MIS

Dire Dawa University

School of Post Graduate Studies
Department of Management
MBA Program
 Course Title: Management
Information System

Course Code:MBA 632 Crhr 2: ECTS: 3.5

Banbul Shewakena • MIS – providing support for

Assistant Professor of Financial managerial decision making.
Management
Tel; +251911617444
Telegram: +251923956937
Whatsapp; +251923956937
E; shewaj12@gmail.com
Management Information System(MIS)

Chapter one: Fundamentals of MIS

By: Banbul Shewakena (Ass. Prof. Of Financial Management)

• Management Information System is an
accumulation of 3 different terms as explained
below.
1. Management
2. Information
3. System
 Definition
• Management: We can define management in many
ways like, “Manage Man Tactfully” or Management is
an art of getting things done by others. However, for
the purpose of MIS, management comprises the
process and activity that a manager does in the
operation of their organization, i.e., to plan, organize,
direct and control operations.
• Information: Information simply means processed data
or in the layman language, data which can be converted
into meaningful and useful form for a specific user.
• System: a set of components that operate together to
achieve a common purpose.
 Definition and Importance of MIS

• The term information system usually refers to a

computer-based system, one that is designed to
support the operations, mgt, & decision functions
of an organization.
• Information systems in organizations thus provide
information support for decision makers.
• Information consists of data that have been
processed and are meaningful to a user.
 Cont’d
• A system is a set of components that operate
together to achieve a common purpose.
• The system makes possible the conversion
of data into mgt information for use by
decision makers within the organization.
– what is data
– What is Information
 What is Data?

• Raw Material
• Numbers and strings of letters with no precise
context or meaning
 What is Information?

• Data processed with knowledge

• “Data endowed with relevance and purpose”
• “Data becomes information when its creator
adds meaning”
• “An organized, meaningful, and useful
interpretation of data”
 What is Knowledge?

• “A body of guidelines and rules used to select,

organize, and manipulate data to make it suitable
for a given task”
• “An awareness and understanding of a set of
information and how that information can be put to
its best use”
• “Internalized information + the ability to utilize this
information”
Data transformed into Information

A collection of facts organized in

such a way that they have
additional value beyond the value
Information of facts themselves.

Guidelines and procedures used to

Knowledge select, organize, and manipulate data
Process
to make it suitable for a specific task.

Data Raw facts

 Data becomes Information
 Establishing
relationships between
data creates
information.

Information = Data + Relationships

Characteristics of Valuable Information
• Relevant
• Complete
• Accurate
• Current/Timely
• Economical
• Accessible
Determining the Value of Information

• Measurements
– Time saved, lower costs
– More accurate forecasts
– Improved service
• Often difficult to quantify
• Payback period?
 Cont’d
• MIS is a comprehensive & coordinated set
of information subsystems which are
rationally integrated & which transform data
into information in a variety of ways to
support operations, mgt, & decision-making
functions in an organization.
• MIS collects, transmits, processes, & stores
data on an organization's resources,
programs, & accomplishments.
 Role of information system
• information system is an important part of
the business organizations which provides
timely and accurate information to the
business managers and helps them in
taking appropriate decision.
• For the success of an information system,
it is suggested that proper planning is very
important in any information system
because without planning nothing is
possible.
 The major role of IS in business are:

1. Making Decision:
 Decision making is one of the essential
management tasks.
 Decision-making process is data - intensive.
 A manager may need various reports, business
documents, analyze and direct communication in
order to get prepared for making an effective
decision.
 Managers get informed via information systems,
oral communication and possibly in another way.
 The major role of IS in business are…

2. Strategic Information System:

 applies information technology (IT) with the
firm’s product, service, and business process to
help the organization to gain a strategic
advantage over the competition.
3. Knowledge Management System:
 Knowledge Management system is a
knowledge-based information system to support
creation. Organization & dissemination business
knowledge to employees & manager throughout
the company.
 The major role of IS in business are…

