403 - MANAGEMENT INFORMATION SYSTEM

UNIT – 1

Management Information System (MIS)

A management information system (MIS) is a set of systems and procedures
that gather data from a range of sources, compile it and present it in a readable
format. Managers use an MIS to create reports that provide them with a
comprehensive overview of all the information they need to make decisions
ranging from daily minutiae to top-level strategy. Today's management
information systems rely largely on technology to compile and present data, but
the concept is older than modern computing technologies.
The three components of MIS provide a more complete and focused definition,
where System suggests integration and holistic view, Information stands for
processed data, and Management is the ultimate user, the decision makers.
Management information system can thus be analyzed as follows −
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:- “Management Information System or 'MIS' is a planned system of
collecting, storing, and disseminating data in the form of information needed to
carry out the functions of management.”
Objectives of MIS
The goals of an MIS are to implement the organizational structure and dynamics
of the enterprise for the purpose of managing the organization in a better way
and capturing the potential of the information system for competitive advantage.
Following are the basic objectives of an MIS −
 Capturing Data − Capturing contextual data, or operational information
that will contribute in decision making from various internal and external
sources of organization.
 Processing Data − The captured data is processed into information
needed for planning, organizing, coordinating, directing and controlling
functionalities at strategic, tactical and operational level. Processing data
means −
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
 Information Storage − Information or processed data need to be stored
for future use.
 Information Retrieval − The system should be able to retrieve this
information from the storage as and when required by various users.
 Information Propagation − Information or the finished product of the
MIS should be circulated to its users periodically using the organizational
network.
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.
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.
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.
Scope Of MIS
1.Computer science
2. Accounting
3. Management
4. Operation Research
5. Behavioural Science

Role of MIS
A management information system (MIS) plays an important role in business
organizations.
What is MIS role: There are many roles of MIS and some of the important MIS
role are discussed below:
 1. Decision making
2. Coordination among the department
3. Finding out Problems
4. Comparison of Business Performance
5. Strategies for an Organization
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. 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.
Challenges of MIS
What is MIS Challenges: There are three major challenges of MIS: high cost,
training of employees and maintenance cost. These are briefly discussed below:
1. High Cost
2. Training of Employee
3. Maintenance Cost
High Cost
Development of new computerized based information system is a problem for
the organization due to the cost factor and it creates problems because with the
change of time there is need of up-to-date of the information system.
Training of Employee
Employees should have the capacity of learning of the information system with
the changing competitive and business environment; otherwise it will be
difficult for the organization to stay in the market.
Maintenance Cost
Sometimes a problem arises due to server crash and website crash. Sometimes it
leads to the loss of information. So, maintenance cost is needed to tackle the
above problem.
 Impact of the Management Information System
The impact of MIS on the functions is in its management.  With a good MIS
support, the management of marketing, finance, production and personnel
becomes more efficient, the tracking and monitoring the functional targets
becomes easy. The functional managers are informed about the progress,
achievements and shortfalls in the activity and the targets. The manager is kept
alert by providing certain information indicating the probable trends in the
various aspects of business. This helps in forecasting and long-term perspective
planning.  The manager'' attention is brought to a situation which is exceptional
in nature, inducing him to take an action or a decision in the matter. A
disciplined information reporting system creates a structured database and a
knowledge base for all the people in the organization. The information is
available in such a form that it can be used straight away or by blending and
analysis, saving the manager's valuable time.
The MIS creates another impact in the organization which relates to the
understanding of the business itself. The MIS begins with the definition of a
data entity and its attributes. It uses a dictionary of data, entity and attributes,
respectively, designed for information generation in the organization. Since all
the information systems use the dictionary, there is common understanding of
terms and terminology in the organization bringing clarity in the communication
and a similar understanding of an event in the organization.
 The MIS calls for a systemization of the business operations for an effective
system design. This leads to streamlining of the operations which complicate
the system design.  It improves the administration of the business by bringing a
discipline in its operations everybody is required to follow and use systems and
procedures. This process brings a high degree of professionalism in the business
operations.
Since the goals and objective of the MIS are the products of business goals and
objectives, it helps indirectly to pull the entire organization in one direction
towards the corporate goals and objectives by providing the relevant
information to the people in the organization.
 Conversion of manual MIS into computed MIS
A well designed system with a focus on the manager makes an impact on the
managerial efficiency.  The fund of information motivates an enlightened
manager to use a variety of tools of the management. It helps him to resort to
such exercises as experimentation and modeling. The use of computers enables
him to use the tools and techniques which are impossible to use manually. The
ready-made packages make this task simpler. The impact is on the managerial
ability to perform. It improves the decision making ability considerably.
Difference Between Manual And Computerised Information System MIS stands
for Management Information Systems: the software and hardware that meaning
that a business would fail if it had to go back to manual accounting. Manual and
Computerized Information Systems. An information system can be: E-
commerce: Any business transaction. Data processing is simply the conversion
of raw data to meaningful information through a process. Input is the task where
verified data is coded or converted into. Introduction to Computer Information
Systems/Information Systems. From Wikibooks, open books for an open world
Introduction to Computer Information Systems. Jump to navigation Jump to
search. As well as to convert printed documents into electronic form so they can
be processed or archived electronically.
There's a thing about technology that's easy to forget: You don't always need to
use it. You can still buy your groceries from a list on a notepad, you can still get
where you're going with a paper map instead of a GPS and you can keep your
company's books in actual books instead of an accounting program. It may seem
counterintuitive, but for many small businesses, a manual accounting system is
the practical, pragmatic option.

