Management information systems

Management
Information Systems
Sumit Kumar Singh

Information Concepts
• The word ‘information’ is used commonly in our day to day working.
Information has a precise meaning and it is different from data.
• The information has a value in decision making while data does not
have. Information brings clarity and creates an intelligent human
response in the mind.
• Data is like raw materials while the information is equivalent to the
finished goods produced after processing the raw material.

Characteristic of Information
• (i) Timeliness : Timeliness means that information must reach the
recipients within the prescribed timeframes. For effective decision-
making, information must reach the decision-maker at the right time.
• (ii) Accuracy : Information should be accurate. It means that
information should be free from mistakes, errors &, clear Accuracy
also means that the information is free from bias.
• (iii) Relevance : Information is said to be relevant if it answers
especially for the recipient what, why, where, when, who and why?

• (iv) Adequacy : Adequacy means information must be sufficient in
quantity, i.e. information must provide reports containing information
which is required in the deciding processes of decision-making.
• (v) Completeness : The information which is given to a manager
must be complete and should meet all his needs. Incomplete
information may result in wrong decisions and thus may prove costly
to the organization.
• (vi) Explicitness : A report is said to be of good quality if it does not
require further analysis by the recipients for decision making.
• (Vii) Impartiality: Impartial information contains no bias and has
been collected without any distorted view of the situation.

• (viii)Validity: The validity of the information relates to the purpose of the
information. In other words, it is the answer to the question-dose the
information meet the purpose of decision making for which it is being
collected?
• (ix) Reliability: It is connected to the representation and the accuracy of
what is being described. The reliability is also affected from the right source.
• (x)Consistency: The information is termed as inconsistent if it is derived
form a data which dose not have a consistent pattern of period. Somewhere,
the information must relate to a consistent base or a pattern.
• (xi)Age: If the information is old, it is not useful today. The currency of
the information makes all the difference to the users. If the information is
old then it does not meet any characteristics of the information.

Information Systems
• Information systems (IS) are formal, sociotechnical, organizational
systems designed to collect, process, store, and distribute information.
• In a sociotechnical perspective Information Systems are composed by
four components: technology, process, people and organizational
structure.
• Information Systems is a networks of hardware and software that
people and organizations use to collect, filter, process, create and also
distribute data.
• An emphasis is placed on an information system having a definitive
boundary, users, processors, storage, inputs, outputs and the
communication networks.

Management information systems

Various types of Information System in Business
• (a) Formal Information System : It is based on organizational chart
represented by the organization.
• (b) Informal Information System : It is an employee based system
designed to meet personal and vocational needs and to help in the
solution of work-related problems.
• (c) Computer Based Information System (CBIS) : This category of
information system depends mainly on the computer for handling
business application.

Types of Computer Based Information System
• There is class of system known as collectively as computer based
information system. They are categorized in the following 6 classes:
• i) Transaction Processing System (TPS)
• ii) Management Information System (MIS)
• iii)Decision Support System (DSS)
• iv)Executive Support System (ESS)
• v)Office Automation Systems (OASs), and
• vi)Business Expert Systems (BESs)

1. Transaction Processing System
• TPS processes transaction and produces reports. It represents the
automation of the fundamental, routine processing used to support
business operations.
• It does not provide any information to the user to his/her decision-
making. TPS uses data and produces data as shown in the following
diagram.
• Previously, TPS was known as Management Information System. Prior
to computers, data processing was performed manually or with simple
machines.
• The domain of TPS is at the lowest level of the management hierarchy
of an organization.

2. Management Information System (MIS)
• MIS is an information system, which processes data and converts it into
information. A management information system uses TPS for its data
inputs.
• The information generated by the information system may be used for
control of operations, strategic and long-range planning.
• Short-range planning, management control, and other managerial problem
solving.
• It encompasses processing in support of a wide range of organizational
functions & management processes.
• MIS is capable of providing analysis, planning & decision making support.
The functional areas of a business may be marketing, production, human
resource, finance and accounting.