4. Operation Management:
 used to manage every day operation in an organization such
as employee monthly salary, taxes, attendance, leave
records, record income and expenses, receivables, procuring
goods and inventory management to name a few.
 focuses on an operational and managerial application in
support of business function like accounting and marketing.
5. Executive Support System:
 is a reporting tool that provides quick access to summarized
reports coming from all level of organization and departments
such as accounting, human resources, and operation.
 This system provides critical information in a wide range of
internal and external source in the easiest way to display to
manager and executives.
 The major role of IS in business are…

6.Customer interactions

 IS also helps in customer interaction. Few forms of

customer interactions based on IS that I use are ATM
machines, recharge card in mobiles, monthly bill or
registering complains in the Nepal Telecom etc.
 Thus the implication of the use of IS for customer
interaction is gaining more popularity. With online
shopping in hamro bazar, sasto deal, flipcart etc. are
some of the more successful organizations that have
used IS for customer interactions.
 The major role of IS in business are…

7. Collaboration on teams
 IS has made the world a smaller place.
 With connectivity available communication has
increased a lot.
 People can conduct meeting from different
countries through skype.
 Learning can takes place using Themes, Zoom…
 Friends and family members can keep in contact
through facebook, celebrities and even head of
states can reach out to the general people through
the use of Twitter. IS has made this possible.
 The major role of IS in business are…

8. Strategic initiatives
 IS helps in taking strategic initiatives for competition in
the market.
 For example in Nepal, NCELL a private company had
to face NTC, owned by the government, as a
competitor. It was very difficult to get a sim from NTC.
People waited in line whole day to get a sim card.
NCELL provided sim cards in every small cyber shops.
In addition various facilities like Rs. 20 loan, mms, call
recording, 4G etc. were provided by NCELL. This
increased its hold in the telecommunication market.
 Elements of IS
Data, processing, information,system
Data
• is a raw fact that needs to be processed to give
meaning or to serve a purpose.
• are symbols that will never be a complete
representation of or the same with, reality, but
they described objects, events and their
relationships incompletely.
• Consists of figures and facts that can take
different forms such as images, text, or voice that
are not currently being used in a decision process.
 Processing

 is defined as changing data from unusable

into usable form to the intended recipient
to make decisions or to alter the receiver’s
current direction. Or
 is changing raw material (data) to finished
product (information).
 Information
 is defined as a valuable processed data
that is meaningful to the receiver to make
organizational decisions.

 is a knowledge that one derives from

facts placed in the right context with the
purpose of reducing uncertainty.
 System
 A system is defined as a group of interrelated
components working together towards
attainment of a common goal by accepting
inputs & generating outputs in an organized
transformation process.
 Components of a system
 Input
 Processing
 Output
 Feedback and control: these two components are
inseparable.
• Positive feedback
• Negative feedback
• Entropy: Deterioration of the performance of a system
through time
• System equilibrium
 Why is MIS?
Three powerful worldwide changes have altered the
environment of business.
 the emergence & strengthening of the global
economy.
 the transformation of industrial economies &
societies into knowledge- & information-based
service economies.
 the transformation of the business enterprise.
 Cont’d
• MIS then is used to generate timely, accurate
& organized information for the manager &
other users. (Then what?)
• This information is used to make decision,
solve problems, supervise activities & monitor
process.
• It provides useful information for the mgt to
make important decision about the
organization.
MIS creates three types of information

1. Detailed report: It contains only transaction.

2. Summery Report: It consolidates data to review it
quickly & easily.
 It normally contains totals, tables and graph.

3. Exception Report: It identifies data outside of a

normal condition.
 This condition is called exception criteria.
 Subsystems of MIS
• An IS is a specific type of system in general.
• A system is a set of components (subsystems) that
operate together to achieve certain objectives.
• The objectives of a system are realized in its outputs.
• In particular, the objective of an IS is to provide the
appropriate outputs to the members of the
organization.
 IS consist of the following general
components
1. Hardware- a physical part of computer
• A computer contains many electric, electronic, &
mechanical components known as hardware.
• Multiple computer systems: microcomputers,
minicomputers, mainframes, together with their
peripherals.
• Computer system components are: a central
processor(s), memory hierarchy, input & output devices.
 Cont’d
Computer processor: The central processor carries
out the instructions of a program, translated into a
simple form.

