INFORMATION PROCESSING AND MANAGEMENT

CHAPTER – I

Prepared
&
Presented By
Dr. A. SURESH KUMAR
Assistant Professor
Department of Management
Bule Hora University
 MANAGEMENT INFORMATION SYSTEMS
• DEFINITION:
• A system that aids management in making, carrying out
and controlling decisions.
Jerome Kanter.
A collection of subsystems and related programme parts or
modules that are interconnected in a manner which fulfils
the information requirements necessary to plan, organize,
direct and control business activities.
• Is is a system for producing and delivering timely
information that will support management in
accomplishing its specific task in an enterprise.
• Rober J Thierauf and George W. Reynolds.
• MIS is a strategy which provides the information for
making decisions regarding the integration of the
organization through the process of management.
• Robert G. Murdick.

• MIS is an information system that facilitates management

by producing structured summarized reports on a regular
and recurring basis. The output of such are produced
routinely and used primarily for controlling activities,
although they can also be used for planning and
organizing.
• John G Burch and Gary Graandisski.

• A management information system is used to transform

data into useful information needed to support managerial
decision making with structured decisions which are
those that are based on predictable patterns of activity.
 MIS
Management Information System

• Data + Organization
• Set of formal business systems designed to
provide information for an organization
• Computers are typical components
 Data, Information,
and Systems
• Generating Information
– Computer-based ISs take data as raw material,
process it, and produce information as output.

Figure 1.1 Input-process-output

5
 Data, Information, and Systems
• Information in Context

Figure 1.2 Characteristics of useful information

 IMPORTANCE OF MIS

• MIS helps the management at various levels and it is a

means of communication where data are collected,
processed, stored and retrieved later for making
decisions regarding planning, operation and control of
an organization.
• Decision making is an important requirement in every
organization wherein there are different types of
information obtained from different functional areas of
management like finance, marketing, production,
personnel planning and control etc.
• Each of the levels of organization needs information
systems. The specific needs vary from level to level.
• Information systems exist, because they provide
organizations with a competitive advantage. Information
systems are the key to the organizations’ ability to provide
greater and better quality service.
Example:A manufacturing Organization.

Layer – 3: The non – programmed decision making

processes are found here that are required to design and
redesign the entire system, to provide it with its basic goals
and objectives and to monitor its performance.
• Layer – 2: It has the programmed decision making
processes. The processes that govern the day – to – day
operations of the manufacturing and distribution system.
• Layer – 1: Here, the processes procure raw materials,
manufacture the physical product, store them in warehouses
and ship it.
 EVOLUTION OF MIS
• Information system is as old as recorded human history. In the
third millennium BC, the earliest use of information system
discovered was in a Sumerian temple.
• The Sumerians used clay tablets for recording receipts and issues
of grains to individuals, out of the temple grain store. The data
storage requirement was little in those days.
• Information system moved fast towards the growth track in the
last few centuries. The industrial revolution gave it a big fillip.
Thereafter, business started growing and along with growth,
business complexity also increased.
• More commercial legislations were enacted to bring control over
business and industry. Accounting systems, organization size,
development of computing technology among others have
ensured the fast growth of information systems during the last
few centuries.
• When all businesses were mostly local and small in
operations, a single individual performed all activities on
his own. There was practically no need for record-keeping.
He knew how much of stock he had, how much surplus he
had made etc.
• But over few years, business grew in size and complexity;
from sole trading firms to global corporations, from one or
two commodities to several thousand products, from
localized operations to global operations, with production
facilities and wide marketing in many countries.
• The chief executive of such a big corporation has to depend
on reports, mostly periodic paper report, for information. It
is impossible for him to visit all his corporation’s facilities,
plants and warehouses etc. and observe things for himself.
 The evolution of MIS, and its fast growth in the
last few decades, can be attributed to the following
factors:
• Growth of management theory and techniques.
• Growth of management accounting and its applications
in business.
• Changes in the production and distribution methods
and the consequent changes in the organizational
structure.
• Development of management science (Operations
Research).
• Introduction of computer into business data processing
and the developments in information technology,
especially in communication line.
• Another notable contribution to MIS came from
Management Science, which is the application of
mathematical and statistical tools, and technique
solving problems.
• This emerged at the time of World War – II, when
many statistical tools were designed, tested and
successfully employed in military warfare, since then,
it has astronomical growth in the present century.
• Growth in computing technology made modern MIS
possible. The speed, accuracy and the relevant facility
in computers, also made it a pivot in modern MIS.
Revolutionary changes are also taking place in
Information Technology, which facilitated rapid
growth of MIS.
Evolution of Various Computer Based Information Systems
1. Electronic Data Processing Systems (EDP) 1950s – 1960s.
• (Including transaction processing, record keeping, accounting and other EDP
applications)
2. Management Reporting Systems 1960s – 1970s.
• Management Information Systems (MIS) (Management reports of pre-specified
information to support decision making)
3. Decision Support Systems 1970s – 1980s
• Decision Support Systems (DSS) (Interactive and ad hoc support of the
managerial decision making process)
4. Strategic End User Support Systems 1980s – 1990s
• End User Computing Systems (Direct computing support for end user
productivity and work group collaboration)
• Executive Information Systems (EIS) (Vital information for top management)
• Expert Systems (Knowledge based expert advice for end users)
• Strategic Information Systems (SIS) (Strategic products and services for
competitive advantage)
5. Enterprise and Global Internet Working 1990s – 2000s
• Internet worked information system.
 CHARACTERISTICS OF MIS
The characteristics of MIS are as follows:
1. MIS is Management Oriented:
• The design of MIS takes care of the managers, who
meet the information requirements. The development
of the system starts after deciding the management
needs and keeping in view the overall objectives of
the management.
2. Management Directed:
• Since, MIS requires heavy planning and investment,
management is deeply involved in the design,
implementation and maintenance of the system.
3. Integrated System:
• 5 Ms – Men, Money, Material, Machines and Methods
are the basic resources of management and is recognized
as an important factor and its effective use contributes to
the success of the management. MIS is the “Catalyst and
Nerve Centre” of an organization. It has a number of
subsystems. In order to make these subsystems effective,
it becomes necessary that they have to be viewed as an
integrated system, so that the result is balanced.

