INTRODUCTION TO MIS

Management Information System

Chapter : 1

Management:
Management covers the planning, control, and administration of the operations of a concern.
The top management handles planning; the middle management concentrates on controlling;
and the lower management is concerned with actual administration.

Information:
Information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts arising out of the operations of the concern.
Data is processed i.e. recorded, summarized, compared and finally presented to the management
in the form of MIS report.

System:
Data is processed into information with the help of a system. A system is made up of inputs,
processing, output and feedback or control.

Thus MIS means a system for processing data in order to give proper information to the
management for performing its functions.

Definition
A Management Information System is an integrated user-machine system, for providing
information, to support the operations, management, analysis &> decision-making functions in
an organization.

In Other Words
The System utilizes computer hardware & software, manual procedures, models for analysis,
planning, control & decision making and a database

MIS
MIS provides information to the users in the form of reports and output from simulations by
mathematical models.

MIS Characteristics
1. Management Oriented/directed
2. Integrated
3. Common Data Flowst
5. Subsystem Concept
7. Flexibility & Ease of Use

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8. Database
9.Distributed Systems
10. Information as a Resource

CHARACTERISTICS OF MANAGEMENT INFORMATION SYSTEM

Management information system and top management - management information

system is a comprehensive and coordinated set of information subsystems which are rationally
integrated and which transform data information in a variety of a ways to enhance productivity in
conformity with the manager’s style and characteristics on the basis of established quality.

1. Management oriented –
 The system is designed from top to bottom. This does not mean that the system will be
geared to providing information directly to top management rather it means that the
system development starts from an appraisal of management needs and overall business
objectives it is possible that top management is the focus of the system such as their
needs cornerstone on which the system is built.
 For example- a marketing information system basic sales order processing the shipment
of goods to the customers and the billing of the goods are fundamental operation control
activities. however if the system is designed properly this transaction information can be
traced by salesman, sales territory, size of order, geography and product line.

2. Management directed –
 Because of the management information system it is imperative that management
actively directs the system development efforts to determine what information is
necessary
 To improve its control of operation it is rare to find an MISwhere the manager himself or
a high level representative of his department is not spending a good deal of time in
system design it not a non time involvement for continued review and participation are
necessary to ensure that the implemented system meets the specification of the system
that designed therefore management is responsible for setting system specification and it
must play a major role in subsequent trade off decision.

3. Integrated - integration is significant because of the ability to produce more meaningful

management information for example in order to develop an effective production scheduling
system we must balance such factors as:

A. Set up cost.
B. Work force.
C. Overtime rates.
D. Production capacity.
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E. Capital requirement
D. Customer service.

4. Common data flows - Because of the integration concept of management information

system there is an opportunity to avoid duplication and redundancy in data gathering storage and
dissemination.

5. Flexibility and ease of use –

Strategic planning

 MIS cannot be designed overnight. It requires very high degree of planning which goes
into creating an effective organization. The reason for this kind of planning is to ensure
that the MIS being built not only satisfies the information need of the managers today but
can also serve the organization for the next five to ten years with modifications.
Sometimes when the planning part is done away with, systems tend to perform well in the
present, but they tend to become obsolete with time. Planning helps to avoid this
problem.

 Despite a careful analysis of the future management information needs it is impossible to

predict what is desire there to five year. This is true in most industries and especially in
industries with rapid change patterns. And the way it is implemented and used.

6. Data base (Bias towards Centralization)–

 The data is the mortar that holds the functional system together each system requires
access to a master file. If the data is stored efficiently can provide the data needed by any
of the functional system.
 It seems logical to gather data ones, properly validate it and place it on a central storage
medium that can be accessed by any system.

7. Distributed data processing –

 The majority of the companies implementing management information system have a
geographic network of sale office, distribution channel, manufacturing plants,division
,subdivision and so on some of these entities are operated in a completely independent
fashion and therefore may not be part of the integrated MIS.
 Distributed data processing can be thought of as the delivery system, placing information
in the hands of those who need it when they need it.
8. Information as a resource –
 Providing the entire organization must be a concept that information is a valuable
resource particularly in the management control and strategic planning areas must be
properly managed.
 This is a subtle but important change in thinking. It was a common in the past to view the
data processing.

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Components of MIS
A management information system is made up of five major components namely people,
business processes, data, hardware, and software. All of these components must work together
to achieve business objects.

People – these are the users who use the information system to record the day to day business
transactions. The users are usually qualified professionals such as accountants, human resource
managers, etc. The ICT department usually has the support staff who ensure that the system is
running properly.

Business Procedures – these are agreed upon best practices that guide the users and all other
components on how to work efficiently. Business procedures are developed by the people i.e.
users, consultants, etc.

Data – the recorded day to day business transactions. For a bank, data is collect ed from
activities such as deposits, withdrawals, etc.

Hardware – hardware is made up of the computers, printers, networking devices, etc. The
hardware provides the computing power for processing data. It also provides networking and
printing capabilities. The hardware speeds up the processing of data into information.