Ease of Setup and Entry

A traditional manual system would typically use one ledger each for
receivables, payables and sales, and then consolidate those figures into one
general ledger. You can either set them up yourself or have a bookkeeper do it
for you, but either way, it can be done in an afternoon. Once everything is
ready, you just need to sit down at closing time to enter the day's transactions,
or – if you prefer – sit down the next morning to enter the previous day's
transactions.
A computerized system can take longer to set up, although your accountant
probably does it on a regular basis and can tweak a standardized set of accounts
to fit your business's needs. Once the accounts are set up, you'll need to either
learn how to use the software or hire someone who's got experience with it.
Paper ledgers can potentially get you up and running more quickly, which is a
small win for manual systems.
Transparent Error Correction
You can make a case for either manual or computerized systems when it comes
to fixing errors in your books. With a paper ledger, you'll be able to simply
erase and overwrite any inaccurate entries, or cover them with correction fluid.
It's quick, it's easy and the corrections are self-evident. Computerized
accounting systems don't show physical corrections and erasures like paper
ledgers do, so instead, they have built-in safeguards to create an audit trail from
any changes. That can make corrections more time-consuming, but it means
you'll have a solid paper trail.
Everything at a Glance
Generating informative reports and graphs is one of the strengths of
computerized accounting, but creating those reports and graphs isn't always the
simplest process. With a paper ledger, remembering how to conjure up the
figures you need is never a problem. Just open the appropriate ledger to its
current page, and the numbers are right in front of your eyes. For a small
business with modest numbers of transactions, a manual system can be simpler,
but as you grow, you'll appreciate the more powerful reporting features of a
software-based system.
Data Security and Access
How long has it been since you last read a news story about a company's data
being stolen or compromised? A day? A week? If your accounting systems are
connected to the internet, they're vulnerable to hacking, and even standalone
computers can fail. Unless you back up your data diligently, either to other
computers or the cloud, you could be in real trouble.
Paper ledgers can be less problematic. Data security is a simple matter of
locking them up at night in a fireproof and waterproof safe, though it's still
prudent to keep a second set of books in a separate location in case of a natural
disaster or another catastrophe. That gives a slight security advantage to manual
systems – you'll never get hacked – but with computerized systems, you'll have
access to your accounting data even when you're on the road, which is a major
advantage of automation.