4. Avoids Redundancy in Data Storage:

• Since, MIS is an integrated system, it avoids
unnecessary duplication and redundancy in data
gathering and storage.
5. Common Data Flow:
• To achieve the objective of integration and to avoid
duplication and redundancy in data gathering, storage and
retrieval, data capturing is usually confined to original
sources and it is doe only once. Common data flow tries to
utilize minimum data processing effort and strives to
minimize the number of output documents and reports. This
type of integration can avoid duplication, simply operations
and produce an effective MIS.
6. Heavy Planning Element:
• Design and implementation of MIS require detailed and
meticulous planning of such activities as acquisition and
deployment of hardware, software, human ware, data
processing operations, so that effective implementation of
each subsystem is possible at a time.
7. Subsystem Concept:
• MIS gives provision for breaking into various
subsystems based on the activity as well as the
functions of the organization, so that effective
implementation of each subsystem is possible at a
time.
8. Common Database:
• It acts as a master that holds the functional subsystems
together. It achieves this aim by allowing access to
different master files of data to several functional
subsystems. Data requirements for different levels of
management also support the need of more than one
database, unique database and common database.
9. Flexibility and Ease of Use:
• MIS has been designed flexible enough to
accommodate new requirements. The system is easy
to operate so that not much computer skills are
required on the part of the user to access database for
information or for carrying out special analysis of
data.
10. Computerization:
• MIS can be computerized because of its nature as a
comprehensive system. This provides speed in
creating and accessing files, accuracy, consistency in
data processing, reduction in clerical work, avoid
human errors etc.
 FUNCTIONS OF MIS
• Management information system is a combination of computers and
procedures for providing information that managers use in making
decisions.
• Collect Data:
• Data pertinent to the operations of the organization are gathered
from both external and internal sources. Massive amount of information
available to organizations personnel record, information about customers,
information about competitors, sales, accounting data and so on. The first
function of MIS is to determine the information needed to make decisions
and to organize it into a database. A ‘Data Base’ is an integrated collection
of data stored in one place for efficient access and information processing.
Data can be obtained from different sources, within and outside the
organization.
• Generally, most of data collected for an MIS come from internal
sources such as company records or reports and information compiled by
managers themselves. External sources include publications, customers
and consultants.
Store and Process Data:
• The above data is inputted and stored in databases. After
creation of data, a database must be stored and processed in
a form useful to managers. Data are generally stored on
magnetic tape or hard disks. And this data is transformed
into useful information through the application of computer
software programs and judgments made by technical
support staff and other system users.
Presents Information to Managers:
• After creation of data, storing and processing data, the
next step is to present the information to managers for their
use. This useful information is retrieved as needed by the
management and technical personnel and applied to a wide
variety of decisions related to the conduct of organizational
operations.
MIS depends upon the following components:
1. Physical Components
• Hardware
• Software
• Database
• Procedures
• Operating Personnel
2. Processing Functions
• Process Transactions
• Maintain Master Files
• Produce Reports
• Process Inquiries
• Process Interactive Support Applications.
3. Outputs for Users
• Transaction documents or screens
• Preplanned reports
• Preplanned Inquiry Responses
• Ad-hoc Reports and Inquiry Responses
• User Machine Dialog Results.
 SUB SYSTEMS OF INFORMATION
SYSTEM
The sub systems of information systems can
be categorized into two groups. That are. –

