SUBMITTED BY: SUBMITTED TO:

SAKILA AFROZE MR. MD. BABUL CHOWDHURY

ID: 14CSE070403 ASSISTANT PROFESSOR
14TH BATCH AND COORDINATOR
TH
8 SEMESTER DEPARTMENT OF COMPUTER
DEPARTMENT: CSE SCIENCE AND ENGINEERING
INTRODUCTION

A management information system (MIS) is a system or process that provides the

information necessary to manage an organization effectively. MIS and the information it
generates are generally considered essential components of prudent and reasonable
business decisions.

MIS is viewed and used at many levels by management. It should be supportive of the
institution's longer term strategic goals and objectives. To the other extreme it is also
those everyday financial accounting systems that are used to ensure basic control is
maintained over financial recordkeeping activities.

GOAL

Contribute to a better understanding of organizations, communities and clients. An

institution's MIS should be designed to achieve the following goals:

• Enhance communication among employees.

• Deliver complex material throughout the institution.
• Provide an objective system for recording and aggregating information.
• Reduce expenses related to labor-intensive manual activities.
• Support the organization's strategic goals and direction.

OBJECTIVES

To stress the importance of Management Information Systems in keeping records of

services provided by Community based organizations

PURPOSE

Understand the basics of management information system (MIS) familiarize with the
stages of development of a simple MIS and its applications.

MANAGEMENT INFORMATION SYSTEMS

"An integrated user-machine system for providing information to support operations,

management and decision making functions in an organization. The system utilizes
computerized and manual procedures; models for analysis, planning, control and decision
making; and a database."

A management information system (MIS) is a computer-based system that provides the

information necessary to manage an organization effectively. An MIS should be designed
to enhance communication among employees, provide an objective system for recording
information and support the organization's strategic goals and direction.

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  MIS provide managers with reports and, in some cases, on-line access to
the organisations current performance and historical records
 Typically these systems focus entirely on internal events, providing the
information for short-term planning and decision making.
 MIS summarise and report on the basic operations of the organisation,
dependent on the underlying TPS for their data.

WHY MANAGEMENT INFORMATION SYSTEM?

A majority of workers today are knowledge workers – they spend time creating,
distributing, or using information. Example: bankers, coordinators, caseworkers,
counselors, community organizers, programmers, etc
► About 80% of an executive’s time is devoted to information receiving,
communicating, and using it.
► Information is the basis for virtually all activities performed in an organization.
► Best use of two key ingredients in organizations – people and information.
► Effective utilization of information systems in management..
► Productive use of information.
► Information is a resource to increase efficiency, effectiveness and competitiveness
of an enterprise.

Some Examples of MIS

· Airline reservations (seat, booking, payment, schedules,
boarding list, special needs, etc.)
· Train reservation
· Bank operations (deposit, transfer, withdrawal)

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MIS PRINCIPAL CONCERNS

Facilitate decision making by supplying the information needed in an up-to-date and

accurate form

• To the people who need it

• On time
• In a usable form

STEPS IN MIS DEVELOPMENT

Preliminary Investigation
· The problem
· Magnitude and scope
· Alternatives
· Viability and cost effectiveness

Requirements Analysis
· Knowing the primary and secondary users
· Ascertaining user needs
· Primary and secondary sources of information
· Design, development and implementation needs

Systems design
· Inputs
· Processing
· Outputs
· Storage
· Procedures
· Human resources

Acquisition/procurement
· Compatibility
· Cost effectiveness
· Performance standards
· After sales service
· Configuration
· Portability

Implementation/installation
· Application development
· Testing
· Debugging – logical and syntactical
· Procedure and user manual preparation
· Orientation and training

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Maintenance and up gradation

MIS ELEMENTS

MIS ELEMENTS
Management functions
STEPS IN PLANNING
Planning
Controlling 1. Selecting objectives
Decision making 2. Identifying activities required to achieve the
Information system stipulated objectives.
3. Describing the resources or skills, or both,
Management information
necessary to perform the activities.
4. Defining the duration of each activity to be undertaken.
5. Determining the sequence of the activities.

