Management information system and its foundation concepts

Referred to as information management and system, is the
discipline covering the application of people, technologies and
procedures collectively called information system, to solving
business problems.
An information system used for decision-making, as well as
for the coordination, control, analysis, and visualization of
information inside an organization, is known as a management
information system. In an organizational setting, people,
procedures, and technology are all involved in the study of
management information systems.

Q. What do you understand by MIS?
Ans. Management Information system is a well structured
method which combine the principles ,theories and practices of
management and plays an important role in business
organization for planning and decision making process.
MIS is an integrated system which collects, maintains,
correlates and selectively displays information to meet the
specific need of various level of management

According to G.B. Davis:-
A management information system is an integrated user
machine for providing information , to support the operation
management analysis and decision making function.
The system uses :-
1) Computer hardware & software
2) Manual procedure
3) Model & analysis, planning ,control and decision making
4) a database.

According to Jarome kanter:-
MIS is a system that aid management in making , carrying
out and controlling decisions.
Here MIS is a system that aid management in performing
the job.
In other words we can define MIS as a system that consist of
people ,equipment, procedure together ,
sort ,analyze ,evaluate and distribute timely & accurate
information to decision maker.

MIS based on the given these factors:
Right Information
To the Right Person
At the Right Place
At the Right Time
At the Right Form
At the Right Cost
(i.e. Plant of Automobile sector)

MIS
Management Information System

What is a System?
• A set of interrelated components
• With a clearly defined boundary
• Working together
• To achieve a common set of objectives
• Group of Components which work together for a
same goal/ Common goal.
• (i.e. Running a car on the road, National
system, Educational system, Information system
regarding the organization).

SYSTEM:- System means an organized relationship among the functioning
units or components.
System can be defined as set of elements joined together for a common objective.
Or
System is a group of interrelated components working towards a common goal
by accepting input thereby producing output in an organized transformation
process.
When the feedback and control are attached to any system to make it self-
regulating and self monitoring it is known as Cybernetic system.

What is an Information System?
• An organized combination of…
– People
– Hardware and software
– Communication networks
– Data resources
– Policies and procedures
(i.e. Data collection, process and information,
Need of account details)
 Recorded
 Summarized
 Compared
 Presented

Controlling:- Controlling is the mode of checking the progress of plans and also
correcting any deviations that may occur along the way. It involves
•Fixing the standard for measuring the work performance.
•Measurement of the actual performance .
•Comparing the actual with standards & find the deviations.
•Taking the corrective actions
INFORMATION:- Data is a set of isolated raw facts , figures ,statistics unrelated
and uninterpreted . Information is the result of processed data It is defined as the
data which can be organized and presented so that the decision maker may take
necessary action. This relationship can be explained as follow:-
MIS is the acronym of two terms viz Management Information (MI) and
system. MI refer to the quality of information in terms of its timeliness,
accuracy, completeness ,relevance ,adequacy ,explicitness. Thus MIS
provide the information which is required by mgt for decision making.

MANAGEMENT:- Management is the art of getting things done through an
individual or group of individuals to achieve the goal and objective of the
organization efficiently.
The key person involved in the management of an organization is the manager.
The main task of management are:-
Planning-It involves establishing organizational goal & developing strategies to
achieve goal. It bridges the gap between where we are and where we want to go.
Following questions are answered at the time of planning process:-
•What to do?
•When to do?
•Who is to do?
•How is it to be done?
•Where is it to be done.
•Why it is to be done?

Tactical information
Strategic information
Operational information
For long term planning
Decision Takers
(i.e. Authority)
For making control related
decisions
Implement on Decisions
(i.e. Accountability)
For making day to day
decisions & short term
planning
LEVELS OF MANAGEMENT

Information at various level of management.
To run the business organization successfully a manager has to work in different
functional area of planning, organizing , staffing , directing & controlling.
To perform these activities efficiently and effectively he needs information.
The specific need varies from level to level. Information can be gathered from internal
As well as external environment.
1)Top Level management:- The non programmed (unstructured) decision making
process are found here that are required to design and redesign the entire system. The
information need of top management from external environment is more. Top
management needs information from external environment like economics, political &
social aspect etc and on the internal functioning of the organizational subsystem.
It needs historical information along with ongoing or current information which is
generated through forecast.
The information used is futuristic and external in nature. The decision at this level
are non-programmed & strategic

Middle level:- Middle level is concerned with elaboration ,classification and
transformation of organizational goal into action plan and policies .It formulate the
operating policies and procedures for the guidance of supervisory staff. It needs the
information for short term planning. Information is internal in nature.
Operational level:- It is concerned with the implementation of operational plan,
policies and procedures for converting the inputs to output . Decision are routine in
nature and taken by manager and are mostly programmed and function and process
at this level are standardized and structured.
Amt of structure:- means the amount of human judgement and evaluation required in
the activity
Structured activities Unstructured activities
require considerable
judgement ,evaluation
and human creativity
Require little
judgement ,evaluation
& human creativity

Difference between MIS and CIS
 MIS:
 Human Being
 From Computers
 Internal to Organization
 External to Organization
 Computerized Information System:
 Little bit more Technically
 Strictly related to Computers
 Computer information systems is a broad term. It refers to managing
communications between hardware and software on data storage and
management devices. Examples of these devices include databases,
cloud storage, and servers.