INFORMATION SYSTEMS

MANAGEMENT SUPPORT SYSTEMS OPERATIONS SUPPORT SYSTEMS

MIS DSS EIS PCS TPS ECS

MANAGEMENT SUPPORT SYSTEMS: (MSS)
• Providing information and support for effective
decision making by all types of managers and
business professionals is a difficult task and
applications when it is focused on the above are
called “Management Support Systems”.

• MSS is an information system that provides

information to support managerial decision
making.
• MSS is divided into three types. Those are:
Management Information System (MIS)
• It provides information in the form of reports and
displays to managers and many business professional
to support business decision making.
Decision Support System (DSS)
• It provides interactive and ad-hoc support for the
decision making process of managers and other
business professionals.
Executive Information System (EIS)
• It provides critical information from many sources
tailored to the information needs of executives.
OPERATIONS SUPPORT SYSTEMS: (OSS)
• Information systems needed to process data generated
by and used in, business operations are “Operations
Support System”.

• OSS collects, processes and stores data generated by

the operations systems of an organization.

• And produces data and information for input into a

MIS or for the control of an operations system.
• Operation support systems are three types. That are:
Transaction Processing System (TPS)
• TPS record and process data resulting from business
transactions. Transactions are processed in two basic
ways.
Online Batch Transaction Processing
• In this transactions data are accumulated over a
period of time and processed periodically.
• Eg: Bank Transaction Processing.
Online Real-time Transaction Processing
• In this data are processed immediately after a
transaction occurs.
• Eg: Retail Store Processing.
Process Control System (PCS)
• PCS monitor and control physical processes.
• Eg: Petrol Refinery, Steel Factory.
Enterprise Collaboration System (ECS)
• ECS enhance team and work group communications
and productivity. It is also known as Office
Automation System.
• Eg: Video Conferencing, Intercom, E – Mail, etc.
 CONTEMPORARY APPROACHES TO
INFORMATION SYSTEMS

