MODULE III

Management Information System

Management information systems (MIS) are an organized method of collecting information from
various sources, compiling it, and presenting it in a readable format. It helps business leaders and
managers make strategic management decisions.

Functions of MIS

The primary function of MIS is to report on business operations to support decision-making and
ensure that the organization is managed more efficiently. This will help the company reach its full
potential and thus gain a competitive advantage. Listed below are some of the crucial functions of
MIS.

Provide Easy Access to the Information

MIS allows teams convenient access to marketing, financial or operational information. MIS
reports strategically storing large amounts of information about the business in a central location
that managers can easily access over a network.

Data Collection

Data from the company’s day-to-day operations are collected and combined with data from
sources outside the organization. This allows a healthy and functional relationship between
distributors, points of sale, and any other supply chain member.

Performance Tracking

As production and sales numbers are recorded and stored in a central database, MIS plays a
crucial role in keeping track of the performance of the employees. This information helps detect
issues early and make the right decisions quickly using the latest information.

Foster Collaboration in the Workplace

In any large company, many situations require the involvement of multiple people or departments
in decision-making.

MIS is an effective communication channel for the teams to collaborate and ensure that the
decision-making group has access to all the data required for effective decision-making, even if
they are working from different locations.
Company Projections

These management information systems come with trend analysis features that will allow you to
project how a business will perform in its current configuration and how it will be affected once
you have implemented the changes you are considering.

Even the ones without the trend analysis function will still offer sufficient information to carry
out the analysis accurately using external tools.

Track the Implementation of Decisions

MIS systems help to project expectations for a particular decision. If they decide to go with the
changes, it will be necessary to continue monitoring performance to see if the teams are on track
to achieve the desired results.

Improve Company Reporting

One of the reasons why large companies prefer management information systems is the
effectiveness of the reporting functions. Management can make timely decisions since MIS
reports contain information in an easy-to-understand format.

The fact that the system is accessible to people from different parts of the organization makes it
an effective communication and reporting tool. The results can be shared among colleagues with
all the necessary supplementary data.

It is also possible to create short executive summaries that summarize the entire situation for
company executives to review in situations that require their approval.

STRUCTURE OF MIS:

Structure of MIS is a difficult concept to understand because there is no standard or

universally accepted framework for describing management information system. MIS
structure may be described by following a variety of different approaches, such as:
 Physical Components
 Information system processing functions
 Decision support
 Levels of management activities and
 Organizational functions

Physical Components: Structure of MIS may be understood by looking at the physical

components of the information system in an organization.
 Hardware
  Software
 Database
 Procedures
 Operating personnel
 Input and Output

Information system processing functions:

Information system structure can also be understood in terms of its processing functions. The
functions of an MIS explain what the system does. The main processing functions of
information systems are described below.
o To process transactions: Information systems process transactions. Where transaction
may be defined as an activity taking place in an organization.
o To maintain master file: Information systems create and maintain master files in an
organization. A master file stores relatively permanent or historical data about
organizational entities.
o To produce report: Reports are significant products of an information system. Many
reports are produced on a regular basis, which are called scheduled reports. An
information system also produces reports on adhoc (special) requests.
o To process enquires: An information system is used to process enquiries. For
processing such queries, the information system uses its database. These may be regular
enquiries with a pre defined format or adhoc enquiries.
o To process interactive support application: The information system contains
applications designed to support systems for planning, analysis and decision-making.
Various types of models are used for processing.

DECISION SUPPORT:

Structure of MIS can also be described on the basis of its support in decision-making in an
organization. Decisions vary with respect to the structure that can be provided for making them. A
highly structured decision can be preplanned, whereas a highly unstructured decision cannot.
However, it should not be taken to necessarily mean that the decision is automated, although many
programmable decisions are automate.

LAVELS OF MANAGEMENT ACTIVITIES:

Management information systems support various management activities in an organization. This

implies that the structure of an information system can be categorized in terms of levels of
management activities. Anthony, on the basis of activities, has classified the management hierarchy
into three levels. These are:

 Strategic Planning Level

 Management Control Level

 Operational Control Level

Strategic Planning deals with long-range considerations.

Management Control Level includes acquisition and organization of resources, structuring of work,
and acquisition and training of personnel.

Operational Control is related to short-term decisions for current operations

ORGANISATIONAL FUNCTIONS:

The structure of management information system can also be described in terms of the
organizational functions. Though there is no standard classification of functions, a typical set of
functions in a manufacturing organization includes production, sales and marketing, finance and
accounting, materials, personnel and information systems.

Activities:
 Strategic planning
 Management control
 Operational control
 Transaction processing
Organizational Function:
 Production
 Finance
 Personnel
 MIS etc.

Role of MIS –
 Application of MIS -

MIS application in business falls into several different categories that provide information on all
forms of functioning within an organization. Executives and departments within an organization
could obtain any of the following forms of data:

 Business Intelligence System: In BI, all levels of management and executives can print data and
graphs showing information or trends relating to growth, costs, strategic control, efficiency, risk and
performance.

 Executive Information System: An EI system provides the same information as a BI system, but with
greater attention to detail and more confidential information, designed to help top-level executives
make choices that impact the entire organization.

 Marketing Information System: MI systems provide data about past marketing campaigns so that
marketing executives can determine what works, what does not work and what they need to change
in order to achieve the desired results.

 Transaction Processing System: TPS handles sales transactions and makes it possible for customers
to sort search results by size, color or price. This system can also track trends related to sales and
search results.

 Customer Relationship Management System: Keeping up with customers is key to overall success,
and CRMS helps companies know when and how to follow up with customers in order to encourage
an ongoing sales relationship with them.

