Management Information System

Management Information System
Prepared By Ajilal

Management information system
Management information system as the study of
information systems in business and management . The
term management information system also designates a
specific category of information systems serving
management –level functions .

Management information system serve the
management level of the organisation ,providing
managers with reports and, in some cases ,with
online access to the organization's current
performance and historical records

MIS primarily serve the functions of
planning ,controlling , and decision making
at the management level.

“A set of interrelated components that
collect (retrieve), process, store and
distribute information to support decision
making and control in an organization”.
Information System?

1.The information we have is not what we want,
2.The information we want is not the information we need
3.The information we need is not available.
Information is Critical

Information is a Resource
It is scarce
It has a cost
It has alternative use
There is an opportunity cost factor involved
if one does not process information

 To process data from org & present it in the form of
reports at regular intervals.
 This concept changed when a distinction was made
between data & information
 Information is a product of an analysis of data
 Similar to RM & Finished product
Concept of MIS

To ensure effective and efficient decision
making leading to prosperity of the
Organisation
Why need Information?

Short for Management Information System –
MIS refers broadly to a computer-based
system that provides managers with the tools for
organizing, evaluating and efficiently running
their departments.
What is MIS?

 Right Information
 To the right person
 At the right place
 At the right time
 In the right form
 At the right cost
What is MIS?

System emphasizing a fair degree of integration and a
holistic view;
Information stressing on processed data in the context in
which it is used by end users;
Management focusing on the ultimate use of such
information systems for managerial decision making.

 Technological Revolution
 Research & Development
 Explosion of Information
Increased Business Complexities

 Information is Blood & MIS – Heart
 Helps clerks in transaction processing, Junior
management by providing operational data for
planning , scheduling & control
 Middle management in short term planning
 Helps in information generation,communication
& decision making

The concept of MIS has changed substantially over the years.
In the 50’s and 60’s, the management saw the potential of computers
to process large amounts of data speedily and accurately.
The departments that were involved with such activities were known
as Electronic Data Processing (EDP) departments. The focus of EDP
was Record Keeping e.g. Accounting data – Payroll data.
Historic Development

In the 70’s, there was a discernible shift from data to
information. The focus was not on data but on the
analysis of Organization data.
There was a shift in the philosophy.
Such a concept came to be widely known as
‘Management Information System’.
RIGHT INFORMATION IN RIGHT TIME TO RIGHT PEOPLE

The information and decision hungry managers of
80’s saw a huge potential in the expert systems as a result
of spectacular growth in the Artificial Intelligence area.
Combined with DSS philosophy the expert systems
could supply a superior class of managerial information
support, known as Knowledge Based Systems (KBS).

The EDP targeted the operational level of
management.
The MIS/DSS/KBS target the middle management.
Attempts were made to provide information
to top management as well, known as Executive
Information System (EIS).

 EDP - Focus on Data
 OAS - Focus on Communication
 MIS - Focus on Information
 DSS - Focus on Decision Support
 EIS - Focus on Decision Support for Top
Management
 ES - Focus on Consultation
 AI - Focus on self-learning /thinking systems

Organizational Foundation of
Information System

In addition to supporting decision making, co-
ordination and control, information system may also help
managers and workers to analyze problems, visualize
complex subjects and creates new products.
Information system contains information about
significant people, places and things within the organization
or in the environment surrounding it.
By information we mean data that have been shaped
into a form that is meaningful and useful to human being.
Organizational foundation

Information system and organization influence
one another.
An organization is a stable, formal structure
that takes the resources from the environment and
process them to produce output.
Communication within a company depends
upon the formal and informal organization that have
been established and upon the frame work imposed

1. Information
2. Information Technology
3. People*
(*the most important).
MIS Deals with Three Important
Organizational Resources

The Relationship Between Organizations and Information
Systems
The Two-Way Relationship

Multiple perspectives on information systems
show that the study of information systems is a
multidisciplinary field. The major disciplines that
contribute problems, issues, and solutions in the
study of information systems. It can divided in to
two:
1) Technical approach
2) Behavioral approach
CONTEMPORARY APPROACHES