The study of information systems deals with issues and insights contributed
from technical and behavioral disciplines.
 Technical approach emphasizes mathematically based, normative models to
study information systems, as well as the physical technology and formal
capabilities of these systems.
• The disciplines are involved are:
i. Computer Science, which is concerned with
• Establishing theories of computability.
• Methods of computation. And
• Methods of efficient data storage and access.
ii. Management Science deals with
• The development of models for management practices.
iii. Operations Research, which is concerned with
• Mathematical techniques and models for optimizing selected parameters of
organizations such as Assignment, Transportation, Inventory Control and
Transaction costs.
 Behavioral approach is a growing part of the information systems
field concerned with behavioral problems and issues. It can be system
utilization, implementation and creative design totally different from
technical approach.
• The disciplines involved are:
i. Sociology focuses on the impact of information system on
• Groups
• Organization and
• Society
ii. Political Science investigates the political impacts and uses of information
systems.
iii. Psychology is concerned with
• Individuals responses to information systems
• Cognitive models of human reasoning.
• The behavioral approach does not ignore technology. Information systems
technology is the stimulus for a behavioral problem. It concentrates rather
on changes in attitudes, management and organizational policy and
behavior.
 INFORMATION TECHNOLOGY CONCEPTS
• Information technology (IT) is the technology in modern computer
– based information systems, which portrayed as a major force for
organizational and managerial change.
• It is already changing decision making, management structures and
work activities in companies around the world. IT is the
combination of the hardware, software, telecommunication,
database management and other information processing
technologies used in computer – based information system.
• Advanced in personal computing, hardware and software package,
telecommunications, database processing, office automation
systems, decision support system, executive information systems
have been responsible for this development.
• The people, tasks, technology, culture and structure of an
organization affect how it will organize the delivery of information
systems technology.
• Today’s micro processors can put mainframe on a desktop, and
eventually into a briefcase or shirt pocket.
• The future will be such where more intelligence is built into
everyday devices with mainframe and perhaps even super
computer like computing power packed in a pocket or notebook
sized computer. Pen, notebook and palm top computers have
already been as pervasive as hand held calculators.
• Computers on a chip will help guide automobiles, military
weapons, robots and everyday household devices.
• Computers and related information technologies will blend
data, images and sound, sending them through vast networks
that can process all of them with ease.
• Computer technology is so powerful and already integrated into
daily experienced, it would appear essentially invisible to the
user.
Multimedia:
• Another evolving set of technologies for
systematically managing graphics, drawings and
photographs – in addition to text and data are
multimedia data management systems. Some of
these are called “Hyper media systems”.
• These systems use computers and information
technology to incorporate text, data, graphics,
video and audio within a single application.
• Multimedia are the technologies that facilitate the
integration of two or more types of media such as
text, graphics, sound, voice, full motion video, or
animation into a computer based application.
• Since 1990s, multimedia has become the
foundation of new consumer products and
services, such as electronic books, news papers,
electronic class room presentation technologies,
full motion video conferencing, imaging,
graphics design tools and video electronic and
voice mail.
• Multimedia databases and applications are
rapidly growing in popularity. The user can
obtain data and information about an entry in a
variety of formats, including text, data, still
photos and audio and video clips.
Interleaving Techniques:
The following are the interleaving techniques.
• Multiprogramming
• Multitasking
• Time sharing
• Virtual memory
• Multiprocessing
1. Multi Programming:
• It is used in multiuser operations, is a process in which the computer works on
two or more programs concurrently. It will work on one program for a while,
switch to another program, they third program and so on.
2. Multi Tasking:
• It refers to the operating system’s ability to execute two or more of single user’s
task concurrently. Single user operating systems are traditionally the most
common type of micro-computers.
• It allows the user to work on one task at a time whereas for micro – computers,
multi – task operating system provides single users with multi programming
capablilities.
• Eg: Windows, Linux etc.
3. Time Sharing:
• Time sharing is a very popular technique, which allows a CPU to
simultaneously support activities of several terminal users. It allocates small,
fixed time slot to users at the terminal as their jobs are being processed.
• The computer moves so rapidly from one user’s work to another that each
user feels as though he has exclusive user of the computer system. It is also
known as “Time Slicing”.

4. Virtual Memory:
• Programs stored on disk are broken up into fixed length pages. When a
program is under process, the first few pages of it are brought into primary
memory. Then, the computer starts processing the program. If the computer
wants a page it doesn’t have, it brings that page in from secondary storage
and overwrites it on to the memory location occupied by a page it no longer
needs.
• Virtual memory thus allows programs to be broken into smaller parts, and
then allows only certain parts to be in main memory at any one time. Hence,
it enables computers to get by with less main memory than usual. During
page swapping in multi – programming environments, the system may switch
to other programs and tasks.
5. Multi – Processing: (Parallel Processing)
• It refers to the use of two or more CPUs linked together, to
perform coordinated work simultaneously.
• Multi – processing involves handling several parts of the
same program simultaneously on several CPUs. Since,
several machines can work as a team and operate in
parallel, jobs can be processed much more rapidly than a
single machine.
• These systems have long been viewed as tools exclusively
for scientist, R and D engineers. Parallel processors are
ideal where high speeds are needed.
• It is a type of processing in which more than one instruction
can be processed at a time by breaking down a problem into
smaller parts and processing them simultaneously with
multiple processors.
 The Role of Information Systems in
Organization
• The Widening Scope of Information Systems
– Growing interdependence between business strategy, rules,
and procedures on one side and information systems soft.,
hardware, databases, and telecommunications on the other.
– 2nd change in relationship of information system and
organizations results from the growing complexity and
scope of system projects and applications.
• The Network Revolution and the Internet
– Information systems play important role because of soaring
power and declining cost of computer technology.
– The most widely used network is the Internet.
– The Internet is extremely elastic.
– It is creating new universal technology platform.
 The New Role of Information Systems in Organization Cont..

– World Wide Web is a system with universally accepted standards for

storing, retrieving, formatting, and displaying information.
– All Web pages maintained by an organization or individual are called
Web site.
• New Options for Organizational Design: The Networked
Enterprise
– The growth in computing power and networks is turning
organizations into networked enterprises.
– This capability can be used to redesign organizations,
transforming their structure, scope of operations, reporting
and control mechanisms, work practices, work flows,
products, and services.