 Sales Force Automation System: Gone are the days when sales teams must do everything manually.
SFA systems automate much of what must be done for orders and to obtain customer information.

 Human Resource Management System: HRM systems track how much employees are paid, when
and how they are performing. Companies can use this information to help improve performance or
the bottom line.

 Knowledge Management System: Customers with questions want answers right away and
knowledge management systems allow them to access frequently asked questions or troubleshoot
on their own timetable.

 Financial Accounting System: Financial accounting systems help to track accounts receivable and
accounts payable, in order to best manage the cash flow of a company.

 Supply Chain Management System: SCM systems record and manage the supply of finances, goods
and data from the point of origin domestically or abroad, all the way to its destination in the hands
of a customer.

ERP & IT’s Benefits –

Any business enterprise consists of number of business functions such as marketing, sales,
manufacturing, finance, inventory management, human resources etc. All these business functions
need to be managed well in order to run a business enterprise profitably. These business functions
cannot be managed in isolation; they need to be managed in an integrated way.
With size of the business enterprise increasing, it becomes more important to automate the
management of these business processes by using software systems. Traditionally each of these
functions used to have their own dedicated management software system. Each software module
will then require complex interfaces with other modules to function. This created immense
challenges in maintaining these systems individually and also did not allow the enterprise to truly get
a seamless view of all the business information in an integrated and unified manner.

In order to address some of these shortcomings, Enterprise Resource Planning (ERP) software
systems came into existence. Project Management Professional PMP Course will aid you in
understanding the ERP system.

Enterprise resource planning (ERP) is the integrated management of core business processes, often
in real-time and enabled by software and technology.

ERP is usually referred to as a category of business-management software — typically a suite of

integrated applications for each core business function—that an organization can use to collect,
store, manage, and interpret data from these many business activities in real time and use the data
for managing the business functions and also for decision making.

Available options of ERP solution

There are many ERP systems which are available in the market. ERP products which are readily
available have built in business processes by taking into consideration global best practices. This
helps organizations to get access to best practices for each business functions. ERP also allows
specific customization of business processes on a need basis.
There are many matured ERP software systems available in the industry. Some of the leading ERP
systems are being offered from SAP, Oracle, PeopleSoft, JD Edwards and many more. Some of the
business modules offered by these ERP systems include Finance, Human Resource, Inventory, Sales,
CRM, Project Management, Manufacturing, Decision Support System etc. An organization can
choose the appropriate modules they need based on their business requirements.
ERP solution implementation has been a very expensive affair in general demanding huge
investments of time and money. Traditionally ERP systems have been implemented as dedicated
monolithic systems for individual organizations. But with advent of cloud technology, ERP solutions
are also available on cloud as Platform-as-a-Service, Software-as-a-Service from these leading
vendors. This has made ERP solutions affordable now.

Advantages of ERP
The most fundamental advantage of ERP is that the integration of business processes saves time and
expense. Management can make decisions faster and with fewer errors. Data becomes visible across
the organization. Some of the business tasks become more efficient as below:

 Sales forecasting leading to inventory optimization

 History of every transaction through relevant data capture and store
 Order tracking from acceptance through fulfilment
 Revenue tracking, from invoice to cash realization
 Synchronization of purchase orders (what was ordered), inventory receipts (what arrived),
and costing (what the vendor charged)

Future of Internet –

The Virtual and Augmented Reality will become highly important - Our smartphones became our
best friends as they let us access the internet in the real world. However, the future belongs to
nexgen devices capable of creating a world where anything is possible. We already can see the
applications of Virtual Reality in forms of Oculus Rift, HTC Vive, and PlayStation VR.

Your Job May Be Taken By a Machine - Look around you, we’re already surrounded by machines
capable of doing various manual tasks. In the future, machines will be able to accomplish high-level
and intellectual tasks. The need to work could be decreased with the availability of jobs. That’s why
it’s highly important to find a balance to avoid challenges with joblessness and unbalanced resource
distribution. Nevertheless, these little drawbacks can’t minimize the importance of a richer and more
connected world.

Great Improvements in Healthcare Industry - One of the fields which would be influenced by the
internet is Healthcare. WIth micro technology development, implantable devices would become a
usual thing. Having combined them with the IoT, we’d be able to achieve outstanding results. It’d be
easy to prevent various diseases as doctors would always be alerted by these devices. They’d be
capable of collecting and processing data in real time over the internet. As a result, the population
will be healthier as never before, with a much longer lifespan.

The Full Integration of The Internet - In the future, the Internet won’t be a place where we go to
login in our social media, find funny videos with cats, or searching some information. In general, the
terms “going online” or “looking on the Internet” for something won’t exist anymore as future
technologies will be capable of creating an environment where everyone will be constantly online.A
More Comprehensive Recorder of Our Daily Life - We’ll have the big picture of how our friends,
family, or other people spend their time (if they want to share this information with us). This will
absolutely change the way we think about people, communicate with them, or establish trust. As a
result, the concepts of “failure” and “success” of communication will be inevitably changed. This
idea belongs to Judith Donath, who’s the founder of the Social Media Group at the MIT Media Lab.
Most of her life she spent writing papers about various aspects of the internet and its social impact.

Consisting of Different Networks - The Internet will consist of several networks. Some of them will
require from you a verified authentication to access. The main goal of other networks will be to
preserve your privacy and anonymity. The Internet will be the same but at the same time quite
different. The future problems with privacy, security, and cyber policy will make us connect to
separate channels controlled by a number of several protocols.