NATURE AND SCOPE OF MIS
MIS extract the management concept from various disciplines such as
accounting, computing, organizations, management and operations to provide
management solutions to the organization.
This interdisciplinary nature of MIS allow us to consider MIS both as art and
science.

Organizing:- It refer to grouping of people activities in order to facilitates the
achievement of organizational goal. It involves identifying the activities divide
them into convenient jobs and delegating the authority to each individual so that
the job is carried out as planned.
Staffing:- It is the process of putting the right person at right job. This involves
recruitment- defining the requirement for the people with respect to the job to
be done, Selection- selecting the right person for the position, Training &
development- train them so that they can accomplish their task efficiently and
effectively.

INFORMATION:- It is defined as the data which can be organized and
presented so that the decision maker may take necessary action.
SYSTEM:- System can be defined as set of elements joined together for a
common objective.
Directing:- It is the process of activating the plan , structure and group efforts
in the desired direction. It is needed for the implementation of plans by
providing the desired leadership, motivation and proper communication.
Controlling:- Evaluating the resources & controlling the organizational
resources.

MI:-Management Information means Information regarding management.
MS:- Management System means basic structure of management like hierarchy
IS: Information system which provides information
SM: System Management means how to manage a system
SI: System Information. information regarding system like what are the
different parts of system
IM : Information Management means how to manage a particular information.

Tactical /Management
level
Top/Strategic Level
ESS-Executive
support system
MIS-Management information
system
DSS-Decision support system
TSS-Transaction support
system
OAS-Office automation
system
KWS-Knowledge work
system
INFORMATION SYSTEM AT VARIOUS LEVEL OF MANAGEMENT

Tactical /Management
level
Top/Strategic Level
ESS
MIS
DSS
TSS
OAS
KWS
Executive support System:- Used by top level
management to make strategic decision by using internal &
external information.
Decision support system:-It is responsible for taking
decision under uncertain conditions .It collect data from
MIS ,TPS & external sources to reach at the best
alternative.
Management information system:-It basically deals with
internal level information. It retrieve information from TPS &
then summarize the information to generate report.
Knowledge work system:-Used by operational level
managers and require technical knowledge and expertise.
Office Automation system:-It involves storing data,
electronic transfer of data & information management of the
organization.
Transactional Processing system:-required at operational
level to perform their business operation. Type of TPS are
Sales marketing system, Manufacturing system, finance
system, Human resource system & other systems.

CHARACTERISITICS OF MIS
1.Management Oriented:-MIS is to provide the information support to the
management in the organization for decision making. It means that the
efforts for the development of the information system should start from an
appraisal of management needs and overall business objective. It may be
individual or collective goals of the business organization. It serves all the
level of management in an organization i.e. Top , Middle and operational
level.
2.Need based:- MIS design and development should be as per the
information need of managers at different level via Strategic planning level,
Management control level and operational level. In other words MIS should
cater to the specific needs of managers in an organization hierarchy.

3. Exception Based:- MIS should be developed on the exception – based
reporting principle ,which means an abnormal situation i.e. the maximum ,
minimum or expected value vary beyond tolerance limits. In such situation ,
there should be exception reporting to the decision maker at the required
level.
4. Future Oriented:- Besides exception –based reporting, MIS should also look
future . In other words MIS should not merely provide past or historical .
Information rather it should provide information on the basis of projection
based on which actions may be initiated.
5. Central Database:- It is the mortar that hold the functional system together.
Each system require access to the master file of the data covering inventory ,
personnel ,vendors, customers etc. If the data is stored efficiently and with
the common usage in mind , one master file can provide the data needed by
any of the functional system. It seems logical to gather data once, to
properly validate it and to place it on a central storage medium that can be
accessed by any other system.