Memories: Included in a computer system form a

hierarchy.
They range from the fast electronic units, such as
the main memory, to the slower secondary storage
devices such as magnetic disks.
• A central processing unit (CPU), also called a central
processor or main processor, is the electronic circuitry
within a computer that executes instructions that make
up a computer program.
• The CPU performs basic arithmetic, logic, controlling,
and input/output (I/O) operations specified by the
instructions.
• Traditionally, the term "CPU" refers to a processor,
more specifically to its processing unit and control unit
(CU), distinguishing these core elements of a computer
from external components such as main memory and
I/O circuitry
2. Software- invisible part of computer
Computer software falls into two classes: systems software &
applications software.
1. Systems Software: control & coordinate the hardware part of
the computer.
 Manage the resources of the computer system & simplifies
programming.
 An operating system is the principal system software.
2. Application Software: designed to solve specific problems.
Eg., calculator(software), dictionary, word, excel, Peach-tree
 Are programs that directly assist end users in doing their work.
They are purchased as ready-to-use packages.
 3. Databases
Data base is Data center- central data
are organized collections of interrelated
data used by applications software.
Stored & accessed electronically
Databases are managed by systems
software known as database mgt systems
(DBMS) & shared by multiple applications.
 4. Telecommunications
Telecommunications are the means of electronic
transmission of information over distances.
• Today, computer systems are usually
interconnected into telecommunications networks.
• Various network configurations are possible,
depending upon an organization's need.
• These include: Local Area Networks (LAN),
Metropolitan Area Networks (MAN) and Wide
Area Networks (WAN)
Difference between LAN, MAN and WAN
LAN stands for Local Area Network is a group of network devices
which allow the communication between connected devices. The
private ownership has the control over the local area network rather
than public. LAN has short propagation delay than MAN as well as
WAN. It covers the smallest area such as: College, School Hospital
and so on.
• MAN stands for Metropolitan Area Network. It covers the largest
area than LAN such as: Small towns, City etc. MAN connects 2 or a lot
of computers that area unit apart however resides within the same
or completely different cities. MAN is expensive and should or might
not be owned by one organization.
• WAN stands for Wide Area Network. It covers the large area than
LAN as well as MAN such as: Country/Continent etc. WAN is
expensive & should or might not be owned by one organization.
PSTN or Satellite medium are used for wide area network.
 5. Human Resources
Professional information systems personnel
include dev’t & maintenance managers,
systems analysts, programmers, & operators,
often with highly specialized skills.
• End users are the people who use
information systems or their information
outputs, that is, the majority of people in
today's organizations.
 6. Procedures-
Procedures are the policies & methods to be
followed in using, operating, & maintaining an IS.
• Specifications for the use, operation, &
maintenance of information systems, collected in
help facilities, user manuals, operator manuals, &
similar documents, frequently delivered in an
electronic form.
Contemporary Approaches to MIS
• Information systems are socio-technical systems.
• Although they are composed of machines,
devices, & "hard" physical technology, they
require substantial social, organizational, &
intellectual investments to make them work
properly.
• Since problems with information systems—and
their solutions—are rarely all technical or
behavioral, a multidisciplinary approach is
needed.
 Cont’d
• The technical approach: emphasizes
mathematically based, normative models to study
information systems, as well as the physical
technology & formal capabilities of these systems.

• The behavioral approach: a growing part of the

information systems field, does not ignore
technology, but tends to focus on non-technical
solutions concentrating instead on a changes in
attitudes, mgt & organizational policy, & behavior.
 Cont’d
• MIS combines the work of computer science, mgt
science, & operations research with a practical
orientation toward developing system solutions to
real-world problems & managing information
technology resources.

• It is also concerned with behavioral issues

surrounding the development, use, & impact of
information systems, which are typically discussed
in the fields of sociology, economics, and
psychology.
 Cont’d
• Technology must be changed & designed,
sometimes even "de-optimized," to fit
organizational & individual needs.
• Organizations & individuals must also be
changed through training, learning, & planned
organizational change to allow technology to
operate & prosper.
Cont’d
Information Systems as a Field of Study
• Information systems are a discipline of study that
is generally situated in business schools.
• The essential objective of the discipline is to
develop & study the theories, methods,& systems
of using information technology to operate &
manage organizations.
• The discipline employs a socio-technical
approach, placing the study of information
technology in the context of mgt, organizations, &
society.
How is MIS Different from Computer Science?

