is a functional unit, which involves set of procedures/functions to produce certain
outputs by processing data/information given as input.

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Management Information System

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 MIS - Definitions
• MIS is basically a software tool which gives a holistic report of processed information based
on which management can take certain crucial decision on which strategy and tactics could
be figured out

• MIS provides information that is needed to manage organizations efficiently and effectively

• MIS is any organized approach for obtaining relevant and timely information on which
managerial decisions are based

• MIS facilitates the decision making process and enable the organizational planning, control,
and operational functions to be carried out effectively

• MIS is a study of how individuals, groups, and organizations evaluate, design, implement,
manage, and utilize systems to generate information to improve efficiency and effectiveness
of decision making, including systems termed decision support systems, expert systems,
and executive information systems.

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 MIS - definitions cont..
Today, the term is used broadly in a number of contexts and includes (but is not
limited to): 
 Decision support systems,
 Resource and people management applications, 
 Enterprise Resource Planning (ERP), 
 Supply Chain Management (SCM), 
 Customer Relationship Management (CRM),
  Project management and other database retrieval applications.

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 Characteristic of MIS
1) Provides reports with fixed and standard formats - Hard-copy and soft-copy
reports

2) Uses internal data stored in the computer system

3) End users can develop custom reports

4) Requires formal requests from users

5) It should work as a complete and comprehensive system covering all

interconnecting sub-systems within the organization.

6) It should be planned in a top-down way, as the decision makers or the

management should actively take part and provide clear direction at the
development stage of the MIS.
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 What is MIS
Right To Right
Information Person Role of MIS
MIS is like heart in the body.
It ensures that an appropriate data is collected from
At Right At Right various sources, processed and sent further to needy
departments at all levels.
It satisfy diverse need of various departments
Place Time It fulfills the requirements of junior, middle and top
management
Effective decision making based upon:
In the At Right 

Quality analysis
Cost & budget analysis
Right Form Cost 

Risk analysis
Market analysis
 Inventory analysis
 SWOT analysis
 Stakeholder analysis
 Feedback analysis
 Behavior analysis
 Report & Dashboard preparation

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 Impact of MIS
Management of marketing, finance, production and personnel becomes more efficient,
the tracking and monitoring becomes easy
Helps in understanding of business itself, MIS begins with definition of data and its
attributes – uses data dictionary and brings common understanding of terms and
terminology in organization
MIS calls for systemization of business operations – leads to streamlining of
operations, brings discipline in its operations everyone is required to follow
Since the goals of MIS are driven from organization goals, it helps indirectly pulling
everyone in organization towards corporate goals by providing relevant information to
the people in organization
MIS helps to monitor results and performances
MIS provides alerts, in some cases daily, to managers at each level of the organization,
on all deviations between results and pre-established objectives and budgets.
IT enabled MIS is partly responsible for the PARADIGM shift (A change, a new
model,) from support to contributing to an organizations profitability

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Components of MIS

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Components of Information System

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Types of MIS

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 Types of MIS
• Management information systems (MIS), produce fixed, regularly scheduled reports
based on data extracted and summarized from the firm’s underlying transaction
processing systems to middle and operational level managers to identify and inform
structured and semi-structured decision problems.

• Decision support systems (DSS) are computer program applications used by middle

management to compile information from a wide range of sources to support problem
solving and decision making.

• Executive information systems (EIS) is a reporting tool that provides quick access to

summarized reports coming from all company levels and departments such as
accounting, human resources and operations.

• Marketing information systems are MIS designed specifically for managing

the marketing aspects of the business.

• Office automation systems (OAS) support communication and productivity in the

enterprise by automating work flow and eliminating bottlenecks. OAS may 16be
implemented at any and all levels of management.
 Types of MIS cont…
• Accounting Management information systems – Manage all accounting needs of an
organization and all accounting Reports are shared across all levels of accounting
managers

• Financial Management information systems -  The financial management

information system provides financial information to all financial managers within an
organization including the chief financial officer. The chief financial officer analyzes
historical and current financial activity, projects future financial needs, and monitors
and controls the use of funds over time using the information developed by the MIS
department.

• Human Resource Management System -  Human resources management

information systems are concerned with activities related to workers, managers, and
other individuals employed by the organization. Because the personnel function
relates to all other areas in business, the human resources management information
system plays a valuable role in ensuring organizational success. Activities performed
by the human resources management information systems include, work-force
analysis and planning, hiring, training, and job assignments. 17
More on information....