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The New Role of Information Systems in Organization Cont..

– Flattening Organizations
• Large, bureaucratic organizations, which developed before the
computer age, are often inefficient, slow to change, and less
competitive.
• Flatter organizations have fewer levels of management, with lower
level employees being given greater decision-making authority.
• More information available to line workers so they can make
decisions previously made by managers.
• The management span of control also been broadened. This means
managers can manage and control more workers spread over
greater distances.

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The New Role of Information Systems in Organization Cont..

– Separating work from location

• It is possible now to organize globally while working locally.
• Many workers can work remotely from their homes or cars
• Collaborative teamwork across thousands of miles is a reality.
• Companies can coordinate their geographically distributed
capabilities and coordinate with other organizations (virtual
organization).
– Reorganizing work flows
• Electronic work flows have reduced the cost of operations in many
companies by displacing paper and the manual routines.
• Improved work-flow management has enabled corporations to cut
costs significantly and improve customer service.
• Redesigned work flows have a profound impact on organizational
efficiency.

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The New Role of Information Systems in Organization Cont..

– Increasing flexibility of organizations

• Using communication technologies organize the company into
more flexible ways, increase their ability to respond to changes,
and take advantage of new opportunities.
• Small organizations use IS to have the power of large companies.
• Large organizations use information technology to achieve the
responsiveness of small organizations (mass customization).
– The changing management process
• Information technology provides powerful new capabilities to help
managers plan, organize, lead, and control.

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The New Role of Information Systems in Organization Cont..

• Many companies now use IT for enterprise resource

planning (ERP), which integrates all facets of the
business, including planning, manufacturing, sales, and
finance so they become closely coordinated.

– Redefining organizational boundaries

• Networked IS enable transactions to be exchanged
electronically among different companies.
• Systems linking a company to its customers,
distributors, or suppliers are termed Inter-
organizational systems.

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 The New Role of Information Systems in Organization Cont..

– Electronic Commerce and Electronic Business

– The previous changes created new ways of conducting
business
Electronic market is an information system that links
together buyers and sellers to exchange information,
products, services, and payments.
– They are like middlemen to facilitate the transactions.
– Vast array of goods and services are advertised, bought,
and exchanged worldwide using Internet.
– Web also increases the use of business-to-business
transactions.

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The New Role of Information Systems in Organization Cont..

Electronic commerce is the process of buying and selling

goods and services electronically. It also encompasses
activities supporting those market transactions, such as
advertising, marketing, customer support, delivery, and
payment. It then accelerate all facets of business
transactions while reducing operating and inventory costs.
– Internet technology is being increasingly used to facilitate
the management of the rest of the business (policies,
account balances, production plans, scheduling plant
maintenances, etc.).

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The New Role of Information Systems in Organization Cont..

Intranet is the internal network based on Internet and

WWW technology and standards.

Electronic business is the use of the Internet and other

digital technology for organizational communication
and coordination and the management of the firm. It
extends the reach of existing management (e-mail, web
documents, work-groups soft., group scheduling, etc.).

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The New Role of Information Systems in Organization Cont..

The strategic business challenge:

The power of computation and communication has
grown rapidly. To stay competitive, many
organizations need to be redesigned.
The globalization challenge:
International trade is a reality. Given lang., cultural,
and political differences among countries, this
focus resulted in a failure of central management
control. Hence, global hardware, software are
needed.
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The New Role of Information Systems in Organization Cont..

The information architecture challenge:

The new technology rearranges social relations in the office
and work locations, and changes reporting patterns, and
therefore redesigns the organization.
• New information architecture is the particular form information
technology takes in an organization to achieve selected goals or
functions. It is the specific design for the business application
systems.
• The platform for it is information technology infrastructure. It is
the set of computer hardware, software, network, and human
resources required to operate the equipment.
• Even under best situations, combining the knowledge of different
systems is a demanding task because of the incompatibility.

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 The New Role of Information Systems in Organization Cont..

 The information systems investment challenge:

The challenging is not to use the technology and inexpensive
computers but, however, management and organization. Is this
investment pays off? Are we getting return as expected? Do
competitors get more?
 The responsibility and control challenge:
The systems are essential for business if they are accurate, reliable
and secure. It is disastrous if system deliver info in an
interpretable form. Fraud, abuse and destruction chances are
enormous.
• IS today creates today many opportunities and also it is a
source of problems, issues, and challenges for managers.
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