REQUIREMENTS DURING THE PLANNING PROCESS

1. Supplying the information needed by the planner at each step

2. Establishing procedures for procuring the information at each step (including the
means to view alternatives)

3. Arranging for storage of the approved plans as information for the control process

4. Devising an efficient method for communicating the plans to other members in the
organization

CONTROLLING

Controlling involves

1. Establishing standards of performance in order to reach the objective

2. Measuring actual performance against the set standards.
3. Correcting deviations to ensure that actions remain on course.

REQUIREMENTS FOR CONTROLLING

1. Defining expectations in terms of information attributes

2. Developing the logic for reporting deviations to all levels of management prior to the
actual occurrence of the deviation

DECISION MAKING

Decision making is the process of selecting the most desirable or optimum alternative to
solve a problem or achieve an objective. The quality and soundness of managerial

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decisions is largely contingent upon the information available to the decision-maker.
Gorry and Scott Morton (1971) classified decision making on three levels of a
continuum:

 Strategic
 Tactical
 Technical

• Strategic decisions are future-oriented because of uncertainty. They are part of the
planning activity.

• Tactical decision making combines planning activities with controlling. It is for short-
term activities and associated allocation of resources to them to achieve the objectives.

• Technical decision making is a process of ensuring efficient and effective

implementation of specific tasks.

Elements of decision making

The four components of the decision making process are

 Model
 Criteria
 Constraints
 Optimization

• Model: A model is an abstract description of the decision problem. The model may be
quantitative or qualitative.

• Criteria: The criteria must state how goals or objectives of the decision problem can be
achieved. When there is a conflict between different criteria, a choice has to be made
through compromise.

• Constraints: Constraints are limiting factors which define outer limits and have to be
respected while making a decision. For example, limited availability of funds is a
constraint with which most decision makers have to live.

• Optimization: Once the decision problem is fully described in a model, criteria for
decision making stipulated and constraints identified, the decision-maker can select the
best possible solution.

SYSTEM

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"A set of elements forming an activity or a procedure/scheme seeking a common goal or
goals by operating on data and/or energy and/or matter in a time reference to yield
information and/or energy and/or matter."

PERCEIVING THE SYSTEM

1. Some components, functions and processes performed by these various components

2. Relationships among the components that uniquely bind them together into a
conceptual assembly which is called a system

3. An organizing principle which is an overall concept that gives it a purpose

4. The fundamental approach of the system is the interrelationship of the sub-systems of

the organization

BASIC PARTS OF THE ORGANIZATION

BASIC PARTS OF THE ORGANIZATION

1. The individual
2. The formal and informal organization
3. Patterns of behavior arising out of role demands of the organization
4. The role perception of the individual
5. The physical environment in which individuals work

WHY A SYSTEMS APPROACH

• Developing and managing operating systems (e.g., money flows, manpower systems)
• Designing an information system for decision making
• Systems approach and MIS
• MIS aims at interrelating, coordinating and integrating different sub-systems by
providing information required to facilitate and enhance the working of the sub-systems
and achieve synergistic effects

Modern management is based upon a systems approach to the organization. The systems
approach views an organization as a set of interrelated sub-systems in which variables are
mutually dependent. A system can be perceived as having:

• Some components, functions and the processes performed by these various

components;
• Relationships among the components that uniquely bind them together into a
conceptual assembly which is called a system; and
• An organizing principle that gives it a purpose (Albrecht, 1983).

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The organizing system has five basic parts, which are interdependent. They are:

• the individual;
• the formal and informal organization;
• patterns of behavior arising out of role demands of the organization;
• the role perception of the individuals; and
• the physical environment in which individuals work.

The interrelationship of the sub-systems within an organization is fundamental to the

systems approach. The different components of the organization have to operate in a
coordinated manner to attain common organizational goals. This results in synergic
effects. The term synergy means that when different sub-systems work together they tend
to be more efficient than if they work in isolation. Thus, the output of a system with well
integrated sub-systems would be much more than the sum of the outputs of the
independent sub-systems working in isolation.

The systems approach provides a total view of the organization. It enables analysis of an
organization in a scientific manner, so that operating management systems can be
developed and an appropriate MIS designed.

By providing the required information, an MIS can help interrelate, coordinate and
integrate different sub-systems within an organization, thus facilitating and increasing
coordinated working of the sub-systems, with consequent synergism. The interaction
between different components of the organization depends upon integration,
communication and decision making. Together they create a linking process in the
organization.