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Classification of information

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Information needs and objective

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 Information needs and objective
Information processing beyond doubt is the dominant industry of the present century.
Following factors states few common factors that reflect on the needs and objectives of the
information processing:
Increasing impact of information processing for organizational decision making.
Dependency of services sector including banking, financial organization, health care,
entertainment, tourism and travel, education and numerous others on information.
Changing employment scene world over, shifting base from manual agricultural to
machine-based manufacturing and other industry related jobs.
Information revolution and the overall development scenario.
Growth of IT industry and its strategic importance.
Strong growth of information services fuelled by increasing competition and reduced
product life cycle.
Need for sustainable development and quality life.
Improvement in communication and transportation brought in by use of information
processing.
Use of information processing in reduction of energy consumption, reduction in pollution
and a better ecological balance in future.
Use of information processing in land record managements, legal delivery system,
educational institutions, natural resource planning, customer relation management and so
on. 21
 Information needs and objective cont...
In a nutshell:
Information is needed to survive in the modern competitive world.
Information is needed to create strong information systems and keep these systems up to
date.

Information processing has transformed our society in numerous ways. From a business
perspective, there has been a huge shift towards increasingly automated business
processes and communication. Access to information and capability of information
processing has helped in achieving greater efficiency in accounting and other business
processes.

A complete business information system accomplishes the following functionalities:

Collection and storage of data.
Transform these data into business information useful for decision making.
Provide controls to safeguard data.
Automate and streamline reporting.

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 Information needs and objective cont...
The following list summarizes the five main uses of information by businesses and other
organizations:
Planning - At the planning stage, information is the most important ingredient in decision
making. Information at planning stage includes that of business resources, assets, liabilities,
plants and machineries, properties, suppliers, customers, competitors, market and market
dynamics, fiscal policy changes of the Government, emerging technologies, etc.
Recording - Business processing these days involves recording information about each
transaction or event. This information is collected, stored, and updated regularly at the
operational level.
Controlling - A business need to set up an information filter, so that only filtered data is
presented to the middle and top management. This ensures efficiency at the operational level
and effectiveness at the tactical and strategic level.
Measuring - A business measures its performance metrics by collecting and analyzing sales
data, cost of manufacturing, and profit earned.
Decision-making - MIS is primarily concerned with managerial decision-making, 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.

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System Concept

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Information and systems

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Information and systems cont...

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 System Concept
What is a SYSTEM?
  A system is a group of interrelated components working together
toward a common goal by accepting inputs and producing outputs in an
organized transformation process.
–  Components and their attribution
Systems structure: relationship between components
Subsystems
–  Environment and Boundary
–  Input and Output

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 System Concept cont...
Definition of a System

The term system may be defined as an orderly arrangement of

a set of interrelated and interdependent element that operate
collectively to accomplish some common purpose or
goal. For example – human body is a system, consisting of
various parts such as head, heart, hands, legs and so on. The
various body parts are related by mean of connecting
networks of blood vessels and nerves and the system has a
main goal of “living”.

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 System Concept cont...
Elements of the System
• Input: Input is what data the system receives to produce a certain
output.
• Output: What goes out from the system after being processed is
known as Output.
• Processing: The process involved to transform input into output is
known as Processing.
• Control: In order to get the desired results it is essential to monitor
and control the input, Processing and the output of the system. This
job is done by the control.
• Feedback: The Output is checked with the desired standards of the
output set and the necessary steps are taken for achieving the output
as per the standards, this process is called as Feedback. It helps to
achieve a much better control in the system.
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 System Concept cont...
Elements of the System
• Boundaries: The boundaries are nothing
but the limit of the system. Setting up
boundaries helps for better concentration of
the actives carried in the system.
• Environment: The things outside the
boundary of the system are known as
environment. Change in the environment
affects the working of the system.
• Interfaces: The interconnections and the
interactions between the sub-systems is
known as the Interfaces. They may be
inputs and outputs of the systems

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System Concept cont...

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System Concept cont...

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 System Concept cont...
Types of System

 Conceptual and Empirical

 Natural and Manufactured
 Closed and Open
 Adaptive and Non Adaptive
 Deterministic and Probabilistic
 Permanent and Temporary
 Stationary and Non Stationary
 Sub system and Super system

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 System Concept cont...
Conceptual and Empirical
Conceptual System are theoretical and explanatory in the nature. It Provide theoretical
framework for which there may or may not be any real life counterpart.
E.g. of such systems can be philosophy, theology etc.

Empirical System are very practical, specific and also very operational in the nature. It can
be based on the conceptual system. E.g. Examination system, surgery act as very good
examples of the empirical systems

Natural and Manufactured System

Natural Systems exist naturally and also thrive in the nature. They are not at all the results
of the human endeavors. E.g. Rivers, mountains, minerals etc. are the major examples of the
natural Systems.