Software – these are programs that run on the hardware. The software is broken down into two
major categories namely system software and applications software. System software refers to
the operating system i.e. Windows, Mac OS, and Ubuntu, etc. Applications software refers to
specialized software for accomplishing business tasks such as a Payroll program, banking
system, point of sale system, etc.

Management information system concept is a vital to effective computer use in business of two
or major reason:

1- It serves as a system framework for organizing business computer applications.

businessapplication of computer should be viewed as interrelated and integrated computer based
information system and not as independent data processing job.

2- It emphasized the management orientation of electronics information processing in business

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

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LEVELS OF MANAGEMENT/(Framework for understanding MIS)

The term level of management refers to a line of demarcation between various managerial
positions. The number of levels of management depends upon the size, technology, degree, of
diversity and nature of product. There are mainly three levels of management in most of the
organization. There are

1. Top level management

2. Middle level management
3. Lower level management

Top level management

 Top level consists of the board of directors, general manager and other senior executives.
 They fix the objectives of the organization. They prepare policies and takes important
decisions to accomplish the objectives of the organization.
 They issue instruction and orders to lower level management. Every organization runs by
the managers in that organization, who are taking opinion in the all step of organizational
activities.
 In a big organization the computer department responsible for giving information or data
also called management information department. In an organizational information system
is used to communicate and analyze the in every levels of the organization. In this level
decides on the board objectives of an organization.

Middle level management

 Middle level consists of head of financial departments. They are responsible to top
management.
 They are concerned with organization and direction function of management.
Interpretation of the programs and policies communicate by the top level management,
organizing and manning their departments as per the main plan, plan the departmental
operations, guide direct and motivate their workers to attain the objective, co-operate and
co-ordinate with other departments, evaluate the performance of his subordinates, collect
reports and statics from the lower and send in to top level management.
 These are the functions of middle level management. Acquire and arrange the resources
to meet the goals of an organization. In this level define the detailed tasks to be carried
out at the operational level.

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Lower level management

 Lower level management is also known as supervisory management.
 This level includes supervisors, foremen, gang boss, accounts officer, sales officer etc.
They are more concerned with direction and control function of management.
 Their functions are:- plan for a day or weak, organize the activities of his group, allot
work to the workers under him, issue instructions at the site, motivate the employees,
arrange materials, machines, tools etc. for workers, give guidance and supervise the
employees to maintain discipline and good relations with the groups.

MIS Support for Decision Making

 Structured / Programmable Decisions
 Unstructured / Non-Programmable Decisions
 Semi-Structured Decisions

MIS SUPPORT FOR DECISION MAKING

Structured / Programmable Decisions:

Decisions that are repetitive, routine and have a definite procedure for handling them.
For e.g. Inventory reorder formula, Rules for granting Credit.
Unstructured / Non-Programmable Decisions:
Non-routine decision in which the decision maker must provide judgment, evaluation, and
insights into the problem definition.
.
SIMON’S MODEL OD DECISION MAKING:

or
 Intelligence which deals with the problem identification and the data collection on the
problem.
Intelligence phase of decision-making process involves:
Problem Searching: For searching the problem, the reality or actual is compared to
some standards. Differences are measured & the differences are evaluated to determine
whether there is any problem or not.

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Problem Formulation: When the problem is identified, there is always a risk of solving
the wrong problem. In problem formulation, establishing relations with some problem
solved earlier or an analogy proves quite useful.

 Design is the process of designing solution outlines for the problem. Alternative solutions
are designed to solve the same problem. Each alternative solution is evaluated after
gathering data about the solution. The evaluation is done on the basic of criteria to
identify the positive and negative aspects of each solution.
Design which deals with the generation of alternative solutions to the problem at hand.

 Choice : It is the stage in which the possible solutions are compared against one another
to find out the most suitable solution. The 'best' solution may be identified using
quantitative tools like decision tree analysis
Choice which is selecting the 'best' solution from amongst the alternative solutions using
some criterion.

DECISION-MAKING: STRUCTURED VERSUS UNSTRUCTURED DECISIONS IN

MIS
Decisions are of varying complexity. Some decisions are routine, simple and easy to take
Knowledge about such decisions is very well known.

STRUCTURED DECISION -

 These decisions are these that can be programmed and well defined.
 They are essentially repetitive, routine and involve a defined.
 They are essentially repetitive, routine and involve a definite procedure for handling
them so that they do not have to be treated each as if they were new.
 Structured decisions are also called programmable decisions involve situations where
the procedures decisions involve situations where the procedures to follow when a
decisions are structured or programmed by the decisions procedures or decision rules
developed for them.
 A structured decision could possibly involve what is known as a deterministic decision
or an algorithmic decision.
Exp. Decision making of students results. decision about the payroll systems etc
Features of structured decision:-
 Structured decisions can be delegated.
 The cost of taking such decisions is not as high as that of unstructured ones.
 These decisions can be made with the help of computer systems.

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UNSTRUCTUREDDECISION -

 These types of decisions are occasional and unique in nature.