UNIT – 2
Types of MIS
Transaction Processing System (TPS)
Transaction processing systems are used to record day to day business
transactions of the organization. They are used by users at the operational
management level. The main objective of a transaction processing system is to
answer routine questions such as;
 How printers were sold today?
 How much inventory do we have at hand?
 What is the outstanding due for John Doe?
By recording the day to day business transactions, TPS system provides answers
to the above questions in a timely manner.
 The decisions made by operational managers are routine and highly
structured.
 The information produced from the transaction processing system is very
detailed.
For example, banks that give out loans require that the company that a person
works for should have a memorandum of understanding (MoU) with the bank.
If a person whose employer has a MoU with the bank applies for a loan, all that
the operational staff has to do is verify the submitted documents. If they meet
the requirements, then the loan application documents are processed. If they do
not meet the requirements, then the client is advised to see tactical management
staff to see the possibility of signing a MoU.
Examples of transaction processing systems include;
 Point of Sale Systems – records daily sales
  Payroll systems – processing employees salary, loans management, etc.
 Stock Control systems – keeping track of inventory levels
 Airline booking systems – flights booking management
Executive Support System
An Executive Support System (ESS) is software that allows users to transform
enterprise data into quickly accessible and executive-level reports, such as those
used by billing, accounting and staffing departments. An ESS enhances decision
making for executives .ESS is also known as Executive Information System
(EIS).
Executive support systems are handled by the senior most managers directly in
giving support to the non-programmed decisions in strategic management. It
helps in giving support the internal and external information which are set for
organizational goals.
These information found to be often external, unstructured and even uncertain.
The context of such information provided cannot be known beforehand.p
This information is intelligence based:
 Market intelligence
 Investment intelligence
 Technology intelligence
Examples of Intelligent Information
 External databases
 Technology reports like patent records etc.
 Technical reports from consultants
 Market reports
 Confidential information about competitors
 Speculative information like market conditions
 Government policies
 Financial reports and information.
Enterprise Systems
An Enterprise Management System (EMS), also known as Enterprise Systems,
is an application software package that helps organizations to manage various
software tasks and achieve their software needs in real-time. The software is
customized based on an organization’s needs. If you operate a large business,
investing in EMS can help you manage your business smoothly and achieve
your goals.
Customer Relationship Management
This software helps an organization with managing interactions with customers.
Its ultimate goal is to connect brands to existing and potential customers,
process data, gather customer details, streamline processes, decrease the time
used by employees on various tasks and grow businesses.
Supply Chain Management
Managing the supply chain is a challenging task that requires the right tools and
resources. Using a supply chain management system helps an organization
manage data, finances, and the flow of product or service delivery to the end-
user. It helps an organization monitor the entire process, from purchasing raw
materials to product delivery.
Supply chain management is the systemic, strategic coordination of the
traditional business functions and tactics across these business functions - both
within a particular company and across businesses within the supply chain- all
coordinated to improve the long-term performance of the individual companies
and the supply chain as a whole.
In a traditional manufacturing environment, supply chain management meant
managing movement and storage of raw materials, work-in-progress inventory,
and finished goods from point of origin to point of consumption.
It involves managing the network of interconnected smaller business units,
networks of channels that take part in producing a merchandise of a service
package required by the end users or customers.
With businesses crossing the barriers of local markets and reaching out to a
global scenario, SCM is now defined as −
Design, planning, execution, control, and monitoring of supply chain activities
with the objective of creating net value, building a competitive infrastructure,
leveraging worldwide logistics, synchronizing supply with demand and
measuring performance globally.
SCM consists of −
 operations management
 logistics
 procurement
 information technology
 integrated business operations
Objectives of SCM
 To decrease inventory cost by more accurately predicting demand and
scheduling production to match it.
 To reduce overall production cost by streamlining production and by
improving information flow.
 To improve customer satisfaction.

 Knowledge Management System

A knowledge management system comprises a range of practices used in an
organization to identify, create, represent, distribute, and enable adoption to
insight and experience. Such insights and experience comprise knowledge,
either embodied in individual or embedded in organizational processes and
practices.
Purpose of KMS
 Improved performance
 Competitive advantage
 Innovation
 Sharing of knowledge
 Integration
 Continuous improvement by −
o Driving strategy
o Starting new lines of business
o Solving problems faster
 o Developing professional skills
o Recruit and retain talent
Activities in Knowledge Management
 Start with the business problem and the business value to be delivered
first.
 Identify what kind of strategy to pursue to deliver this value and address
the KM problem.
 Think about the system required from a people and process point of view.
 Finally, think about what kind of technical infrastructure are required to
support the people and processes.
 Implement system and processes with appropriate change management
and iterative staged release.
Level of Knowledge Management