Integration ensures that different sub-systems work towards the common goal.
Coordination and integration are useful controlling mechanisms which ensure smooth
functioning in the organization, particularly as organizations become large and
increasingly complex. As organizations face environmental complexity, diversity and
change, they need more and more internal differentiation, and specialization becomes
complex and diverse. The need for integration also increases as structural dimensions
increase.

Communication integrates different sub-systems (specialized units) at different levels in

an organization. It is thus a basic element of the organizational structure necessary for
achieving the organization's goals.

INFORMATION

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'A set of classified and interpreted data used in the decision making process"

Information has also been defined as some tangible entity which serves to reduce
uncertainty about future state or events

In the context of different levels of decision making, information can be described as:

• Source

• Data

• Inference and predictions drawn from the data

• Value and choices (evaluation of inferences with regard to the objectives, and then
choosing courses of action)

• Action which involves a course of action

The value of management information lies in its content, form and timing of presentation

SUMMARY OF INFORMATION SYSTEM

Categories of Information System Characteristics

Transaction Processing System Substitutes computer-based processing for
manual procedures.

Deals with well-structured processes. Includes

record keeping applications.

Management information system Provides input to be used in the managerial

decision process. Deals with supporting well
structured decision situations. Typical
information requirements can be anticipated.

Decision support system Provides information to managers who must

make judgments about particular situations.
Supports decision-makers in situations that are
not well structured.

MIS AS A PYRAMIDAL STRUCTURE

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CONCEPTUAL BASIS OF MIS

1. Concepts of organization.

2. Organizational theories, principles, structure, behavior and processes such as

communication, power and decision making.

3. Motivation and leadership behavior.

ORGANIZATIONAL STRUCTURE AND MIS

MIS has been described as a pyramidal structure, with four levels of information
resources. The levels of information would depend upon the organizational structure. The
top level supports strategic planning and policy making at the highest level of
management. The second level of information resources aid tactical planning and
decision making for management control. The third level supports day-to-day operations
and control. The bottom level consists of information for transaction processing. It then
follows that since decision making is specific to hierarchical levels in an organization, the
information requirements at each level vary accordingly.

Thus, MIS as a support system draws upon:

• Concepts of organization;

• Organizational theories, principles, structure, behavior and processes such as

communication, power and decision making; and

• Motivation and leadership behavior.

Davis and Olson (1984) analyzed the implications of different characteristics of the
organizational structure on the design of information systems (Table 1).

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IMPLICATIONS OF THE ORGANIZATIONAL STRUCTURE FOR MIS

Assessing information needs

A first step in designing and developing an MIS is to assess the information needs for
decision making of management at different hierarchical levels, so that the requisite
information can be made available in both timely and usable form to the people who need
it. Such assessment of information needs is usually based on personality, positions, levels
and functions of management. These determine the various levels of information
requirements.

Concept Implications for Information Systems

Hierarchy of A tall hierarchy with narrow span of control requires more formal control
authority information at upper levels than a flat hierarchy with wide span of control.
Specialization Information system applications have to fit the specialization of the
organization.
Formalization Information systems are a major method for increasing formalization.
Centralization Information systems can be designed to suit any level of centralization.
Modification of Information systems can be designed to support product or service
basic model organizations, project organizations, lateral relations and matrix
organizations.
Information Organizational mechanisms reduce the need for information processing and
model of communication. Vertical information systems are an alternative to lateral
organization relations. Information systems are used to coordinate lateral activities.
Organizational Organizational culture affects information requirements and system
culture acceptance.
Organizational Organizational power affects organizational behavior during information
power system planning, resource allocation and implementation. Computer
systems can be an instrument of organizational power through access to
information.
Organizational The information system may need to change at different stages of growth.
growth
Goal When identifying goals during requirements determination, care should be
displacement taken to avoid displaced goals.
Organizational Suggests need for information system design for efficiency measures to
learning promote single loop learning and effectiveness measures for double loop
learning.
Project model Describes general concepts for managing change with information system
of projects.
organizational
change
Case for stable Establish control over frequency of information system changes.

