Management Information System is a key contributor towards managing and using data for achieving business goals. Companies are preparing different software to manage functional and non functional data.

1. Unit-1
Management Information System: An
Overview

2. • 1.1 Introduction, Management Information System
• 1.2 Definition of MIS
• 1.3 Information Needs and Its Economics
• 1.4 Meaning and Objectives of MIS
• 1.5 Role of MIS in Organization

3. Introduction
• Need of updated information become inevitable to arrive at an effective decision in all area
• Significant part of an executive’s working and personal time spent on recording, searching,
absorbing and communicating information
• Information is live as it is required to be updated all the time and is renewable
• It is substitutable and transportable and can be made to travel
• Growth in information area makes it necessary that info should be collected, stored and retrieved in
various field so it exploited as and when needed.

4. Info as sixth resource
• Men, machines, materials, money and methods along with flow of information in organization is
required

5. MIS
• MIS is an integrated man machine system that provides information to support the planning
and control functions of managers in an organization.
• It is the combination of human computer based resource that results in the collection,
storage, retrieval, communication and use of data for efficient management of operation
and for business planning.

6. MIS
• MIS is something more than just a system.
• Before evolution of computers, MIS techniques existed to supply users with information that would permit
them to arrive at an decision.
• Computer has added new dimensions such as speed, accuracy and processing of massive data that permit
consideration of more alternatives in a decision
MIS
Management Information System

7. management
• It is viewed as function, a process, a profession and a elite or a class of people. Also considered as an art
and science.
• Along with material, capital and labor, management is considered as a resource.
• Functions of management:
• Planning
• Organizing
• Controlling
• Directing
• Hierarchy level of organization
• Top
• Middle
• Junior

8. Information
for
strategic planning
and decision making
Information for technical
planning and information
Information for operational planning,
decision making and control
Transaction planning
Allocation of Manager’s Time
Top Management
Middle Management
Operative Management

9. information
• It is the data which is organized and presented at a time and place so that the decision
maker may take necessary action.
• Conversion process of data into decision is shown below:
Data Process Information Decision
Action
Specific
Implementation

10. • Information required for decision maker can be classified as:
1. Environmental information
a. Government policies
b. Economic trends
c. Technological environment
d. Factors of production
3. Internal information
1. Sales forecast
2. The financial plan
3. Supply factors
4. policies
2. Competitive information
a. Industry demand
b. Firm demand
c. The competition
1. Past performance
2. Present activity
3. Future plans

11. system
• A system is a group of elements or components joined together to fulfil certain functions.
• A system is assemblage of procedure, processes, methods, routine techniques, etc.
• United in some form of regulated interaction to form an organized whole.
• Systems are either natural or man made.
• A system is made up of sub system. A sub system which may be composed of further sub-system.

12. Characteristics while defining MIS
• MIS meant for providing information
• The data are generated, collected, recorded, stored, processed and retrieved after it has been
generated by the business operations in an organization.
• IS designed for job positions (Job responsibilities) rather than for individuals
• IS designed for different levels of management
• IS designed to supply information in the area of marketing, finance, production, personnel,
materials and logistics etc.
• Data redundancy should be minimized
• One point entry and updating of master data files should be ensured.
• IS are facilitated with electronic equipment such as computers.

13. Definitions
• According to Schwartz, MIS is a system of people, equipment, procedures, documents and
communication that collects, validates, operates on transformers, stores, retrives and present data
for use in planning, budgeting, accounting, controlling and other management processes.
• Coleman and Riley state that,’ MIS,
a) Applies to all management levels
b) Is linked to an organizational sub system
c) Functions to measure performance
d) Monitor progress, evaluate alternatives or provide knowledge for change
e) Is flexible both internally and externally

14. Definitions
• Davis and Olsen defined MIS as an integrated user machine system designed for decision making
functions in an organization. The IS(Information System) use resources such as hardware,
software, men (Manpower) , procedures as well as supplies.
• Canith defined MIS as an approach that visualizes the business organization a single entity
composed of various inter related and inter dependent sub systems looking together to provide
timely and accurate information for management decision making , which leads to the optimization
of overall enterprise goals.
• Jeorme Kanter, “ MIS is a system that aids management in making, carrying out and controlling
decisions.
• Fredrick defined, MIS as structure to provide the information ,when and where needed. The system
represents the internal communication network of the business providing the necessary intelligence
to plan, execute and control.