6. Sub system concept:- The process of MIS development is quite complex and
one is likely to lose insight frequently . Thus the system though viewed as a
single entity, must be broken down into digestible sub system.
7.Long Term Planning :- MIS is developed over relatively long period. Such
system do not develop overnight . A heavy element of planning is involved.
The MIS designer must have the future objectives and needs of the company
in mind. The designer must avoid the possibility of the system going
obsolete before its time.
8. Integrated:- It is necessary characteristic of a management information
system . Integration is significant because of its ability to produce more
meaningful information .Ex. In order to develop an effective production
scheduling system , it is necessary to balance such factors as:-
a) Set up cost. b)Workforce c) Overtime rates d) Production capacity e)
Inventory level f) Capital requirement g) Customer Services.

FUNCTIONS OF MIS
1. Collecting data
2. Processing data
3. Storing information
4. Retrieving information
5. Disseminating information

It is set up by an organization with the pair objective to obtain management information
to be used by its managers in decision making. Thus MIS must perform the following in
order to meet its objectives.
1.Data Capturing :- MIS capture data from the various internal and external sources of
an organization data. Capturing may be manual or through computer terminals . End
users typically ,records data about transactions on same physical medium , such as
paper form or enter it directly into a computer system.
2.Processing of Data:- The captured data is processed to convert it into the required
management information . Processing of data is done by such activities as
calculating ,comparing ,sorting , classifying and summarizing . These activities organize
,analyse and manipulate data using various statistical ,mathematical ,operations
research and /or other business model.
3.Storage of information:- MIS stores processed or unprocessed data for future use.
If any information is not immediately required it is saved as an organizational record. In
this activity data and information are retained in an organized manner for later use.
Stored data is commonly used into fields , records ,files and databases.

4. Retrieval of information:- MIS retrieve information from its stores as and when
required by various users. As per the requirement by various users the retrieval of
information is either disseminated as such or it is processed again to meet the exact
MI demand.
5 . Dissemination of Information:- Information which is finished products of MIS is
disseminated to the users in the organization . It could be periodic ,through reports
or online through computer terminal.

Evolution of MIS
•Earlier one Man show
•Now Globalization
•Increase need for Information
Why MIS is required
1. Dynamic and competitive nature of Market
2. Globalization of resources
3. Increasing complexities of business organization
4. Information Revolution

Earlier all business were mostly local and small in operation. A single individual could
perform all the functions of its own.MIS operated manually in which human being were
major source for providing information . He know how much stock he had , how much
surplus he had made etc.
But over the year business grew in size and complexities from sole trading to global
competition from one or two commodities to several thousand products from localized
operations to global competition.
Therefore business start growing and along with growth business complexities also
increases.
Civilized system of state government also require the business of keeping accounts and
paying dues to the state.
So the chief executive of the firm has to depend upon the reports for information, as it
is very difficult to use all the facilities. Here arises the need for full fledged information
system that keep him informed of his cooperation activities.
So Why MIS is required:-
•Dynamic and competitive nature of market.
•Globalization of resources
•Increasing complexities of business organization
•The information revolution.

Benefits of management information system:-
1.It provides timely and accurate,scientific,reliable and permanent information.
2.It avoids duplication of efforts.
3.Coordinate the whole organization.
4.It provides the information in form and formats required by the information
system.
5.It helps in making the better and scientific decisions by the management.
6.Speed of processing and fast retrieval of data is possible.
7.The scope for the use of information system has expanded information to
remote area users

Limitations of MIS:-
1.The quality of the operations of MIS depends on the quality of the input process.
2.MIS is not a substitute for effective management.
3.MIS may not have requisite flexibility to quickly update itself with the changing
needs of time .
4.MIS cannot provide tailor-made information packages suitable for the purpose of
every type of decision made by executives.
5.MIS takes into account only quantitative factors. It cannot consider the qualitative
factors like moral and attitude of managers, which have the major impact on the
decision making by the managers.
6.MIS is less useful in non-programmed decisions which are not routine nature.
7.MIS is not useful where secrecy is maintained in disseminating information to
their workers.
8.The effectiveness of MIS is also affected or reduced in case of a change in top
management ,organizational structure and operational team.

Transaction Processing system:-
Transaction is any event or activity that affect the organization. The type of transaction
varies from organization to organization.But all the firms have to process some type of
transaction as a major part of their business activity.
The most successful firm carry out the work in an orderly and efficient manner.
Transaction processing:- is a set of handling the transactions.
TPS can perform the following functions:-
•Storing transaction data to create file of transaction record.
•Sorting ,sequencing or arranging records.
•Merging the content of two or more files
•Performing calculation on the file data
•Accumulating amount of develop summary total
•Storing data for future use.
•Retrieving stored data
•Displaying or printing out data and report from the files for use by employees and
managers
Data Processing Data

Transaction Processing system(TPS):- It lies at the operational level of
management. It is responsible for recording & processing of data resulting from
business transaction.
It provides the base for MIS,DSS& EIS.
DSS: Decision Support System.(judgement). EIS: Executive Information System.
(internal, external).
It comprises data entry, listing or recording , sorting –merging and updating.
It records the transactions in both the way:-
Online mode:- Each transaction is recorded at the time of its occurrence.
Batch mode:- updating the files periodically.
It perform the routine and repetitive type of tasks.