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system
Systems that Reporting critical change variables, organizational change, or relationships,
promote and use of multiple channels in a semi-confusing system may be useful for
organizational promoting responses to a changing environment.
change
Organizations Provides approach to requirements determination and job design when both
as socio- social and technical considerations are involved.
technical
systems

Table: Organizational structural implication for information systems

INFORMATION REQUIREMENTS FOR MIS

1. Assessing information requirements

2. Levels of information requirements
• Organizational level
• Application level
• Technical
• Database

STRATEGIES FOR DETERMINING INFORMATION REQUIREMENTS

1. Asking
2. Deriving from an existing information system
3. Synthesizing from characteristics of the utilizing system
4. Discovering from experimentation with an involving information system

STRATEGY FOR DETERMINING DATA REQUIREMENTS

1. Identify elements in the development process utilizing system:

• Information systems or applications

• Users
• Analysts

2. Identify process uncertainties:

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 • Existence and availability of a set of usable requirements
• Ability of users to specify requirements
• Ability of analysts to elicit and evaluate requirements

3. Evaluate the effects of elements in the development process over process uncertainties.
4. Evaluate the combined effects of the process uncertainties on overall requirements
uncertainty.
5. Select a primary strategy for requirements determination based on the overall
requirements uncertainty.

Uncertainty level Strategy

Low • Asking or deriving from an existing system
• Synthesis from characteristics of utilizing systems
High • Discovering from experimentation

If uncertainty is low, then the strategy should be to:

• Ask the users what their requirements are. This presupposes that the users are able to
structure their requirements and express them objectively. Asking can be done through
- questions, which may be closed or open,
- brainstorming sessions, totally open or guided, and
- group consensus as aimed at in Delphi methods and group norming.
• Wherever there are close similarities in the organization and easy replication is
possible, information requirements can be derived from the existing system.
• Characteristics of the utilizing system should be analyzed and synthesized. This is
particularly useful if the utilizing system is undergoing change.

If uncertainty is high, discover from experimentation by instituting an information system

and learning through that the additional information requirements. This is 'prototyping' or
'heuristic development' of an information system.

6. Select one or more from the set of methods to implement the primary strategy

TYPES OF MIS

1. Databank information system

2. Predictive information system
3. Decision making information system
4. Decision taking information system.

• Databank information systems refer to creation of a database by classifying and storing

data which might be potentially useful to the decision-maker. The information provided
by the databank is merely suggestive. The decision-maker has to determine contextually
the cause and effect relationships. MIS designs based on the databank information system
are better suited for unstructured decisions.

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• Predictive information systems provide source and data along with predictions and
inferences. The decision-maker can also enquire as to 'what if a certain action is taken?'
and whether the underlying assumptions are true. This type of MIS is useful for semi-
structured decisions.

• Decision-making information systems provide expert advice to the decision-maker

either in the form of a single recommended course of action or as criteria for choice,
given the value system prevailing in the organization. The decision-maker has just to
approve, disapprove or modify the recommendation. Decision-making information
systems are suitable for structured decisions. Operations research and cost-effectiveness
studies are examples of decision-making information systems.

• Decision-taking information systems integrate predictive information and decision-

making systems.

THE MIS PROCESS

The MIS implementation process (Table) involves a number of sequential steps.

1. First establish management information needs and formulate broad systems objectives
so as to delineate important decision areas (e.g., general management, financial
management or human resources management). Within these decision areas there will be
factors relevant to the management decision areas, e.g., general management will be
concerned about its relationship with the managing board, institute-client relationships
and information to be provided to the staff. This will then lead the design team to ask
what information units will be needed to monitor the identified factors of concern.
Positions or managers needing information for decision making will be identified.

2. Develop a general description of a possible MIS as a coarse design. This design will
have to be further refined by more precise specifications. For efficient management of
information processing, the MIS should be based on a few databases related to different
sub-systems of the organization.

3. Once the information units needed have been determined and a systems design
developed, decide how information will be collected. Positions will be allocated
responsibility for generating and packaging the information.

4. Develop a network showing information flows.

5. Test the system until it meets the operational requirements, considering the
specifications stipulated for performance and the specified organizational constraints.

6. Re-check that all the critical data pertaining to various sub-systems and for the
organization as a whole are fully captured. Ensure that information is generated in a
timely manner.

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7. Monitor actual implementation of the MIS and its functioning from time to time.