The Technical approach to information systems
emphasizes mathematically based models to study
information systems, as well as the physical
technology & formal capabilities of these systems.
The disciplines that contribute to the three technical
approach :
1. Computer science
2. Management science
3. Operations science
1) Technical approach

Behavioral approach an important part of the
information systems field is concerned with
behavioral issues that arise in the development and
long team maintenance of information systems.
Issues such as strategic business integration, design,
implementation, utilization, and management
cannot be explored usefully the models used in the
technical approach.
2) Behavioral approach

The disciplines that contribute to the
three in behavioral approach:
1) Sociologists
2) Psychologists
3) Economists

It process data and converts it into information
This information is used for long range and short range
planning and also solving different managerial
problems
The domain MIS is mainly management control level of
management hierarchy
It is also been defined as an integrated system
The integration of information may be hierarchical,
horizontal, and cross functional

TPS processes transactions and produce results
It’s domain is obviously at the lowest level of
management hierarchy
Transaction could be externally generated or events
internal to the organisation
In many organisation TPS also known as a data
processing system
Trasaction Processing System

It is an extension of MIS which is a special kind of DSS
It is specially tailored for CEO to support his decision
making
It is more specific and person oriented
Executive Support System

It assist decision making
DSS tend to be used in planning, analyzing alternatives, and trial
and error search for solution
The element of DSS include a database, model base, a software
IFPS and Simplan are two well-known DSS software package in
use
Decision Support System

• It is a knowledge based information system
• It is based on artificial intelligence
• It provide decition support to the managers in
the form of advice from an expert in a specific
problem area
Business Expert System

1. The knowledge of many experts can be used to build
a single expert system
2. It is not affected by emotional factors or fatigue
3. Multiple hypothesis can be considerd simultaneously
The main advantages of using
expert system are

Knowledge base
Inference engine
User interface
The main components of expert
system

 It refers to the application of computer and
communication technology to office function
 To improve productivity of managers at various level
of management by providing secretarial assistance
Office Automation System(OAS)

System is defined as a set of interrelated
components with a clearly defined boundary, working
together to achieve a common set of objective by
accepting input and producing output.
3 components of a system
 Input
 Processing
 Output

System Example
System
Elements
Goal
Inputs
Processin
g
elements
Outputs
Movie
Actors,
director, staff,
sets,
equipment
Filming,
editing,
special
effects,
distributio
n
Finished
film
delivered
to movie
studio
Entertaini
ng movie,
film
awards,
profits

 Feedback
 Control
A system with these two components are called cybernetic system
Feedback : data about the performance of a system
Control: involves monitoring and evaluating feedback to determine
whether the system is moving toward the achievement of its goal.
System concept becomes more useful by
including two additional components

System approach is a method of analyzing an
organization as a whole within its environmental setting
and of studying the relationship existing between its
various parts. The system approach may be applied to the
design of MIS by focusing attention first on Management
Information Needs and then on the means by which
these needs may be satisfied.

The main objective of system approach to MIS is
 To increase the effectiveness of mgt in integrating the
various activities of business.
The fundamental concept of the system approach to
organization and mgt is the interrelationship of the
parts or subsystems of the organization.

System can be classified into 2
 Open system
System which has interaction with its environment. ie,
exchange information with the environment
 Closed system
System that does not interact with its environment. ie, one that
does not exchange information with its environment.

All systems are composed of interrelated parts or
subsystems
 Systems are hierarchical, in that the parts of subsystem
are made up of other smaller parts
 Parts of a system cannot be altered without affecting
other parts
 Subsystem should work towards the goal of other higher
systems and not pursue their own objectives
independently.
Features Of Systems Approach

Technology
Computer networks are systems of information processing
components that use a variety of hardware, software, data mgt&
telecommunications network technologies.
Applications
Electronic business and commerce applications involves
interconnected business information systems
Development
That developing ways to use information technology in business
includes designing the basic components of information systems
Management
The managing information technology emphasizes the quality,
strategic business value, and security of an organizations
information systems.
System concepts will help to understand
many other concepts in the;