Comparison of TPS & MIS
TPS MIS
Input Transaction/events Output from TPS
Processing Data entry , listing , sorting ,
merging & updating
Routine reports, simple models,
low level analysis
Output Detailed report list, summary
transaction
Summary & exception report
Users Operational personnel , Lower level
manager , supervisors
Middle level manager
Goal Records and process transaction Production of summary &
exception reports
Decision & support Provide decision support to lower
level managers
Provide decision supports to
tactical level manager

Decision support system:-
Decision means to “Cut off” or “Come to a conclusion”. More precisely decision
is a course of action consciously selected from available alternatives to achieve
the desired course of action.
According to Scott Morton:- DSS is an interactive computer based system
which help decision maker to utilize data and model to solve unstructured
problems.
It is an intelligent support system designed to provide information to Top and
middle level mangers to make decisions that require judgement and intuition.
It uses the sophisticated analysis and modeling tools

MIS DSS
Input Output of TPS Output of TPS & MIS Low volume
data
Processing Extraction & manipulation of business
data
Analytical modeling of business
data
Output Periodic,exceptions,demand and past
reports and responses
Interactive queries and responses
Users Middle level manager Top Level manager`
Goal Production of summary and
exception reports
Ad-hoc query handling
Decision &
support
Provide information about the
performance of the organization
Provide decision support technique
to analyse specific problem
/opportunities
Comparison b/w MIS & DSS

Executive information system:-
•It is hybrid Information system of both MIS & DSS.
•Purpose of EIS is to provide the Top management with immediate and easy access
to information about the firms critical success factors.
•EIS provide the tailor made information to end user to serve their diverse needs.
•EIS uses the graphical method to represent the things so it stresses the graphical
user interface.
•It is a user friendly information system that lay emphasis on presentation summary
information and integration of internal and external information.
•ESS also stresses trend analysis and exception reporting.

Expert System:-
An Expert system is computer based information system in which knowledge is presented
data , in which processing of knowledge is directed primarily by computer programs.
Artificial intelligence + Information system= Expert system
It is the knowledge about a specific area to act as an expert system to the user.
It is not the replacement of human being rather they help them in using their expertise
more efficiently.
It has three components-Knowledge base, the inference engine and user inference.
It is used in the field of medicines, physical science and business.
Expert system employs human knowledge captured in a computer to solve problem that
ordinarily require human expertise.
These can be used by Non-experts to improve their problem solving abilities.
ES becomes a knowledgeable assistant to human expert .Such system can work better than
any single human being.

Office Automation System (OAS)
Office Automation system refers to the use of mechanical, electrical and electronic devices to
enhance communication in the workplace and increase the efficiency and productivity of the
knowledge workers and clerical workers . Office automation includes:-
1.Work processing:- it is the use of an electronic device that automatically perform many of
the tasks necessary to create the written documents such as letters, memos and reports that
are directed to the manager.
2.Electronic mail:- electronic mail popularly known as E-mail is the use of a networked
computer that allows user to send, store and receive messages using the computer terminals
and storage devices. It sends mail electronically from one computer to others.
3.Voice mail:- voice mail is just like electronic mail and performs
storing ,accessing ,retrieving and distributing messages using the telephone.
4.Electronic calendaring:- it is the use of networked computer to store and retrieve a
manager’s appointment calendar.
5.Audio conferencing:- audio conferencing is the use of voice communication equipment to
establish an audio link between geographically dispersed person for conducting a conference.

6. Video conferencing:- video conferencing is the use of television equipment to link
geographically dispersed conference participants to engaged in face to face
communication. The equipment provides both the audio as well as video linkage.
7. Computer conferencing:- computer conferencing is the use of network computer
to all the members of a problem-solving team to exchange the information
concerning the problem being solved.
8. Facsimiles transmission:- facsimiles transmission popularly known as fax is the
transfer of written information by use of special equipment that can read a
document image at one end of communication channel and make a copy at the other
end.
9. Desktop publishing:- desktop publishing is the use of computer to prepare
output ,using software with sophisticated publishing capabilities.
10. Etc.

Questions:-
1.Define:- Management information system, transaction processing system,
decision support system, executive support system, expert system.
2.Evolution of MIS.
3.Characteristics/ objectives of MIS
4.Functions/role of MIS.
5.Advantages of MIS
6.Disadvantages of MIS

Management information system and its foundation concepts

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