1. Understand the organization

2. Analyze the information requirements of the organization
3. Plan overall strategy
4. Review
5. Preliminary analysis
6. Feasibility assessment
7. Detailed fact finding
8. Analysis
9. Design
10. Development
11. Cutover
12. Obtain conceptual schema
13. Recruit database administrator
14. Obtain logical schema
15. Create data dictionary
16. Obtain physical schema
17. Create database
18. Modify data dictionary
19. Develop sub-schemas
20. Modify database
21. Amend database

Table: Methodology for implementing MIS

MIS CRITERIA

1. Relevance.
2. Management by exception
3. Accuracy
4. Adaptability

• Relevance Information should be relevant to the individual decision-makers at their

level of management.

• Management by exception Managers should get precise information pertaining to

factors critical to their decision making.

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• Accuracy the database from which information is extracted should be up-to-date,
contextually relevant and validated.

• Timeliness The information should be provided at the time required.

• Adaptability The information system should have an in-built capability for re-design so
that it can suitably adapt to environmental changes and changing information
requirements.

STRATEGIES FOR DETERMINING MIS DESIGN

MIS design should be specific to an organization, respecting its age, structure, and
operations.

Six strategies for determining MIS design have been suggested by Blumenthal (1969):

 Organization-chart approach
 Integrate-later approach
 Data-collection approach
 Database approach
 Top-down approach

• Organization-chart approach: Using this approach, the MIS is designed based on the
traditional functional areas, such as finance, administration, production, R&D and
extension. These functional areas define current organizational boundaries and structure.

• Integrate-later approach: Largely a laissez faire approach, it does not conform to any
specified formats as part of an overall design. There is no notion of how the MIS will
evolve in the organization. Such an MIS becomes difficult to integrate. In today's
environment - where managers demand quick and repeated access to information from
across sub-systems - the integrate-later approach is becoming less and less popular.

• Data-collection approach: This approach involves collection of all data which might be
relevant to MIS design. The collected data are then classified. This classification
influences the way the data can be exploited usefully at a later stage. The classification
therefore needs to be done extremely carefully.

• Database approach: A large and detailed database is amassed, stored and maintained.
The database approach is more and more accepted for two main reasons: first, because of
data independence it allows for easier system development, even without attempting a
complete MIS; and, second, it provides management with immediate access to
information required.

• Top-down approach: The top-down approach involves defining the information needs
for successive layers of management. If information required at the top remains relatively

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stable in terms of level of detail, content and frequency, the system could fulfill MIS
requirements. The usefulness of this approach depends on the nature of the organization.
It can be suitable for those organizations where there is a difference in the type of
information required at the various levels.

• Total-system approach: In this approach the interrelationships of the basic information

are defined prior to implementation. Data collection, storage and processing are designed
and done within the framework of the total system. This approach can be successfully
implemented in organizations which are developing.

VARIOUS ADVANTAGES OF INFORMATION MANAGEMENT SYSTEM

The system provides information on the past, present and project future and on relevant
events inside and outside the organization. It may be defined as a planned and integrated
system for gathering relevant data, converting it in to right information and supplying the
same to the concerned executives. The main purpose of MIS is to provide the right
information to the right people at the right time.

The concept of management information systems was developed to counteract such in

efficient development and in effective use of the computer. The MIS concepts are vital to
efficient and effective computer use in business of two major reasons:

· It serves as a systems framework for organizing business computer applications.

Business applications of computers should be viewed as interrelated and integrated
computer – based information systems and not as independent data processing job.

· In emphasizes the management orientation of electronics information processing in

business. The primary goal of computer based information systems should be the
processing of data generated by business operations.

A management information system is an integrated man – machine systems that provides

information to support the planning and control function of manager in an organization.

· The out put of an MIS is information that subs serves managerial functions. When a
system provides information to persons who are not managers, then it will not be
considered as part of an MIS. For .example, an organization often processes a lot of data
which it is required by law to furnish to various government regulatory agencies. Such a
system, while it may have interfaces with an MIS, would not be parts of it, Instances of
such systems are salary disclosures and excise duty statements.