 There are no predefined procedures available to solve these problems and a new analysis
is required for each occurrence.
 In top level managers are usually faced with more such unstructured decision making
situations.
 They the strategic decision are non-repetitive vital and important and aim of determining
or changing the ends or means of the enterprise.
 Unstructured decisions are not simple.
 They are usually quite complex in nature. So, there is no tried and true method of
handling them.
 Unstructured decisions are those in which the decision makes must provide judgment
evaluation and insight into the problem definition.
 The risk involved in taking decisions to solve the problems in this is usually high.
 Exp. capital budgeting.

Features of unstructured decision:-

These decisions cannot be delegated.
The cost of taking such decisions is quite high. Compared to structured decisions.

FORMAL VS INFORMAL SYSTEM

Basis of Formal Organization Informal Organization

difference

Formal Organization may be defined On the other hand, informal

as such organization in which organization may be defined as such
Meaning authority, responsibility and account- organization in which authority,
ability of each member are clearly responsibility and account-ability of
defined. each member are not clearly
defined.

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Objectives The purpose or objective of Where as, the objective of

establishing formal organization is to establishing informal organization is
achieve Pre-determined goals of an just to fulfill the psychological and
enterprise. social needs of its members.

Stability Formal organization is generally On the other hand, informal

more stable in comparison to organization is not as stable as
informal organization, because it is formal organization, because it is
established according to proper rules established, in the lack of proper
and regulations for achieving certain rules and regulations.
goals.

Formal organization is gene-rally On the other hand, informal

more needful to every organization, organization is not as essential to
Need in comparison to informal every organization as formal
organization due to stability. organization due to absence of
proper suitability.

Size Formal organization is generally too On the other hand, informal

large in size, in comparison to organization is generally too small,
informal organization. in comparison to formal
organization.

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Formal organization is established on On the other hand, informal

the basis of proper rule and organization is established
Establishment regulation, where authority, spontaneously. It doesn't require any
responsibility and accountability of rules and regulation to emerge.
each member are clearly defined.

Types of In formal organization generally On the other hand, in informal

Communication written or formal communication organization generally oral or
takes place to express the orders, informal communication takes place
views and feedback etc. to express the orders, views and
feedback etc.

ANALYSIS & DESGIN OF INFORMATION SYSTEM:

Systems development is systematic process which includes phases such as planning, analysis,
design, deployment/Implementation, and maintenance.

 Systems analysis
 Systems design
Systems Analysis
It is a process of collecting and interpreting facts, identifying the problems, and decomposition
of a system into its components.

System analysis is conducted for the purpose of studying a system or its parts in order to
identify its objectives. It is a problem solving technique that improves the system and ensures
that all the components of the system work efficiently.

Systems Design
It is a process of planning a new business system or replacing an existing system by defining its
components or modules to satisfy the specific requirements. Before planning, you need to
understand the old system thoroughly and determine how computers can best be used in order to
operate efficiently.

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System Development Life Cycle (SDLC)

System Development Life Cycle (SDLC) is a conceptual model which includes policies and
procedures for developing or altering systems throughout their life cycles.

SDLC is used by analysts to develop an information system. SDLC includes the following
activities −

 requirements
 design
 implementation
 testing
 deployment
 operations
 maintenance

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Planning
 Define the problem and scope of existing system.
 Overview the new system and determine its objectives.
 Confirm project feasibility and produce the project Schedule.

Analysis and Specification

 Gather, analyze, and validate the information.
 Define the requirements and prototypes for new system.
 Evaluate the alternatives and prioritize the requirements.
 Examine the information needs of end-user and enhances the system goal.
System Design
 Includes the design of application, network, databases, user interfaces, and system
interfaces.
 Create a contingency, training, maintenance, and operation plan.
 Finally, prepare a design document which will be used during next phases.

Implementation
 Implement the design into source code through coding.
 Combine all the modules together into training environment that detects errors and
defects.
 A test report which contains errors is prepared through test plan that includes test related
tasks such as test case generation, testing criteria, and resource allocation for testing.
 Integrate the information system into its environment and install the new system.
Maintenance/Support
 Include all the activities such as phone support or physical on-site support for users that
is required once the system is installing.
 Implement the changes that software might undergo over a period of time, or implement
any new requirements after the software is deployed at the customer location.
 Maintenance and support may be needed for a longer time for large systems and for a
short time for smaller systems.

Limitationof MIS

1. Aggression - The people may hit back at the system and may even sabotage it by using
equipment incorrectly by putting incomplete information into the system or buy actual
destruction of hardware or software.

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2. Projection - It is a psychological mechanism of blaming difficulties on someone or something

else. When employees blame the management information system for problems caused by
human error or other factors unrelated to the system, projection is taking place.

3. Avoidance - It occurs when individuals defend themselves by withdrawing from or avoiding a

frustrating situation. Managers may avoid the system by ignoring its output, in favour of their
own information sources.

Questions from this Chapter

 Define MIS?
 What is Management?
 What is information?
 What is system?
 Briefly explain characteristics of MIS?
 Explain Formal vs Informal System?
 Explain Simon’s model of Decision making?
 Explain the framework for understanding MIS(Levels of Management)?
 Briefly Explain analysis and design of an information system?

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