 Computer science focuses on the technology itself

and less on its business application.
 MIS professionals apply technology to business
needs.
 Computer science students take courses that will
help them better understand technology, like
mathematics and physics classes.
 MIS students take courses that will help them
understand business problems, like accounting and
marketing.
 FOUNDATIONAL CONCEPTS IN MIS
• A System is a group of interrelated or interacting
element forming a unit which, working towards a
common goal.
• e.g. The System of sun & planets, the system of human
body, the system of a college, the system of business
organization.
• For the field of Information Technology "A System is a
group of interrelated component working together
toward a common goal by accepting inputs and
producing output in an organized transformation
process.
 Component of an Information System

• IS is a system that accepts data resources as input &

processes them into information products as output.
• Resources: People, hardware, software, data &
networks are five basic resources of IS.
• Activities: Input, Processing, Output, Storage &
Controls.
Note: All information system uses these components to
transform raw material into information product.
 1. Information System Resource
• People Resource:

• People resources include programmer and all other

person who use computer.
• The basic purpose of any IS is to provide information
to the people.
o Specialists: Are people who develop & operate IS. They include
System Analysts, Programmers, Computer Operators, & other
Managerial, Technical & Clerical IS Personal (Workers),
o End Users: End user also called users or client- anyone else who
uses IS.
 Cont’d
• Hardware Resources: The hardware component
consists of all the physical devices used with in the IS.
• Machine: Computers, video monitors, magnetic disk
devices, printers, optical disk,
• Media: Media (tangible object on which data recorded):
Floppy disk, magnetic tape, optical disks, plastic cards, paper
forms, CD's Rom.
 Software Resources: The computer programmes used
for processing information & control hardware such as
MS-Office, payroll program, peach-tree & Windows etc.
 Cont’d
 Data Resources: Data is raw material of IS.
 Data is necessary for any IS.
 Data can take many forms, including Alphabetic, numeric,
alphanumeric data, other character that describes business
transaction.
 Any deficiency in data causes it seriously.
 For Example: Name, Address, Product descriptions,
Customer records, employee files, inventory databases.
 Network Resources: Are Networks used for data
communication and Internet to exchange information.
2. IS Activities
 Input of Data Resource: Data about business
transactions & other events must be captured &
prepared for processing by the input or data entry
activity such as recording and editing.
 End-user enter data directly into a computer system
or record data on some type of physical medium such
as paper form.
 Once entered, data may be transferred on to a
machine-readable medium such as magnetic disk,
optical disk etc. until needed for processing.
 Cont’d
 For example sales data could be captured by sales
person using computer keyboard or optical
scanning device to enter data into the computer.
 Processing of Data into Information: Data are
usually processed through calculating: computing,
sorting, organizing, analyzing, manipulating data,
thus converting data into information for end user.
 For example calculating employee's pay taxes and
other payroll deduction.
3. Output of Information Product:
• Information in various forms is transmitted to
end users and made available to them in the
output activity.
• Productions of appropriate information products
for end user as the goal of IS.
• Common information product include messages,
reports, forms, & graphics image which may be
provided by video displays, audio response,
paper report, & multimedia e.g. producing and
displaying about sales performance.
Storage of Data Resources:
• Storage is a basic system component of an IS in
which data & information are retained in an
organized manner for later use.
• Stored data are commonly organized in to fields,
records, files & database e.g. Storing record of
customer, employees & products.
• Data storage is the collective methods and
technologies that capture and retain digital
information on electromagnetic, optical or
silicon-based storage media.
Storage of Data Resources:
• Storage is a key component of digital devices, as
consumers & businesses have come to rely on it
to preserve information ranging from personal
photos to business-critical information.
• Primary storage is occasionally referred to as main
storage or primary memory. Data is held in random
access memory (RAM) & other built-in devices, such as
the processor's L1 cache.
• Secondary storage encompasses data on flash, hard disk,
tape and other devices requiring I/O operations.
Secondary storage media is often used in backup and
cloud storage.
 Control of System Performance:

