Management Information System (MIS)

Management
Information System
(MIS)

Faculty: By:
Mr. Manish Kumar Sharma Sir
Vikas,
Kshitiz &
Himanshu

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 Management Information System (MIS)

Acknowledgement

Presenting this project in the present form, we keenly feel to

recognize the obligations of the personalities behind the screen. We
wish to acknowledge the encouragement and inspiration we
received from our Faculty Mr. Manish Kumar Sharma. We present
our heartful gratitude to our project leader, who immersed him in
the subject matter and kept us simulated throughout this endeavor.

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 Management Information System (MIS)

Management Information System: Definition

MIS (management
information systems) is a general term for the computer systems in
an enterprise that provide information about its business operations.
It's also used to refer to the people who manage these systems.
Typically, in a large corporation, "MIS" or the "MIS department"
refers to a central or centrally-coordinated system of computer
expertise and management, often including mainframe systems but
also including by extension the corporation's entire network of
computer resources.
The MIS program is intended to be the first step in a life-long
learning experience in the exciting and dynamic field of information
technology. It provides a strong foundation for advancement and
success in IT careers and ventures.
Basically, Management Information Systems is the study of the use
of computers in business. This course shows students how
Information Systems are used to support critical business operations
and achieve strategic objectives. The elements or corporate
technology are studied and its application to specific business
situations is discussed. Students develop a small information system
using Microsoft Access and use Excel as a decision support tool.
In the beginning, business computers were used for the practical
business of computing the payroll and keeping track of accounts
payable and receivable. As applications were developed that
provided managers with information about sales, inventories, and
other data that would help in managing the enterprise, the term
‘MIS’ arose to describe these kinds of applications. Today, the term
is used broadly in a number of contexts and includes (but is not
limited to): decision support systems, resource and people
management applications, project management, and database
retrieval applications.

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 Management Information System (MIS)

What is Management Information System?

Management Information System is a general name for the

academic discipline covering the application of information
technology to business problems.
As an area of study it is also referred to as Information Technology
Management. The study of information systems is usually a
commerce and business administration discipline, and frequently
involves software engineering, but also distinguishes itself by
concentrating on the integration of computer systems with the aims
of the organization. The area of study should not be confused with
computer science which is more theoretical in nature and deals
mainly with software creation, and not with computer engineering,
which focuses more on the design of computer hardware. IT service
management is a practitioner-focused discipline centering on the
same general domain.
In business, information systems support business processes and
operations, decision-making, and competitive strategies.

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 Management Information System (MIS)

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.

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 Management Information System (MIS)

Role of Management Information System

The role of the MIS in an organisation 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 organisation. 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 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, Modelling Systems and
Decision Support Systems. The MIS helps in Strategic Planning,
Management Control, Operational Control and Transaction
Processing.

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Background of Management Information System

A Management Information System (MIS) is a system or process
that provides the information necessary to manage an organization
effectively. MIS and the information it generates are generally
considered essential components of prudent and reasonable
business decisions.
The importance of maintaining a consistent approach to the
development, use, and review of MIS systems within the institution
must be an ongoing concern of both bank management and OCC
examiners. MIS should have a clearly defined framework of
guidelines, policies or practices, standards, and procedures for the
organization. These should be followed throughout the institution in
the development, maintenance, and use of all MIS.
MIS is viewed and used at many levels by management. It should be
supportive of the institution's longer term strategic goals and
objectives. To the other extreme it is also those everyday financial
accounting systems that are used to ensure basic control is
maintained over financial recordkeeping activities.
Financial accounting systems and subsystems are just one type of
institutional MIS. Financial accounting systems are an important
functional element or part of the total MIS structure. However, they
are more narrowly focused on the internal balancing of an
institution's books to the general ledger and other financial
accounting subsystems. For example, accrual adjustments,
reconciling and correcting entries used to reconcile the financial
systems to the general ledger are not always immediately entered
into other MIS systems. Accordingly, although MIS and accounting
reconcilement totals for related listings and activities should be
similar, they may not necessarily balance.
An institution's MIS should be designed to achieve the following
goals:
 Enhance communication among employees.
 Deliver complex material throughout the institution.
 Provide an objective system for recording and aggregating
information.
 Reduce expenses related to labor-intensive manual activities.
 Support the organization's strategic goals and direction.
Because MIS supplies decision makers with facts, it supports and
enhances the overall decision making process. MIS also enhances
job performance throughout an institution. At the most senior levels,
it provides the data and information to help the board and
management make strategic decisions. At other levels, MIS provides
the means through which the institution's activities are monitored
and information is distributed to management, employees, and
customers.
Effective MIS should ensure the appropriate presentation formats
and time frames required by operations and senior management is
met. MIS can be maintained and developed by either manual or