An Information System can be defined
technically as a set of interrelated components that
collect, process, store, and distribute information to
support decision making, co-ordination, and control in
an organisation.
Information System

Computerised information system has wide
impact on organization. These affect range from
strategy to individual working. The impacts have
been witnessed through research conducted by
some eminent authorities in the field.
Impact of IS

The impact of technological advancement are:
 Strategy
 Revenue & expense
 Quality
 Impact on individual
 Impact on organisation
 Distribution of powers
Factors influenced by the implementation of IS to
an organisation

Strategy is the essence of modern business.
Strategies are those plans, which are prepared in the light
of the plans of the competitors. The fundamental formula
of strategy formulation is to know about the strength and
weakness, which are internal to the organization. Based
on these, information plans are designed to achieve to
opportunities available, and to fight against threats
available in the external environment. Computer helps to
analysing data quickly and with great accuracy.
Strategy

The use of computer system in information
development and storage and retrieval has helped the
business organisations to minimise its cost of operation.
Computer has successfully replaced the human beings in
most of the clerical operations. In the case of human being
is an operating expense and it is charged to P&L account
as an expenditure. But in the case of computer it is quite
cheaper. On the other hand, the quality of information
generated by it helps the executives to take accurate
decisions timely, so that the revenue of the firm may
increase.
Revenue & Expense

 Word processing is the most commonly used device in
most of the firms. It helps the executives to compose
and edit their document on screen.
 The PowerPoint helps the executives to deliver the
effective presentation to the board members with the
help of audio-visual slide is very effective manner.
 An engineer uses a computer terminal to draw their
drawings and store this files on hard disk, it can be
recalled later for easy modification.
Quality

 The impact of computer on unemployment has been no
greater than that of any other technology change. The lack
of an adverse impact is particularly significant in view of
short period of time that has elapsed since computer was
introduced and a rapid development of computer system.
 The studies conducted on clerical employees in banking
prove the positive in productivity, mental strain symptoms,
job dissatisfaction were associated with the use of
computers. Stress on the job appeared to be the primary
mechanism by which the use of computer system affects
the clerical work.
Impact on Individual

Computer has changed the way of information
extraction and changed the internal structure of the
organisation. The availability of timely, accurately, quickly
and economical availability of information would allow
the management of centralize the power of decision
making. Computers offers the power to make centralize
management possible so the group of top management can
tightly control the organisation.
Impact on Organisation

 Power is a potential to influence others to act as per our
wish. Different levels of department have different level of
power. Theory propounded by Hichson offer some insight
into the power relationship and suggested a model with four
following major conditions that produce a department
having a high level of power.
 Extend to which department can cope up with uncertainty
for other department.
 Numbers of links to a department, the greater its power.
 Possibility of easy replace ability.
 The degree of interdependence between the department of
Distribution of Powers

1. Competitive Business Environment
COMPETITION
Facing Competition in the business
means fighting on a number of fronts.
Competition could be direct /indirect.

Competition is a natural
phenomenon in business,
& it has to be delt with in a proper
manner to protect business
interests.

The environment is beyond the control
of the management. Depending upon
the organizations business & its
purpose, different environments have
bearing on the fortunes of business.
It may be……….

Social.
Business.
Economic.
Industrial.
Technological environments
affecting the business

Competition forces the management to
look for new products, new markets, &
new technologies to keep the market
share in tact, the process controlled &
the quality improved.

Forecasting the probable environment
changes like the change in population,
population mix, consumer preferences &
the behavior, government policies, new
opportunities & so on & so forth, is a major
task under corporate planning.

Business Environment consist of all those Factors
that have a bearing on the business.
The survival & success of a business firm depend
on its innate strength-resources & its command- & its
adaptability to the environment & the extent to which
the environment is favorable to the development of the
firm.
BUSSINESS ENVIRONMENT

.External Environment.
.Internal Environment.
However the term Competitive business
environment often refers to the external environment. In a
competitive business environment, firm broadly looks for 2
components:-
Opportunities.
Threats.
The survival & success of a firm, thus depend on
2 set of factors

 Economic Factors.
 Socio-Cultural Factors.
 Government & Legal Factors.
 Demographic Factors.
 Natural Factors.
 Geo-physical Factors. etc…………
are therefore, generally regarded as uncontrollable
factors.
The External Factors Of Competitive Business units
are beyond the control of a company.

