Management Information System

Unit: 1

Understanding MIS
 Introduction to MIS

• MIS is an organized integration of hardware and software

technologies, data, processes, and human elements.

• It is a software system that focuses on the management of

information technology to provide efficient and effective
strategic decision making.

• MIS is the acronym for Management Information

Systems.

• MIS is a set of procedures which, when executed,

provides information to support decision making.
 Introduction to MIS

• It’s an integrated user-machine system for providing

information

• It is used to support the operations, management, analysis, and

decision-making functions in an organization
 Introduction to MIS

• Management: Management is the art of getting things done through

and with the people in formally organized groups.

• Information: Information is data that is processed and is presented in

a form which assists decision-making. It may contain an element of
surprise, reduce uncertainty or provoke a manager to initiate an action.

• System: A system is an orderly grouping of interdependent

components linked together according to a plan to achieve a specific
goal. The term system is the most loosely held term in management
literature because of its use in different contexts.
Management Information System
 Objectives of MIS

• Data Capturing
MIS capture data from various internal and external sources of the
organization. Data capturing may be manual or through computer
terminals.

• Processing of Data
The captured data is processed to convert into the required information.
Processing of data is done by such activities as calculating, sorting,
classifying, and summarizing.

• Storage of Information
MIS stores the processed or unprocessed data for future use. If any
information is not immediately required, it is saved as an organization
record, for later use.
 Objectives of MIS

• Retrieval of Information
MIS retrieves information from its stores as and when required by
various users.

• Dissemination of Information
Information, which is a finished product of MIS, is disseminated to
the users in the organization. It is periodic or online through a
computer terminal.
Characteristics of MIS
 Characteristics of MIS

• System Approach
The information system follows a System’s approach. The
system’s approach implies a holistic approach to the study of
system and its performance in the light for the objective for
which it has been constituted.

• Management Oriented
The top-down approach must be followed while designing the
MIS. The top-down approach suggests that the system
development starts from the determination of management
needs and overall business objectives.
 Characteristics of MIS (Continued)
• Need-Based
MIS design and development should be as per the
information needs of managers at different levels, strategic
planning level, management control level and operational
control level. In other words, MIS should cater to the specific
needs of managers in an organization’s hierarchy.

• Exception Based
MIS should be developed on the exception-based reporting
principle, which means an abnormal situation, i.e. the
maximum; minimum or expected values vary beyond
tolerance limits. In such situations, there should be exception
reporting to the decision-maker at the required level.
 Characteristics of MIS
• Future Oriented
Besides exception-based reporting, MIS should also look at
the future. In other words, MIS should not merely provide past
or historical information; rather it should provide information,
on the basis of projections based on which actions may be
initiated.

• Integrated
Integration is a necessary characteristic of a management
information system. Integration is significant because of its
ability to produce more meaningful information.
Management Information Systems – purpose
• Decision Support
• Efficiency
• Productivity
• Customer Service
• Strategic Planning
• Communication
• Compliance: MIS helps organizations ensure
compliance with legal and regulatory
requirements
 Information as a strategic resource

This information can be used to gain insights

into consumer behaviour, market trends, and
competitive intelligence, among other things

1.Competitive Advantage
2. Better Decision Making
3. Risk Management
4. Improved Efficiency
Use of information for competitive advantage

• Here are some ways in which organizations

can use information for competitive
advantage:
1. Market Research
2. Customer Relationship Management
3. Competitive Intelligence
4. Supply Chain Optimization
5. Predictive Analytics
 MIS as an instrument for the organizational change

• Process Improvement
• Data-Driven Decision Making
• Communication and Collaboration
• Strategic Planning
• Organizational Learning
CONTEMPORARY APPROACHES TO
INFORMATION SYSTEMS
 The Socio Technical Approach
The socio-technical approach in Management Information Systems (MIS) emphasizes the interaction between
social systems (such as people and organizations) and technical systems (such as hardware and software) in the
design and implementation of information systems.

1. Organizational Context:
The socio-technical approach emphasizes aligning technology with organizational objectives and ensuring that
information systems support the organization's overall strategy.

2.User Involvement:
The socio-technical approach emphasizes participatory design methods that engage users throughout the
development process, ensuring that systems meet their needs and are user-friendly.

3. Work Design:
The socio-technical approach emphasizes designing systems that fit the work requirements and capabilities of the
people using them, rather than forcing users to adapt to technology.

4. Technology Design:
This includes considering factors such as user preferences, skills, and work habits, as well as the broader
organizational culture and structure.

5. Continuous Improvement: The socio-technical approach recognizes that information systems are dynamic and
that continuous improvement is necessary to keep pace with changing technology and organizational needs. This
involves monitoring system performance, gathering feedback from users, and making adjustments as needed.
 The Behavioral Approach

a) Based on the impact of the behavior and also on the response

of the people in the organization.

b) Motivational Feasibility forms a very important and

demanding part of such an approach towards MIS development.
 The Technical Approach

Computer science

 Theories of computability
 Methods of computation
 Methods of efficient data storage and access

Management science

 Models for decision making

 Management practices
Operations research

Mathematical techniques for optimizing selected parameters of

organisations, such as transportation, inventory control, etc.
a) Based on the mathematical and the normative models.

b) Physical technology forms the back bone of such an approach.

c) Such an approach mainly finds much needed contributions

from the disciplines like computer science, management science,
operations research etc.
 Porter Millar postulates

Porter and Millar were the ones, who explained the affect of the information
technology on the competition. According to them information technology is
affecting competition in the following ways:

a) Causes changes in the structure of the industry and as a result of this, rule of
competitions is altered.

b) Spawning of the whole new business takes place, and in much of the cases
– it is caused from within the company’s existing operations.
 Advantages/Impact of MIS

• Increased customer satisfaction

• Improved quantity and quality of information
• Improved quality and quantity management decisions
• Improved responsiveness number of the competitor’s
condition
• Improved operational efficiency and flexibility
• Improved quality of internal and external communications
• Improved quality of planning
• Improved quality control and supervision
 ROLE OF MIS
• Decision making Management Information System (MIS) plays
a significant role in the decision-making process of any
organization. In any organization, a decision is made on the
basis of relevant information which can be retrieved from the
MIS.