Manufactured are man made systems and not natural one. Examples of such Systems are
dams, canals, roads, machines, factories etc.

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 System Concept cont...
Closed and Open system
If a system is working in isolation from the environment, then the system does not have any
exchange with the environment nor it is influenced by any environmental change, such a system is
said to be a closed system. If a system has exchange with the environment and is influenced by the
environment then it is called an open system. All kinds of accounting system viz. cash, stocks,
attendance of employees are closed system. The system which are required to respond to
environment such as marketing communication, forecasting etc are open systems.

Deterministic and Probabilistic

A system is called deterministic when the inputs, the process and the outputs are known with
certainty. You can predict the output with certainty. A system is called probabilistic when the output
can only be predicted in probabilistic terms. The accounting system is deterministic while the
demand forecast is probabilistic

Adaptive and Non Adaptive

A system which is able to respond to environmental changes are Adaptive system. Feedback and
control mechanism are important features of these system. E.g. Human system.
A system which is not able to respond to changes are non adaptive system. Any inflexible system
is non adaptive like machines.

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 System Concept cont...
Permanent and Temporary system
Permanent systems are one which persists for a very long time, e.g. Policies of business,
government
Temporary system are one that is made for a specified time and then dissolve. e.g. President rule in
a state

Stationary and Non stationary system

System which is movable i.e. its statistics or variable changes with time it is non stationary
system. and which does not change with time or its variable or parameters remain constant is
stationary system.

Sub system and Super system

Each system is part of a large system. The business firm is viewed as the system or total system
when focus is on production, distribution of goal and sources of profit and income.
The total system consists of all the objects, attributes and relationship necessary to accomplish an
objective given a number of constraints. Sub systems are the smaller systems within a system.
Super system denotes extremely large and complex system

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 System Concept cont...
Handling System Complexity
Information Systems are relatively complex as compared to physical systems, and
therefore, they should be handled properly enabling the system designer to understand,
design, develop and implement.

To handle the complexity, the system can be viewed as an assembly of subsystem each with
a clear definition of the boundaries, interfaces and their connectivity. The subsystems then
are put in the hierarchical order to provide a structural view showing the developmental
path to the designer.

The process of simplification provides a way to handle these interconnections and reduce
the complexity. The method of simplification is as follows:

Identify the subsystems which have to be together for the functional `cohesion'.
Form a cluster of these subsystems and identify interconnections in this cluster.
Form clusters of the remaining subsystems.
Connect the clusters with an interface.
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 System Concept cont...
Handling System Complexity

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 System Concept cont...
System Efficiency and Effectiveness
The performance of the system can be measured by two factors, viz., the efficiency and the
effectiveness. The efficiency indicates the manner in which the inputs are used by the
system. Being efficient means the system uses inputs in a `right' way. If the input-output
ratio is adverse, we say that the system is inefficient though it produces the desired output.

The effectiveness is the measure for deciding whether the system provides the desired output
or not. Being effective means producing the right output in terms of quantity and quality.
When the system is ineffective, the system is out of control and it needs a major correction.

A system has to be effective and efficient for the highest utility to the user of the system.
Broadly speaking, the effectiveness is a measure of the goodness of the output, while the
efficiency is a measure of the productivity, i.e., the measure of the output against the input.

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 System Concept cont...
MIS and System Concepts
The MIS is an arrangement of data processing and information systems in an orderly manner
to support the management in achieving the business objectives. The MIS boundaries cross
the limits of the organization and draw the data from the source external to the organization.
MIS follows a generalized model of a system as stipulated into the theory and performs on
the principle of feedback and control. It works on the principle of control by exception.

MIS is designed to provide the information which is exceptional in nature form the point of
view of business. The exceptions could be abnormal events, surprising developments,
shocking news, or something that was not consistent with the exceptions. The MIS must
catch all such points and reports then to the concerned management. It must, therefore,
recognize all such possible points and provide a measure for comparison with the actual
performance. Unless such a feature is included, the MIS will be supplying merely data and
not information.

The MIS, initially, concentrates on the quality of in put satisfying the parameters, viz.,
impartiality, validity, reliability, consistency and age. A large amount of system effort is
spent in this area to ensure the quality of the input.
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 System Concept cont...
The MIS provides a system for data processing and data analysis. It uses a number of
applications and business models, operational research models and applications and business
models, operational research models and application packages to produce the information.
The MIS has a provision to display the information and also print it in a report format. It
also provides a facility to store the intermediate results, which are used in a number of other
systems. The MIS is a combination of the deterministic and the closed systems, and the
probabilistic and the open systems.

By nature, the MIS is an open system interfacing continuously with the internal and the
external environment and is self organizing to meet the ever increasing and changing
information needs of the organization.

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