· Generally, MIS deals with information that is systematically and routinely collected in
accordance with a well-defined set of rules. Thus, and MIS is a part of the formal
information network in an organization. Information that has major managerial planning
significance is sometimes collected at golf courses. Such information is not part of MIS,
how ever; one- shot market research data collected to gauge the potential of a new
product does not come with in the scope of an MIS by our definition because although

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such information may be very systematically collected it is not collected on a regular
basis.

· Normally, the information provided by an MIS helps the managers to make planning
and control decisions. Now, we will see, what is planning and control. Every organization
in order to function must perform certain operations. For Example, a car manufacturer
has to perform certain manufacturing activities, a wholesaler has o provide water to its
area of jurisdiction. All these are operations that need to be done. Besides, these
operations, an organization must make plans for them. In other words it must decide on
how many and what type of cars to make next month or what commissions to offer
retailers or what pumping stations to install in the next five years.

Also an organization must control the operations in the light of the plans and targets
developed in the planning process. The car manufacturer must know if manufacturing
operations are in line with the targets and if not, he must make decisions to correct the
deviation or revise his plans. Similarly the wholesaler will want to know the impacts that
his commissions have had on sales and make decisions to correct adverse trends. The
municipal corporation will need to control the tendering process and contractors who will
execute the pumping station plans.

Generally, MIS is concerned with planning and control. Often there are elaborate systems
for information that assists operations. For example, the car manufacturer will have a
system for providing information to the workers on the shop floor about the job that
needs to be done on a particular batch of material. There may be route sheets, which
accompany the rate materials and components in their movement through various
machines. This system per se provides only information to support operation. It has no
managerial decision-making significance. It I not part of an MIS. If, however, the system
does provide information on productivity, machine utilization or rejection rates, then we
would say that the system is part of an MIS.

· Generally MIS has all the ingredients that are employed in providing information
support to manager to making planning and control decisions. Managers often use
historical data on an organization’s activities as well as current status data make planning
and control decisions. Such data comes from a data base which is contained in files
maintained by the organization. This data base is an essential component of an MIS.
Manual procedures that are used to collect and process information and computer
hardware are obvious ingredients of an MIS. These also form part of the MIS. In
summary , when we say that “ an MIS is an integrated man – machine systems that
provided information to supports the planning and control function of managers in an
origination . It does the following function.

- sub serves managerial function

- collects stores , evaluates information systematically and routinely
- supports planning and control decisions
- Includes files , hardware , software , software and operations research models.

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Effective management information systems are needed by all business organization
because of the increased complexity and rate of change of today’s business environment.
For Example, Marketing manager need information about sales performance and trends,
financial manger returns, production managers needs information analyzing resources
requirement and worker productivity and personnel manager require information
concerning employee compensation and professional development? Thus, effective
management information systems must be developed to provide modern managers with
the specific marketing, financial, production and personnel information products they
required to support their decision making responsibilities.

An MIS provides the following advantages.

1. It Facilitates planning: MIS improves the quality of plants by providing relevant

information for sound decision – making. Due to increase in the size and complexity of
organizations, managers have lost personal contact with the scene of operations.

2. In Minimizes information overload: MIS change the larger amount of data in to

summarize form and there by avoids the confusion which may arise when managers are
flooded with detailed facts.

3. MIS Encourages Decentralization: Decentralization of authority is possibly when there

is a system for monitoring operations at lower levels. MIS is successfully used for
measuring performance and making necessary change in the organizational plans and
procedures.

4. It brings Co ordination: MIS facilities integration of specialized activities by keeping

each department aware of the problem and requirements of other departments. It connects
all decision centers in the organization.

5. It makes control easier: MIS serves as a link between managerial planning and control.
It improves the ability of management to evaluate and improve performance. The used
computers has increased the data processing and storage capabilities and reduced the
cost.

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.

Strategic information is the information needed by top most management for decision
making. For example the trends in revenues earned by the organization are required by
the top management for setting the policies of the organization. This information is not
required by the lower levels in the organization. The information systems that provide
these kinds of information are known as Decision Support Systems.

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Figure: Relation of information systems to levels of organization

CONCLUSION

Management information systems do not have to be computerized, but with today's large,
multinational corporations, computerization is a must for a business to be successful.
However, management information systems began with simple manual systems such as
customer databases on index cards. Management information systems can be used as a
support to managers to provide a competitive advantage. The system must support the
goals of the organization.

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