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automated systems or a combination of both. It should always be

sufficient to meet an institution's unique business goals and
objectives. The effective deliveries of an institution's products and
services are supported by the MIS. These systems should be
accessible and useable at all appropriate levels of the organization.
MIS is a critical component of the institution's overall risk
management strategy. MIS supports management's ability to
perform such reviews. MIS should be used to recognize, monitor,
measure, limit, and manage risks. Risk management involves four
main elements:
 Policies or practices.
 Operational processes.
 Staff and management.
 Feedback devices.
Frequently, operational processes and feedback devices are
intertwined and cannot easily be viewed separately. The most
efficient and useable MIS should be both operational and
informational. As such, management can use MIS to measure
performance, manage resources, and help an institution comply
with regulatory requirements. One example of this would be the
managing and reporting of loans to insiders. MIS can also be used
by management to provide feedback on the effectiveness of risk
controls. Controls are developed to support the proper management
of risk through the institution's policies or practices, operational
processes, and the assignment of duties and responsibilities to staff
and managers.
Technology advances have increased both the availability and
volume of information management and the directors have
available for both planning and decision making. Correspondingly,
technology also increases the potential for inaccurate reporting and
flawed decision making. Because data can be extracted from many
financial and transaction systems, appropriate control procedures
must be set up to ensure that information is correct and relevant. In
addition, since MIS often originates from multiple equipment
platforms including mainframes, minicomputers, and
microcomputers, controls must ensure that systems on smaller
computers have processing controls that are as well defined and as
effective as those commonly found on the traditionally larger
mainframe systems.
All institutions must set up a framework of sound fundamental
principles that identify risk, establish controls, and provide for
effective MIS review and monitoring systems throughout the
organization. Commonly, an organization may choose to establish
and express these sound principles in writing. The OCC fully
endorses and supports placing these principles in writing to enhance
effective communications throughout the institution. If however,
management follows sound fundamental principles and governs the
risk in the MIS Review area, a written policy is not required by the
OCC. If sound principles are not effectively practiced, the OCC may

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require management to establish written MIS policies to formally

communicate risk parameters and controls in this area.
Sound fundamental principles for MIS review include proper internal
controls, operating procedures and safeguards, and audit coverage.

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Impact of the Management Information System

Since the MIS plays a very important role in the organisation, it

creates an impact on the organisation’s functions, performance and
productivity.
The impact of MIS on the
functions is in its management. With a good MIS support, the
management of marketing, finance, production and personnel
becomes more efficient. The tracking and monitoring of the
functional target becomes easy.
The MIS creates another impact in the organisation which relates to
the understanding of the business itself. The MIS begins with the
definition of a data entity and its attributes. It uses a dictionary of
data, entity and attributes, respectively, designed for information
generation in the organisation.
The MIS calls for a systemisation of the business operations for an
effective system design. This leads to streamlining of the operations
which complicate the system design. It improves the administration
of the business by bringing a discipline in its operations as
everybody is required to follow and use systems & procedures. This
process brings a high degree of professionalism in the business
operations.
Since the goals and objectives of the MIS are the products of
business goals & objectives, it helps indirectly to pull the entire
organisation in one direction towards the corporate goals and
objectives by providing the relevant information to the people in the
organisation.

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Learning Objectives of MIS

 Identify the changes taking place in the form and use of

decision support in E-business enterprises.
 Identify the role and reporting alternatives of management
information systems.
 Describe how online analytical processing can meet key
information needs of managers.
 Explain the decision support system concept and how it
differs from traditional management information systems.
 Explain how executive information systems can support the
information needs of executives and managers.
 Identify how neural networks, fuzzy logic, genetic
algorithms, virtual reality, and intelligent agents can be used in
business.
Give examples of several ways expert systems can be used in
business decision-making situations.

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The Functional Support Role in MIS

It can also be called Data Base Management System (DBMS)

wherein maximum utilization in an efficient manner based on the
organisational needs is obtained by analyzing, processing and
referencing of Data Base. Not only for the business, but for all kinds
of organisations such as Disaster Management Organisation for
using it as Disaster Management Information System.

Business processes and operations support function are the most

basic. They involve collecting, recording, storing, and basic
processing of data. Information systems support business processes
and operations by:

 Recording and storing accounting records including sales

data, purchase data, investment data, and payroll data.
 Processing such records into financial statements such as
income statements, balance sheets, ledgers, and
management reports, etc.
 Recording and storing inventory data, work in process data,
equipment repair and maintenance data, supply chain data,
and other production/operations records.
 Processing these operations records into production
schedules, production controllers, inventory systems, and
production monitoring systems.
 Recording and storing such human resource records as
personnel data, salary data, and employment histories.
 Processing these human resources records into employee
expense reports, and performance based reports.
 Recording and storing market data, customer profiles, and
customer purchase histories, marketing research data,
advertising data, and other marketing records.
 Processing these marketing records into advertising elasticity
reports, marketing plans, and sales activity reports.
 Recording and storing business intelligence data,
competitor analysis data, industry data, corporate objectives,
and other strategic management records.
 Processing these strategic management records into
industry trends reports, market share reports, mission
statements, and portfolio models.