3. Decision Support System (DSS)
• A decision support system (DSS) is an information system application that
assists decision-making.
• DSS tends to be used in planning, analysing alternatives, and trial and error
search for solution.
• The elements of the decision support system include a database, model base
& software.
• The main application areas of DSS are Production, finance and marketing.
• DSS can be differentiated from MIS on the basis of processing the
information. MIS processes data to convert it into information.
• DSS processes information to support the decision making process of a
manager.

4. Executive Support System (ESS)
• Executive Support System (ESS) is an extension of the management
information system, which is a
• special kind of DSS; An ESS is specially tailored for the use of chief
executive of an organization to
• support his decision-making. It includes various types of decision-
making but it is more specific and person oriented.

5. Office Automation Systems (OAS)
• Office automation refers to the application of computes and communication technology
to office functions. These are meant to improve the productivity of managers at various
levels of management of providing secretarial assistance and better communication
facilities.
• Office activities may be grouped under two classes, namely
• i)Activities performed by clerical personnel (clerks, secretaries, typist, etc.,) and
• ii)Activities performed by the executives (managers, engineers or other professionals
like economist, researches etc.)
• In the first category, the following is a list of activities. a) Typing b)Mailing c)Scheduling of
meetings and conferences, d) Calendar keeping, and e)Retrieving documents
• The following is a list of activities in the second category (managerial category)
a)Conferencing. b)Production of information (messages, memos, reports, etc.) and
controlling performance.

6. Business Expert Systems
• These systems are one of the main types of knowledge-based
information systems.
• These systems are based on artificial intelligence, and are advanced
information systems.
• A business expert system is a knowledge based information system
that uses its knowledge about a specific, complex application area to
act as an expert.
• The main components of an expert system are: a. Knowledge Base b.
Interface Engine c. User Interface

Management Information Systems
• Management Information Systems (MIS), also referred as
Information Management and Systems, is the discipline covering the
application of people, technologies, and procedures collectively
called information systems, to solving business problems.
• 'MIS' is a planned system of collecting, storing and disseminating
data in the form of information needed to carry out the functions of
management.
• Academically, the term is commonly used to refer to the group of
information management methods tied to the automation or support
of human decision making, e.g. Decision Support Systems, Expert
Systems, and Executive Information Systems

• Management : Management is art of getting things done through and
with the people in formally organized groups.
• The basic functions performed by a manager in an organization are:
Planning, controlling, staffing, organizing, and directing.
• Information : Information is considered as valuable component of an
organization.
• Information is data that is processed and is presented in a form which
assists decision maker.
• System : A system is defined as a set of elements which are joined
together to achieve a common objective. The elements are interrelated
and interdependent.
• A system has one or multiple inputs, these inputs are processed
through a transformation process to convert these input( s) to output.

Objectives of MIS
• 1. Data Capturing : MIS capture data from various internal and external sources of
organization. Data capturing may be manual or through computer terminals.
• 2. Processing of Data : The captured data is processed to convert into required
information. Processing of data is done by such activities as calculating, sorting,
classifying, and summarizing.
• 3. Storage of Information : MIS stores the processed or unprocessed data for future
use. If any information is not immediately required, it is saved as an organization
record, for later use.
• 4. Retrieval of Information : MIS retrieves information from its stores as and when
required by various users.
• 5. Dissemination of Information : Information, which is a finished product of MIS,
is disseminated to the users in the organization. It is periodic or online through
computer terminal.

Characteristics of MIS
• 1. Systems Approach : The information system follows a systems
approach. Systems approach means taking a comprehensive view or a
complete look at the interlocking sub-systems that operate within an
organization.
• 2. Management Oriented : Management oriented characteristic of MIS
implies that the management actively directs the system development efforts.
• 3. Need Based : MIS design should be as per the information needs of
managers at different levels.
• 4. Exception Based : MIS should be developed on the exception based
also, which means that in an abnormal situation, there should be immediate
reporting about the exceptional situation to the decision –makers at the
required level.

