MIS – Management
Information System

MIS – Management Information System
• MIS orientation means users have access to decision models and
methods for querying the database on an ad hoc basis; the database
is also an essential part of routine transaction processing and
reporting.
• In MIS, information is utilized to improve decision-making and
achieve improved organizational effectiveness

CONCEPT OF MIS
• MIS is the system, which makes available the right information to the
right person, at the right place, at the right time, in the right form and
at the right cost.
• According to Gordon Bitter Davis and Margrethe H. Olson, “MIS is an
integrated user-machine system for providing information to support
operations, management and decision-making functions in an
organization. The system utilizes computer hardware and software,
manual procedures/models for analysis, planning, control and
decision-making and database.”

CONCEPT OF MIS
• Kelly has defined MIS as “a combination of human and computer-
based resources, which result in collection, storage, retrieval,
communication and use of data for the purpose of efficient
management of operations and for business planning”.
• According to Henry C. Lucas, “MIS is a set of organized procedures
which when executed provide information to support decision-
making.”

CONCEPT OF MIS
• MIS is an integrated system, which transforms the data (inputs) into
reports (outputs) for facilitating decision-making through processing
and using various components of the information system, viz.,
hardware, software, database, procedures and personnel.

A formal MIS system should be able to take care of the following
functions:
● Handling of voluminous data.
● Confirmation of the validity of data and transaction.
● Complex processing of data and multidimensional analysis, quick
search and retrieval.
● Mass storage.
● Communication of the information to the user on time.
● Fulfilling the changing needs of information.
The management information system uses computers and
communication technology to deal with the above-mentioned
functions.

ROLE OF MIS
• MIS has become necessary due to increased business and
management complexities. These complexities demand not only
quantitative but also qualitative decision-making.
• A good manager/decision-maker is one who minimizes, if not
eliminates altogether, the elements of risk and uncertainty in
decision-making. MIS is helpful in doing precisely this.
• Hence, MIS is required to enable managers to take qualitative
decisions and ensure success for their respective organisations. MIS
also enables the managers to minimise the element of surprise.

ROLE OF MIS
• MIS enables decision-makers to come out with appropriate response
to a business situation.
• Thus, MIS enables decision-makers to give either a re-active or a
proactive response. As the decisions are also futuristic, MIS facilitates
pro-active decision making − it enables the managers/organisations to
be ready for tomorrow.

CHARACTERISTICS AND PRE-REQUISITES OF MIS

CBIS
• Computer-Based Information System (CBIS) is essentially a system of
information using computer technology to carry out some or all of its
planned tasks. Below is a list of the basic components of computer-
based information system.
The first four are known as information technology components:
● Hardware: These are the devices like the monitor, processor, printer
and keyboard, all of which work together to accept, process, show data
and information.
● Software: These are the programs, which allow the hardware to
process the data.

CBIS
● Database: It is the gathering of associated files or tables containing
related data.
● Network: It is a connecting system, which allows diverse computers
to distribute resources.
● Procedures: These are the commands for combining the components
above to process information and produce the preferred output.

Pre-requisites of MIS
The pre-requisites of MIS are as follows:
• Should be a unified system.
• Should support/facilitate decisions.
• Should be compatible with the organisation’s structure and culture.
• Should have user-involvement and user-orientation.
• Should be cost-effective/beneficial.
• Should use the principle of selectivity and control by exception.

Pre-requisites of MIS contd.
• Should be responsive to changes around and within the organisation.
• Should be speedy and accurate.
• Should provide validated and valid information.
• Should be “Management” and not “Manipulated” Information
System.

INFORMATION AS A STRATEGIC RESOURCE
1. What business the organisation should be in?
2. What existing business activities should be spun off?
3. What new activities should be undertaken?
4. How to protect/insure the organisation from business cycles/business
swings?
5. What are the competitors doing and can do, as revealed by their current
strategy?
6. What drives the competitors, as shown by their future objectives?
7. What do the competitors believe about themselves and the industry, as
shown by their assumptions?
8. What are the competitors’ capabilities?

