Management information systems (MIS) are used to collect, process, store, and distribute information to support decision making, coordination, control, analysis, and visualization in an organization. MIS use hardware, software, networks, and data resources to transform data into useful information. They provide outputs like scheduled reports, key indicator reports, and demand reports to support management functions like planning, controlling, and decision making. MIS help organizations gain competitive advantages through improved decision making and performance monitoring. While MIS face challenges to build and maintain, they also create opportunities to enhance productivity, quality, and global competitiveness.

1. DATA, INFORMATION, AND SYSTEMS
 Data vs. Information
◦ Data
 A “given,” or fact; a number, a statement, or a picture.
 Represents something in the real world.
 The raw materials in the production of information.
◦ Information
 Data that have meaning within a context.
 Data in meaningful form.
 Data after manipulation.
 What Is a System?
◦ System: A system is a group of interrelated components working
together toward a common goal by accepting inputs and producing
outputs in an organized transformation process.
A system (sometimes called a dynamic system) has three basic interacting
components or functions. These include:
Input involves capturing and assembling elements that enter the system to be
processed. Processing involves transformation processes that convert input into
output.
Output involves transferring elements that have been produced by a transformation
process to their ultimate destination.
Feedback and Control are two additional components of the system concept.
A system with feedback and control components is sometimes called a cybernetic
system, that is, a self-monitoring, self-regulating system.
Feedback is data about the performance of a system.
Control involves monitoring and evaluating feedback to determine whether a system
is moving toward the achievement of its goals. The control function then makes
necessary adjustments to a system's input and processing components to ensure that it
produces proper output.
◦ Subsystem: One part of a system where the products of more than one system
are combined to reach an ultimate goal

2. ◦ Why Do People Need Information?
◦ Individuals - Entertainment and enlightenment
◦ Businesses - Decision making, problem solving and control.
INFORMATION SYSTEM
An organized combination of people, hardware, software, communication networks,
and data resources. It is a system that uses the resources of hardware, software, and
people to perform input, processing, output, storage, and control activities that
transform data resources into information products. The purpose is to collect,
transform, and disseminates information in an organization.
CLASSIFICATION OF INFORMATION SYSTEMS
Information Systems perform important operational and managerial support roles in
businesses and other organizations. Therefore, several types of information systems
can be classified conceptually as either:

3. 1. Operations Support Systems
2. Management Support Systems
Operations Support Systems
Information systems are needed to process data generated by and used in business
operations. Such operations support systems (OSS) produce a variety of information
products for internal and external use. However, they do not emphasize producing the
specific information products that can best be used by managers. Further processing
by management information systems is usually required. The role of a business firm’s
operations support systems is to:
• Effectively process business transactions
• Control industrial processes
• Support enterprise communications and collaboration
• Update corporate databases.
Transaction Processing Systems (TPS) Focus on processing the data
generated by business transactions and operations. Transaction processing systems
record and process data resulting from business transactions (sales, purchases,
inventory changes). TPS also produce a variety of information products for internal or
external use (customer statements, employee paychecks, sales receipts etc.).
TPS process transactions in two basic ways:
• Batch Processing - transactions data is accumulated over a period of time and
processed periodically.
• Real-time (or online) processing - data is processed immediately after a
transaction occurs.
Process Control Systems (PCS) - Process control systems are systems, which
make use of computers to control ongoing physical processes. These computers are
designed to automatically make decisions, which adjust the
Physical production process. Examples include petroleum refineries and the assembly
lines of automated factories.
Enterprise Collaboration Systems - Enterprise collaboration systems are
information systems that use a variety of Information technologies to help people
work together. Enterprise collaboration systems help us
◦ Collaborate- to communicate ideas
◦ Share resources
◦ Co-ordinate our cooperative work efforts as members of the many formal and
informal process and project teams.
The goal of enterprise collaboration systems is to use information technology to
enhance the productivity and creativity of teams and workgroups in the modern
business enterprise.