• 5. Future Oriented : It should provide information, on the basis of future
projections on the actions to be initiated.
• 6. Integrated : Integration means taking a comprehensive view or looking at
the complete picture of the interlocking subsystems that operate within the
company.
• 7. Common Data Flow : Common data flow includes avoiding duplication,
combining similar functions and simplifying operations wherever possible.
• 8. Long Term Planning : MIS is developed over relatively long periods. A
heavy element of planning should be involved.
• 9. Sub System Concept : The MIS should be viewed as a single entity, but
it must be broken down into digestible sub-systems which are more
meaningful.
• 10. Central database : In the MIS there should be common data base for
whole system.

Role of the Management Information System
• The role of the MIS in an organization can be compared to the role of
heart in the body. The information is the blood and MIS is the heart.
• In the body the heart plays the role of supplying pure blood to all the
elements of the body including the brain.
• The heart works faster and supplies more blood when needed.
• It regulates and controls the incoming impure blood, processes it and
sends it to the destination in the quantity needed.
• It fulfils the needs of blood supply to human body in normal course
and also in crisis.

(1) The system ensures that an appropriate data is collected from the
various sources, processed, and sent further to all the needy destinations.
The system is expected to fulfil the information needs of an individual, a
group of individuals, the management functionaries: the managers and the
top management.
(2) The MIS satisfies the diverse needs through a variety of systems such
as Query Systems, Analysis Systems, Modelling Systems and Decision
Support Systems the MIS helps in Strategic Planning, Management Control,
Operational Control and Transaction Processing.
(3) The MIS helps the clerical personnel in the transaction processing
and answers their queries on the data pertaining to the transaction, the status
of a particular record and references on a variety of documents. The MIS
helps the junior management personnel by providing the operational data
for planning, scheduling and control, and helps them further in decision
making at the operations level to correct an out of control situation.

(4) The MIS helps the middle management in short them planning,
target setting and controlling the business functions. It is supported by
the use of the management tools of planning and control. The MIS
helps the top management in goal setting, strategic planning and evolving
the business plans and their implementation.
(5) The MIS plays the role of information generation,
communication, problem identification and helps in the process of
decision making. The MIS, therefore, plays a vita role in the
management, administration and operations of an organization.

Organizational Need for MIS
• 1. Support the Business Process : Treats inputs as a request from the customer
and outputs as services to customer. Supports current operations and use the
system to influence further way of working.
• 2. Support Operation of a Business Organization : MIS supports operations of
a business organization by giving timely information, maintenance and
enhancement which provides flexibility in the operation of an organizations.
• 3. To Support Decision Making : MIS supports the decision making by employee
in their daily operations. MIS also supports managers in decision making to meet
the goals and objectives of the organization. Different mathematical models and IT
tools are used for the purpose evolving strategies to meet competitive needs.
• 4. Strategies for an Organization : Today each business is running in a
competitive market. MIS supports the organization to evolve appropriate strategies
for the business to assented in a competitive environment.

Essential Requirement of an Effective MIS
(i) Qualified System and Management Staff : The prerequisite of an
effective MIS is that it should be managed by qualified officers. These
officers should have a mutual understanding about the roles and
responsibilities of each other.
(a) System and Computer Experts who in addition to their expertise in
their subject area , they should also be capable of understanding
management concepts to facilitate the understanding of problems asked
by concern.
(b) Management experts who should also understand quite-clearly the
concepts and operations of a computer.

• (ii) Futuristic Perspective : An effective MIS should be capable of
meeting the future requirements of its executives as well. This
capability can be achieved by regular monitoring and updating the MIS.
• (iii) Support of Top Management : For a management information
system to be effective, it must receive the full support of top
management. The Reasons for this are :
(a) Subordinate managers are usually lethargic about activities which
do not receive the support of their superiors.
(b) The resources involved in computer based information system are
larger and are growing larger and larger in view of importance gained
by management information system.

• (iv) Common Database : It is an integrated collection of data and
information which is utilized by several information subsystems of an
organization. A common database may be defined as a super file which
consolidates and integrates data records formerly stored in a separate
data file.
• (v) Control and maintenance of MIS : Control of the MIS means
the operation of the system as it was designed to operate. Some times,
users develop their own procedures or short cut methods to use the
system which reduces its effectiveness.

Management information systems

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