15. Information Needs and Its Economics
• The availability of information at different levels of management has improved due to three
reasons,
1. Development of telecommunication (Ex. Radio telephony, GPS, Satellite Communication etc.)
2. Processing of data with computer (Speed, accuracy, convenience to retrieve data)
3. Video Technology (Recording of data and information is possible to provide handy information
as per requirements.)

17. Classification of Information
• Action (Processed and used) vs. non –action (unnoticed and unused)information
Ex. Policies regarding education vs. data of uneducated and educated people
• Recurring (repetitive- occurring at regular time interval) vs. non-recurring information
Ex. Sales information vs. procuring costly and latest technology in industry (one time)
• Documentary (available in some form) vs. non documentary information
Ex. Information available in database or magnetic film vs. orally presented information
• Internal (within the organization) vs. external information
Ex. Qualification of employees vs. government policies
• Historical information vs. future projections
Ex. Previous year’s achieved market share vs. projected market share for next year.

18. Information characteristics or value

19. The information to be of value, characteristics must
have within it
• Relevance
• Availability
• Timeliness
• Objectivity
• Sensitivity
• Comparability
• Consciousness (the state of being aware)
• Completeness

20. Measures of Quality information
Low quality information can have adverse effect on business decisions. The measures are as follows.
• Accuracy
The ethical and true efforts maintained in collecting information
Information must be reflection of the situation
• Form (tabular form, in graph, year wise data etc.)
• Relevance (updated and related information)
• Timeliness (delayed information has less or no value)
• ABC nature of information (Availability, cost and being dependent)
Four Principles of IS are,
1. Data+Relevance+Purpose= Information
2. Information+Insight=Understanding
3. Understanding+ Communication= Intelligence
4. Intelligence+Action=Effectiveness

21. Business risk due to information gap

22. • More of time and money invested- probability of availability of information is increased
• More of information available-business risk is minimized
• Importance of information will not increase beyond a limit
Ex. After market saturation, no need to identify the factors affecting growth potential

23. Information from Data
• Data Life Cycle
1. Generation of Data (Sales slips, personnel forms, purchase orders etc.)
2. Manipulation of data (preparing pay slips for employees, bills for customers etc.)
3. Storing/retrieving and reproduction of data

24. Data Processing Methods
• Manual
• Electronic Data Processing (Banking System)
• Automatic Data Processing (SIS, EIS)
• Computer Data Processing

25. Objectives of MIS
• Facilitate the decision making process
• Provide requisite information at each level of management to carry out their functions
• Help in highlighting the critical factors for successful functioning
• Support decision making in both structured and unstructured problem environments
• Provide a system of men, machine and documents for collecting, storing, retrieving and
transmitting information to the users.

26. Categories of MIS
5. Programmed Decision Making
System- Automatic solution of a
problem- decisions are made by a
system rather than a person

27. MIS and Organization Structure

28. Location of MIS in Business Organization
• As part of financial department
• Data Processing organization under a separate direction (MIS) (Ex. Tata group of companies,
implemented ERP, Accenture, IBM, WellPoint etc.)
• Data Processing organization as a separate company (HP, IBM, Oracle etc.)

29. Characteristics of MIS
1. Management Oriented (with reference to management needs and compliance with management
objectives)
2. Management directed (directing and controlling the efforts of system on a continuous basis)
3. Integrated (Integration of different functions, systems, sub systems)
4. Common data flows (avoiding data repetition and over lapping of information)
5. Heavy planning element(long term planning, take more than 3 to 5 years, ex. Highway is not
designed to handle today’s traffic but even after 10 years)
6. Sub system concept (Division of MIS features)
7. Flexibility and ease of use (updating information and operational ease)