The bottom line is that the information systems use all of the above
to implement, control, and monitor plans, strategies, tactics, new
products, new business models or new business ventures.

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The Decision Support Role in MIS

The business decision-making support function goes one step

further. It becomes an integral part -- even a vital part -- of decision-
making. It allows users to ask very powerful "What if…?" questions:
What if we increase the price by 5%? What if we increase price by
10%? What if we decrease price by 5%? What if we increase price
by 10% now, then decrease it by 5% in three months? It also allows
users to deal with contingencies: If inflation increases by 5%
(instead of 2% as we are assuming), then what do we do? What do
we do if we are faced with a strike or a new competitive threat? An
organization succeeds or fails based on the quality of its decisions.
The enhanced ability to explore "what if" a question is central to
analyzing the likely results of possible decisions and choosing those
most likely to shape the future as desired. "Business decision-
making support function" is a phrase likely to quicken the pulse of
no one but an accountant, but, in fact, it is all about turning
wonderful dreams into solid realities.

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The Communication Decision Support System Role

Information systems can support a company's competitive

positioning. Here are three levels of analysis:

 The supports for help in piloting the chain of internal value.

They are the most recent and the most pragmatic systems
within the reach of the manager. They are the solutions to
reductions of costs and management of performance. They
are typically named "Business Workflow Analysis" (BWA) or of
"Business Management Systems p2p". Tool networks, they
ensure control over piloting the set functions of a company.
The real-time mastery in the costs of dysfunctions cause
distances from accounts, evaluation and accounting that are
presented in the evaluation and qualitative reports.
 All successful companies have one (or two) business functions
that they do better than the competition. These are called
core competencies. If a company's core competency gives it a
long term advantage in the marketplace, it is referred to as a
sustainable competitive advantage. For a core competency to
become a sustainable competitive advantage it must be
difficult to mimic, unique, sustainable, superior to the
competition, and applicable to multiple situations. Other
examples of company characteristics that could constitute a
sustainable competitive advantage include: superior product
quality, extensive distribution contracts, accumulated brand
equity and positive company reputation, low cost production
techniques, patents and copyrights, government protected
monopoly, and superior employees and management team.
The list of potential sustainable competitive advantage
characteristics is very long. However, some experts hold that
in today's changing and competitive world, no advantage can
be sustained in the long run. They argue that the only truly
sustainable competitive advantage is to build an organization
that is so alert and so agile that it will always be able to find
an advantage, no matter what changes occur.

Information systems often support and occasionally constitute these

competitive advantages. The rapid change has made access to
timely and current information critical in a competitive environment.
Information systems, like business environmental scanning systems,
support almost all sustainable competitive advantages.
Occasionally, the information system itself is the competitive
advantage. One example is Wal-Mart. They used an extranet to
integrate their whole supply chain. This use of information systems
gave Sam Walton a competitive advantage for two decades.
Another example is Dell Computer. They used the internet to market
custom assembled PC's. Michael Dell is still benefiting from this low-

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cost promotion and distribution technique. Other examples are

eBay, Amazon.com, Federal Express, and Business Workflow
Analysis.

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The Performance Monitoring Role in MIS

MIS are not just statistics and data analysis, but also assessment of
human capabilities. They have to be used as an MBO
(Management by objectives) tool. They help:

 To establish relevant and measurable objectives,

 To monitor results and performances (reach ratios).

To send alerts, in some cases daily, to managers at each level of the

organization, on all deviations between results and pre-established
objectives and budgets.
The Management Information System Group develops, maintains
and operates software managing a large scope of general purpose
data.
The applications enable:
 On-site users to process orders, manage budgets, assets and
stocks.
The world-wide ESRF user community to process scientific
proposals, reports, a forms, and safety aspects related to
experiments, statistics and soon experiment scheduling.

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Potential Benefits of MIS Investments

Investing in information systems can pay off for a company in many

ways.