• Information about the aforesaid issues would help an organisation prepare
an anticipated “response profile” of each competitor, covering the
following aspects:
1. What will the competitors do in the future?
2. Where does the organisation hold an advantage over its competitors?
3. How will this change the organisation’s relationship with its competitors?
• All these questions can be answered by undertaking competitor analysis or
resorting to competitive intelligence or business intelligence.

PORTER-MILLAR POSTULATES
According to Michael E. Porter and Victor E. Millar, Information
Technology affects competition in three vital ways:
1. It changes industry structure, and in so doing, alters the rule of
competitions.
2. It spawns whole new business, often from within the company’s
existing operations.
3. It creates competitive advantage by giving companies new ways to
outperform their rivals.

Changes in industry structure:
According to Porter and Millar, the structure of an industry is embodied
in five competitive forces that collectively determine the industry
profitability. They are:
• Bargaining power of customers
• Bargaining power of suppliers
• Threat of new entrants in the firm’s market
• Pressure from substitute products or services
• Positioning of traditional industry competitor/s
Information and Information Technology can alter each of the five
competitive forces and thereby help the firm gain competitive
advantage.

Spawning of new business:
• Information, IT and the resultant information revolution are giving
birth to completely new industries in three distinct ways:
a. The information revolution makes new business technologically
feasible.
b. Information and IT also spawn new business by creating derived
demand for new products.
c. Information and IT help create/spawn business within old ones.
• By enabling a firm to spawn a new business, information confers
competitive advantage to the firm as it can offer a bundle of goods/
services.

New ways of doing things:
• Information and IT facilitate evolution/ development of new ways of
doing old things. This difference makes the difference and gives
competitive advantage to a firm.
• In order to understand the specific use of information for competitive
advantage we would consider the uses under two types:
1. Functional Uses
2. Strategic Uses

Functional Uses
1. Information helps to lower cost in any/all parts of the value chain.
2. Information and information systems help in:
i. Facilitating product delivery
ii. Adding value to quality
iii. Improving product quality
3. Information helps to transform the physical processing component of
activities into information component leading to value addition.
4. Information provides organisations with speed and the ability to
move quickly into the market, thereby giving the organisation the first
mover’s competitive advantage.

Functional Uses contd.
5. Information helps organisations to enhance:
i. Quality of their operations
ii. Quality of their products
iii. Quality of their services
6. Information can help simplify:
i. Products
ii. Product processes
iii. Production cycle time
7. Information helps organisation to:
i. Meet benchmarking standards
ii. Improve customer service
iii. Improve quality and precision of design and product

Strategic Uses
1. Information gives organisations new ways to outperform their
rivals.
2. A firm can use four basic competitive strategiesto dealwith the
competitive forces. They are:
i. Product differentiation
ii. Focused differentiation
iii. Developing right linkages with customers and suppliers
iv. Becoming a low-cost product
A firm may/can achieve competitive advantage by pursuing one or more of
these strategies simultaneously.

Strategic Uses contd.
3. Information makes it possible for organizations to make more precise
development of strategies, planning, forecasting and monitoring.
4. Information facilitates the availability of extensive data, both internal
and external, thereby facilitating a more comprehensive analysis and adding
value to problem-solving strategies and decision-making.
5. Information and IT help improve an organisation’s abilities to
coordinate its activities regionally, nationally and globally. This, in turn, helps
unlock the powers of broader geographical scope to create competitive
advantage.
6. Information enables organisations to think globally and act locally.

Strategic Uses contd.
7. Information yields strategic opportunities and enables to change
the rules of the competition very fast, almost overnight, and gives
competitive advantage.
8. Information and IT help organisations become more flexible and
responsive, eliminate management layers, separate work from
location and restructure work flows, giving additional competitive
advantage to organisations.
9. Information and IT help organisations acquire strategic flexibility.
Strategic flexibility is a set of capabilities firms use to respond to
various demands and opportunities that are a part of dynamic and
uncertain competitive environment.

Summary
• As information is so critical, crucial and pivotal for managers and
organisations, MIS has been developed to facilitate effective and
efficient decision-making.
• MIS is the system, which makes available the right information to the
right person, at the right place, at the right time, in the right form and
at the right cost.
• MIS is required to enable managers to take qualitative decisions and
ensure success for their respective organisations.
• MIS creates an information-based work culture in an organisation. It
creates an impact on the organisational functioning, performance and
productivity.