4. Management Support Systems (MSS)
Management support systems focus on providing information and support for
effective decision making by managers. They support the decision-making needs of
strategic (top) management, tactical (middle) management,
and operating (supervisory) management. Conceptually, several major types of
information systems support a
variety of decision-making responsibilities:
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Executive Information Systems (EIS)
Management information systems - are the most common form of
management support systems. They provide managerial end users with information
products that support much of their day-to-day decision-making needs. MIS provide a
variety of prespecified information (reports) and displays to management that can be
used to help them make more effective, structured types of day-to-day decisions.
Information products provided to managers include displays and reports that can be
furnished:
• On demand
• Periodically, according to a predetermined schedule
• Whenever exceptional conditions occur
Decision support systems -Provide managerial end users with information in an
interactive session on an ad hoc (as needed) basis. Managers generate the information
they need for more unstructured types of decisions in an
interactive, computer-based information system that uses decision models and
specialized databases to assist the decision-making processes of managerial end users.
Executive information systems - Provide top and middle management with
immediate and easy access to selective information about key factors that are critical
to accomplishing a firm’s strategic objectives. EIS are easy to operate and
understand.
Other Classifications of Information Systems:
Several other categories of information systems that support either operations or
management applications include:
• Expert systems
• End user computing systems
• Business information systems
• Strategic information systems
1. Expert Systems are knowledge-based systems that provide expert advice and
act as expert consultants to the users.

5. 2. End user computing systems support the direct, hands on use of computers by
end users for operational and managerial applications.
3. Business information systems support the operational and managerial
applications of the basic business functions of a firm.
4. Strategic information systems provide a firm which strategic products,
services, and capabilities for competitive advantage.
MANAGEMENT INFORMATION SYSTEMS
(MIS)
Management information systems (MIS) are a combination of hardware and software
used to process information automatically. Commonly, MIS are used within
organizations to allow many individuals to access and modify information. In most
situations, the management information system mainly operates behind the scenes,
and the user community is rarely involved or even aware of the processes that are
handled by the system.
A computer system used to process orders for a business could be considered a
management information system because it is assisting users in automating processes
related to orders. Other examples of modern management information systems are
websites that process transactions for an organization or even those that serve support
requests to users. A simple example of a management information system might be
the support website for a product, because it automatically returns information to the
end user after some initial input is provided.
Online bill pay at a bank also qualifies as a management information system — when
a bill is scheduled to be paid, the user has provided information for the system to act
against. The management information system then processes the payment when the
due date approaches. The automated action taken by the online system is to pay the
bill as requested. Since the bills within an online bill pay system can be scheduled to
be automatically paid month after month, the user is not required to provide further
information. Many times, the bill pay system will also produce an email for the user
to let him know that the action has occurred and what the outcome of the action was.
Management information systems typically have their own staff whose function it is
to maintain existing systems and implement new technologies within a company.
These positions are often highly specialized, allowing a team of people to focus on
different areas within the computer system. In recent years, colleges and universities
have begun offering entire programs devoted to management information systems. In

6. these programs, students learn how to manage large interconnected computer systems
and troubleshoot the automation of these management information systems.
"MIS primarily serve the functions of planning, controlling, and decision making at
the management level." MIS are one of a number of different types of information
systems that can serve the needs of different levels in an organization. For example,
information systems might be developed to support upper management in planning
the company's strategic direction or to help manufacturing in controlling a plant's
operations. Some of the other types of information systems include: transaction
processing systems, which simply record the routine transactions needed to conduct
business, like payroll, shipping, or sales orders; and office automation systems, which
are intended to increase the productivity of office workers and include such systems
as word processing, electronic mail, and digital filing. Ideally, the various types of
information systems in an organization are interconnected to allow for information
sharing.
Purpose & Scope of Management Information System
The Purpose and Scope of MIS can be defined as “The combination of human and
computer based resources that results in the collection, storage, retrieval,
communication and use of data for the purpose of efficient management of operations
and for business planning”.
In order to get a better grip on the activity of information processing, it is necessary to
have a formal system which should take care of the following points:
 Handling of a voluminous data.
 Confirmation of the validity of data & transaction.
 Complex processing of data and multi-dimensional analysis.
 Quick search & retrieval.
 Mass Storage.
 Communication of the information system to the user on time.
 Fulfilling the changing needs of the information.
The management information system uses computers and communication technology
to deal with these points of supreme importance.
Role of 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 pure blood, processes it and sends it to the destination in the
quantity needed. It fulfills the needs of blood supply to human body in normal course
and also in crisis.
The MIS plays exactly the same role in the organization. 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 fulfill the information needs of

7. an individual, a group of individuals, the management functionaries: the managers &
the top management.
The MIS satisfies the diverse needs through a variety of systems such as Query
Systems, Analysis Systems, Modeling Systems and Decision Support Systems. The
MIS helps in Strategic Planning, Management Control, Operational Control and
Transaction Processing.
Outputs of management information systems
 Scheduled reports
These are the reports Produced periodically, or on a schedule (daily, weekly,
and monthly)
 Key-indicator report
These are the reports that Summarizes the previous day’s critical activities.
Typically available at the beginning of each day.
 Demand report
These are the reports which Gives certain information at a manager’s request.
 Exception report
These are automatically produced when a situation is unusual or requires management
action.
Characteristics of a Management Information System
• MIS Provides reports with fixed and standard formats, like Hard-copy and
soft-copy reports
• MIS Uses internal data stored in the computer system
• End users can develop custom reports.
• Requires formal requests from users.