30. Classification of MIS
• Data Bank Information System
- The link between IS and user is assumed weak
- User requests for data
- System provides reports
- User can identify cause and effect relation in report
- User can not make any predictions or decision on the basis of report
- Suitable for unstructured decisions
• Predictive Information system
- What if questions are asked by user
- Predictions can be made
- System answers in if and then
- Suitable for semi structured decisions

31. • Decision making information system
- Value system and criteria for choice are incorporated
- Suitable for structured decision
- Ex. Cost Effectiveness
- The solution offered by system with specific objectives and certain solution
recommend a policy or solution
• Decision taking information system
- The IS and user are assumed to be one
- Ex. Purchase Order is released automatically when inventory level goes below a certain point

32. MIS and Level of Management

33. Levels of Management Activities

34. Design of an MIS
Steps to design MIS
1. Identifying Information needs at all levels of Management
- Identify the problems to be solved
- Problems can be identified through proper feedback mechanism
- Initiating information need
- Asking questions about the need
- Suggesting interpretation of the need
- Detailing the original statement
- Reviewing with the management and more detailed statement of the need

35. 2. Listing objectives of MIS and anticipated benefits
- Objectives must be designed in the term of information demand
- Automation of records highly required( Ex. Government Departments)
- Questions asked while listing down the objectives,
• What is the purpose of the system?
• Why is it needed?
• What is it expected to do?
• Who are the users and what are their objectives?
- Objectives of MIS must match with objectives of organization
- Fallacy in stating objective must not be there (Ex. Reduce 5% cost rather than reduce cost)

36. 3. Identifying system constraints (Internal and External)
Internal Constraints are,
- Top Management support
- Organizational Policy
- Manpower needs and availability
- Cost and resources
- Acceptance of MIS (threat to status, threat to ego, economic threat)
External constraints are mainly customers, govt. policies, technology etc.

37. 4. Determining information needs and resources
- Decision maker must know about the objective and accordingly the need of requirement
- The type of information required at different time depends on,
• Personal managerial attitude (Knowledge of IS, managerial style, perception of information need)
• Organizational environment (nature of the company, level of management, structure of the organization)
• Sources of information: Internal and External
5. Developing alternative conceptual design and selecting one.
- The concept of design of an MIS consist of,
1. Pattern of information flow
2. Channels of information
3. Role of decision makers and competitors
6. Preparing the conceptual design report
- Proposal prepared for the expenditure of funds and possible changes in organizational set up.
- Must contains summary of problems, objectives, general nature of the system, reasons why the concept
was selected, time and resources required for the design
- Report of performance specifications may also be submitted

39. Implementation of MIS
1. Preparing organizational plans
2. Planning of work flow
3. Training the personnel
4. Development of software
5. Acquiring computer hardware
6. Designing the data of format of data collection
7. Construction of Data files
8. Operation of old and new systems in parallel
9. Phasing out the old and inducting the new system
10. Evaluation, maintenance and control of the new system.

40. Implementation of MIS

41. • A waiter takes an order at a table, and then enters it online via one of the six terminals located in the restaurant
dining room.
• The order is routed to a printer in the appropriate preparation area: the cold item printer if it is a salad, the hot-
item printer if it is a hot sandwich or the bar printer if it is a drink.
• A customer’s meal check-listing (bill) the items ordered and the respective prices are automatically generated.
This ordering system eliminates the old three-carbon-copy guest check system as well as any problems caused
by a waiter’s handwriting.
• When the kitchen runs out of a food item, the cooks send out an ‘out of stock’ message, which will be
displayed on the dining room terminals when waiters try to order that item. This gives the waiters faster
feedback, enabling them to give better service to the customers.
• Other system features aid management in the planning and control of their restaurant business. The system
provides up-to-the-minute information on the food items ordered and breaks out percentages showing sales of
each item versus total sales. This helps management plan menus according to customers’ tastes.
• The system also compares the weekly sales totals versus food costs, allowing planning for tighter cost controls.
In addition, whenever an order is voided, the reasons for the void are keyed in. This may help later in
management decisions, especially if the voids consistently related to food or service.
• Acceptance of the system by the users is exceptionally high since the waiters and waitresses were involved in
the selection and design process. All potential users were asked to give their impressions and ideas about the
various systems available before one was chosen.