 It involves measuring performance and

taking corrective decision if required.
 IS should produce feedback about its
input, processing, output & evaluated to
determine if the system is not meeting
standards.
 Cont’d
 Then appropriate system activities must be
adjusted so that proper information product is
produced for end users.
 For example a manager may discover that
subtotal of sales amount in a sales reports do
not add up to total sales.
 This might mean that data entries or processing
procedure need to be corrected.
 Types of Information System
There are two types of Information System.
A. Operation Support System.
B. Management Support System.
 A. Operation Support System
• OSS is an IS that collects, process & stores data generated by
the operations systems of an organization & produces data &
information for input in to MIS or the control of an operations
system.
• These system produce a variety of information products for
internal & external use.
• is a software component that enables a service provider to
monitor, control, analyze, & manage the services on its
network.
• These types of software applications, along with a business
support system (BSS), support most customer-facing activities,
including ordering, billing, & support.
 What is the role of OSS?
• The role of OSS in the business firms is to
efficiently process business transactions,
control industrial process, support enterprise
communication & collaboration & update
corporate database.
There are three types of Operation
Support Systems.
A.Transaction Processing System:
• This system is used to store and process day-to-
day business activities.
• Automated Teller Machine (ATM) is an example
of Transaction Processing System (TPS).
• This system processes data faster, reduce
clerical costs and improves customer service.
 Cont’d
Transaction processing system process
transaction in two ways.
a.Batch Processing: data of transactions is
accumulated over a period of time and
process periodically.
b.Real Time Processing: data are processed
immediately after a transaction occurs.
 Cont’d
B. Process Control System:
• Process control system monitor & control
physical process. e.g. a petroleum refinery
uses electronic sensors linked to computers to
continually monitor chemical process &
make instant (real time) adjustments that
control refinery process.
 Cont’d
C. Office Automation System:
• Office Automation Systems collect, process,
store and transmit information in the form of
electronic office communications.
• Office Automation System provides the facilities
to create and distribute graphics and
documents, send messages, schedule
appointment, browse the web and publish web
pages.
 Cont’d
• It enhances office communication and
productivity.
• Most important Office Automation Software
are Word Processing, Spread Sheet,
Database, Presentation, E-Mail, Web
Browser & Personal Information Mgt.
 B. Management Support System (MSS)
• MSS provides information & support for mgt
decision-making to all types of managers &
business professionals.
• More specifically, several major types of IS
are needed to support a variety of managerial
end user responsibility.
 Major categories of MSS are:
1. Management Information System (MIS):
• Management Information System is used to
generate timely, accurate and organized
information for the manager and other users.
• This information is used to make decision, solve
problems, supervise activities and monitor process.
• It provides useful information for the management
to make important decision about the organization.
 Cont’d
2. Decision Support System (DSS):
• DSS is used to analyze data and make decision.
• Different manager require different types of
information.
• DSS provides information for different type of
users according to their needs.
3. Executive Information System (EIS):
The goal of computer-based EIS is to provide top
& middle mgt with immediate & easy access to
selective information.
• It supports the strategic information needs of
executive management.
• It also provides critical information in easy-to-
use displays to executive and managers. It
present information as a chart and table.
 Summary
• Information is an increment in knowledge: it contributes
to the general framework of concepts and facts that we
know.
• Information relies on the context and the recipient's
general knowledge for its significance.
• Data are only the raw facts, the material for obtaining
information.
• Information systems use data stored in computer
databases to provide needed information.
 Cont’d
• A database is an organized collection of interrelated
data reflecting a major aspect of a firm's activities.
• Information systems capture data from the
organization (internal data) and its environment
(external data).
• They store the database items over an extensive
period of time.
• When specific information is needed, the appropriate
data items are manipulated as necessary, and the
user receives the resulting information.
 Cont’d
• Formal information systems rely on procedures
(established and accepted by organizational
practice) for collecting, storing, manipulating, and
accessing data in order to obtain information.
• Informal information systems also exist within an
organization (interpersonal networking, water
cooler gossip, etc.).
• Thank You !