8. Management Information Systems for Competitive
Advantage
• MIS Provides support to managers as they work to achieve corporate goals.
• These Enables managers to compare results to established company goals and
identify problem areas and opportunities for improvement.

9. Advantages of MIS
1. It Facilitates planning: MIS improves the quality of plants by providing relevant information
for sound decision – making. Due to increase in the size and complexity of organizations,
managers have lost personal contact with the scene of operations.
2. In Minimizes information overload: MIS change the larger amount of data in to summarize
form and there by avoids the confusion which may arise when managers are flooded with
detailed facts.
3. MIS Encourages Decentralization: Decentralization of authority is possibly when there is a
system for monitoring operations at lower levels. MIS is successfully used for measuring
performance and making necessary change in the organizational plans and procedures.
4. It brings Co -ordination: MIS facilities integration of specialized activities by keeping each
department aware of the problem and requirements of other departments. It connects all decision
centers in the organization..
5. It makes control easier: MIS serves as a link between managerial planning and control. It
improves the ability of management to evaluate and improve performance. The used computers
has increased the data processing and storage capabilities and reduced the cost.
6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.
Disadvantages of MIS
1. Highly sensitive requires constant monitoring.
2. Budgeting of MIS extremely difficult.
3. Quality of outputs governed by quality of inputs.
4. Lack of flexibility to update it self.
5. Effectiveness decreases due to frequent changes in top management
6.takes into account only qualitative factors and ignores non-qualitative factors like morale of
worker, attitude of worker etc...

10. Applications of MIS
With computers being as ubiquitous as they are today, there's hardly any large business that does
not rely extensively on their IT systems.
However, there are several specific fields in which MIS has become invaluable.
* Strategy Support
While computers cannot create business strategies by themselves they can assist management in
understanding the effects of their strategies, and help enable effective decision-making.
MIS systems can be used to transform data into information useful for decision making.
Computers can provide financial statements and performance reports to assist in the planning,
monitoring and implementation of strategy.
MIS systems provide a valuable function in that they can collate into coherent reports
unmanageable volumes of data that would otherwise be broadly useless to decision makers. By
studying these reports decision-makers can identify patterns and trends that would have remained
unseen if the raw data were consulted manually.
MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer
a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can
provide predictions about the effect on sales that an alteration in price would have on a product.
These Decision Support Systems (DSS) enable more informed decision making within an
enterprise than would be possible without MIS systems.
* Data Processing
MIS not only do MIS systems allow for the collation of vast amounts of business data, but they
also provide a valuable time saving benefit to the workforce. Where in the past business
information had to be manually processed for filing and analysis it can now be entered quickly
and easily onto a computer by a data processor, allowing for faster decision making and quicker
reflexes for the enterprise as a whole.
*Management by Objectives
While MIS systems are extremely useful in generating statistical reports and data analysis they
can also be of use as a Management by Objectives (MBO) tool.
MBO is a management process by which managers and subordinates agree upon a series of
objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set
using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and
Time-Specific.

11. The aim of these objectives is to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or project. The success of any MBO
objective depends upon the continuous tracking of progress.
In tracking this performance it can be extremely useful to make use of an MIS system. Since all
SMART objectives are by definition measurable they can be tracked through the generation of
management reports to be analyzed by decision-makers.
Challenges faced by MIS
1. Workforce downsizing.
2. Information overload.
3. Employee mistrust.
4. Difficult to build.
5. Security breaches.
Opportunities
1. Enhanced global competitiveness.
2. Capture market opportunities.
3. Support corporate strategy.
4. Enhance worker productivity.
5. Improve quality of goods and services.

12. Conclusion
Through the MIS, the information can be used as a strategic weapon to counter the threats to
business, make businesses more competitive, and bring about the organizational transformation
through integration. A good MIS also makes an organization effective.