• Coordination among the department: Management

Information System satisfy multiple need of an organization
across the different functional department.

• Finding out Problems As we know that MIS provides relevant

information about every aspect of activities.
 ROLE OF MIS
Hence, if any mistake is made by the management then MIS,
information will help in finding out the solution to that problem.

• Comparison of Business Performance MIS store all past data

and information in its Database. That why the management
information system is very useful to compare business
organization performance.

• Strategies for an Organization Today each business is running

in a competitive market. An MIS supports the organization to
evolve appropriate strategies for the business to assent in a
competitive environment.
 Information Technology – Characteristics
Information Technology (IT) refers to the use of computers, software, and
telecommunications equipment to store, retrieve, transmit and manipulate
data. IT is a rapidly evolving field that has transformed the way organizations
operate and communicate.

1. Digital
It processes and stores data in binary form (1s and 0s). This makes it easier to
store, manipulate, and transmit large amounts of data quickly and efficiently.

2. Networked
IT relies heavily on computer networks to connect devices and systems across
different locations.

3. Dynamic
New technologies, applications, and platforms are introduced regularly, and IT
professionals need to keep up with these changes to remain relevant.
4. Scalable
They can handle increasing amounts of data and traffic without
sacrificing performance.

5. Interdisciplinary

6. Ubiquitous
IT is ubiquitous, meaning that it is present in all aspects of modern
society. It is used in business, education, healthcare, government,
and entertainment, among other fields.

7. Innovative
 Information Technology emerging trends
• Cloud Computing
Cloud computing is a technology that allows users to access
computing resources over the internet, rather than through
local servers or personal devices.

• Artificial Intelligence (AI) and Machine Learning (ML)-

AI and ML are technologies that enable machines to learn
from data and make decisions based on that learning

• Internet of Things (IoT)

Network of connected devices and sensors that collect and
transmit data over the internet. E.g. smart homes, wearables,
and industrial automation
• Cybersecurity

• Blockchain
Blockchain is a distributed ledger technology that enables secure and
transparent transactions between parties. E.g. used in industries, including
finance, healthcare, and supply chain management.

• Edge Computing
Enables data processing and analysis to be done at the edge of the network,
rather than in the cloud or data center. E.g. autonomous vehicles and smart cities

• Quantum Computing
Quantum computing is a new computing technology that uses quantum bits, or
qubits, to perform calculations. Quantum computing has the potential to solve
complex problems that are beyond the capabilities of classical computers, such
as drug discovery and climate modelling.
IT Capabilities and their organizational impact
• Enterprise Resource Planning (ERP)
ERP systems integrate all of an organization's business functions into a single system

• Customer Relationship Management (CRM)

Can use it to track customer interactions, provide personalized service, and identify
opportunities for cross-selling or up-selling.

• Business Intelligence (BI):

BI systems enable organizations to analyze and interpret their data to make better-
informed decisions.

• Collaboration Tools
A company that implements collaboration tools such as video conferencing, instant
messaging, and document sharing can improve communication and collaboration
between teams, reduce travel costs, and enable remote work.

• Data Analytics
 IT enabled services
• IT-enabled services (ITES) refer to the use of information technology (IT) to deliver
services to customers.

1. Business Process Outsourcing (BPO)

Involves outsourcing business processes to third-party providers. These providers use IT
systems to perform tasks such as data entry, customer service, and accounting.

2. Knowledge Process Outsourcing (KPO)

These providers use IT systems to perform tasks such as research, analysis, and consulting.

3. Customer Service
This can include services such as live chat, email support, and social media management.

4. E-commerce
Include online marketplaces, online shopping carts, and payment gateways.

5. Telemedicine
To provide medical services remotely, such as consultations, diagnosis, and treatment.
 Transaction Processing System

• Transaction Processing System (TPS) is a type of information system

that is designed to process and manage transactions within an
organization

1. Point-of-Sale (POS) System

It is used to process sales transactions, manage inventory, and generate
reports.

2. Order Processing System

It is used to process orders, manage inventory, and track shipments.

3. Inventory Management System

It is used to track inventory levels, reorder products, and generate reports.
4. Banking System
A banking system is a type of TPS that is used to manage
banking transactions such as deposits, withdrawals, and
transfers.

5. Healthcare System
It is used to record patient data, manage appointments,
and generate reports. When a patient visits a healthcare
provider, the healthcare system records the patient's
data, updates the medical history, and generates a report.
 Transaction Processing System – Characteristics

• Speed
• Accuracy
• Security
• Consistency
• Scalability-
The system must be able to handle an increasing number
of transactions without compromising its performance.

• Availability- TPS must be available 24/7

• Data Integrity
The system must have data validation and
verification protocols to ensure that the data
entered into the system is accurate and
complete.

• Recovery
TPS must have a recovery mechanism to ensure
that the system can recover from any failures or
errors.
Transaction Processing System – importance

• Improves Efficiency
Eliminates manual processing, reduces errors, and
speeds up the transaction process.

• Supports Decision Making

Information can be used to identify trends, track
performance, and monitor inventory levels

• Enhances Customer Service

• Ensures Data Accuracy

• Facilitates Integration
Integration allows organizations to share data
across different systems, which improves
efficiency and reduces duplication of effort.

• Supports Regulatory Compliance