Those External Factors which have a
direct & intimate impact on the firm
[suppliers & distributors] are
classified as Micro/Task/Operating
Environment.

People Resources
Hardware Resources
Software Resources
Data Resources
Network Resources
Information System consists of five
major resources

Required for the operation of all information systems.
Includes End users and IS specialists.
 End Users.
People who use an information system
Accountants, Salespersons, Engineers …
 IS specialists.
Develops and operate information systems
System analysts, Software developers, System operators….
People Resources.

Includes all physical devices used in data processing.
Includes machines, data media.
Consists of Computer systems and Computer peripherals.
- Computer systems consists of central processing units
and a variety of interconnected peripheral devices.
- Computer peripherals consists devices such as keyboard,
mouse, video screen…
Hardware Resources

All set of information processing
instructions.
The examples of software resources are
() System software
() Application software
() Procedures.
Software Resources

 Data resources should be managed effectively to benefit all end
users.
 Data takes several forms such as traditional alphanumeric data,
characters that describe business transactions…
 Data resources of information systems are typically organized,
stored, and accessed by a variety of data resource management
technologies.
() Databases.
() Knowledge bases.
Data Resources

 Communication technologies and networks are a fundamental
resource component of all information systems.
 Network resources includes :
a) Communications Media
Twisted-pair wire, coaxial cable, wireless technologies…
b) Network support.
Modems, Internetwork processors…
Network Resources

Decisions vary with respect to the structure
that can be provided for making them. A highly
structured decision can be preplanned or pre
specified, whereas a highly unstructured decision
cannot.
1) Management information system support
for decision making

 Structured , programmable decisions
 Unstructured nonprogrammable decisions

 Information system for operational control
 Information system for management control
 Information system for strategic planning
2)Management information system structure
based on management activity

 Sales and marketing subsystem
 Production subsystem
 Logistics subsystem
 Personnel subsystem
 Finance and accounting subsystem
 Information processing subsystem
 Top management subsystem
3)Management information system structure
based on organizational function

Challenges of Information System

 The strategic business challenges
 The globalization challenge
 architecture and infrastructure challenge
 The IS investment challenges.
 The responsibility and control challenges.

Creating a digital firm and obtaining benefits is a
long and difficult journey for most of the organisation. The
power of computer hardware and software has grown
much more rapidly than the ability of the organisation to
apply and use this technology.
The strategic business challenge

The rapid growth in the international trade and the
emergence of global economy call for IS that can support
both producing and selling goods in many countries. To
develop integrated, multinational IS business must
develop global hardware, software and communications
standards and design transnational business process.
The globalisation challenge

A major problem raised by the development of
powerful inexpensive computers involves not
technology but management and organisation.
The IS investment challenges

How can they design IS that people can
control and understand. Although IS have
provided enormous benefits and efficiencies
they have created new problem and
challenges
The responsibility and control challenge

Many companies are saddled with expensive and
unwieldy information technology platforms that cannot
adapt to innovation and change. Meeting new and
technology challenge may require redesigning the
organisation and building a new information
architecture and infrastructure challenge
The information architecture and
infrastructure challenge

 Support to business operations.
 Support to managerial decision.
 Gaining strategic competitive advantage.
Three main roles of Information System

Role of information system in qrganisation

1950 1960 1970 1980 1990 2000- 05
Scope Of Information System
Technical
changes
Managerial
Control
Institutional
Core activities
Vendors,customers
Beyond the enterprise
Information
system
Information
system
Information
system
Information
system

 1950 – computers
 1960 – development of large centralized machines.
 1970 – 1980 - I T infrastructure included
telecommunications.
Changing role of information system

THE ORGANISATION senior management
major end users Information system department
I T infrastructure
Hardware
Software
Data storage
Networks
Information Systems Specialists
CIO
Managers
System analysts
Systems designers
Programmers
Network specialists
Database administrator
Clerical

Management Information System

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