 Such an investment can support a core competency. Great

companies invariably have one or two core competencies,
something they can do better than anyone else. This could be
anything from new product development to customer service.
It is the heart of the business and no matter what it is;
information technology can support that core competency. An
IT investment in a company's core competency can create a
significant barrier to entry for other companies, defending the
organization's primary turf and protecting its markets and
profits.
 It can build supply chain networks. Firms that are a part of an
integrated supply chain system have established relationships
of trust with suppliers. This means faster delivery times,
problem-free delivery and an assured supply. It can also mean
price discounts and other preferential treatment. The inability
of new entrants to get onto a supply chain/inventory
management system can be a major barrier to entry.
 It can enhance distribution channel management. As with
supplier networks, investment in distribution channel
management systems can ensure quicker delivery times,
problem free delivery, and preferential treatments. When the
distribution channel management system is exclusive, it can
mean some control over access to retailers, and, once more, a
barrier to entry.
 Such an IT investment can help build brand equity. To build a
brand, firms often invest huge sums in advertising. A huge
brand name is a formidable barrier to enter and sustaining it
can be facilitated by investment in marketing information
systems and customer relationship management system.
 Information systems can mean better production processes.
Such systems have become essential in managing large
production runs. Automated systems are the most cost
efficient way to organize large scale production. These can
produce economies of scale in promotion, purchasing, and
production; economies of scope in distribution and promotion;
reduced overhead allocation per unit; and shorter break-even
times more easily. This absolute cost advantage can mean
greater profits and revenue.
 IT investment can boost production processes. Information
systems allow company flexibility in its output level. Michael
Porter claims that economies of scale are a barrier to entry,
aside from the absolute cost advantages they provide. This is
because, a company producing at a point on the long-run

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average cost curve where economies of scale exist has the

potential to obtain cost savings in the future, and this
potential is a barrier to entry.
 Implementing IT experience can leverage learning curve
advantages. As a company gains experience using IT systems,
it becomes familiar with a set of best practices that are more
or less known to other firms in the industry. Firms outside the
industry are generally not familiar with the industry specific
aspects of using these systems. New entrants will be at a
disadvantage unless they can redefine the industries best
practices and leap-frog existing firms.
 IT investment can impact mass customization production
processes. IT controlled production technology can facilitate
collaborative, adaptive, transparent, or cosmetic
customization. This flexibility can increase margins and
increase customer satisfaction.
 Leverage IT investment in computer aided design (1). CAD
systems facilitate the speedy development and introduction of
new products. This can create proprietary product differences.
Product differentiation can be a barrier to entry. Proprietary
product differences can be used to create incompatibilities
between competing products (as every computer user knows).
These incompatibilities increase consumers’ switching costs.
High customer switching costs is a very valuable barrier to
entry (Hey, it worked for Bill Gates.)
 It means expanded E-commerce. Company web sites can be
personalized to each customer’s interests, expectations, and
commercial needs. They can also be used to create a sense of
community. Both of these tend to increase customer loyalty.
Customer loyalty is an important barrier to entry.
 Information systems leverage stability. Technologically
sophisticated firms with multiple electronic points of contact
with customers, suppliers, and others enjoy greater stability.
This monumental appearance of stability can be a barrier to
entry, especially in financial services.

The simple fact that IT investment takes a significant amount of

money makes it a barrier to entry. Anything that increases capital
requirements is -- guess what? -- A barrier to entry.

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Historical Development
The role of business information systems has changed and
expanded over the last four decades.
In the incipient decade (1950s and '60s), “elecsystems” could be
afforded by only the largest organizations. They were used to record
and store bookkeeping data such as journal entries, specialized
journals, and ledems” were used to generate a limited range of
predefined reports, including income statements (they were
called P & L’s back then), balance sheets and sales reports.
They were trying to perform a decision making support role,
but they were not up to the task.
By the 1970s “decision support
systems” were introduced. They were interactive in the sense that
they allowed the user to choose between numerous options and
configurations. Not only was the user allowed customizing outputs,
they also could configure the programs to their specific needs.
There was a cost though. As part of your mainframe leasing
agreement, you typically had to pay to have an IBM system
developer permanently on site.
The main development in the 1980s was the introduction of
decentralized computing. Instead of having one large mainframe
computer for the entire enterprise, numerous PC’s were spread
around the organization. This meant that instead of submitting a job
to the computer department for batch processing and waiting for
the experts to perform the procedure, each user had their own
computer that they could customize for their own purposes. Many
poor souls fought with the vagaries of DOS protocols, BIOS
functions, and DOS batch programming.
As people became comfortable with their new skills, they discovered
all the things their system was capable of. Computers, instead of
creating a paperless society, as was expected, produced mountains
of paper, most of it valueless. Mounds of reports were generated
just because it was possible to do so. This information overload was
mitigated somewhat in the 1980s with the introduction of “executive
information systems”. They streamlined the process, giving the executive exactly
what they wanted, and only what they wanted.
The 1980s also saw the first commercial application of artificial
intelligence techniques in the form of “expert systems”. These
programs could give advice within a very limited subject area. The
promise of decision making support, first attempted in management
information systems back in the 1960s, had step-by-step, come to
fruition.
The 1990s saw the introduction of the Strategic information system.
These systems used information technology to enable the concepts
of business strategy developed by scholars like M. Porter, T Peters, J.
Reise, C. Markides, and J. Barney in the 1980s. The sustainability of
these applications has since been called into question by N. Carr,
which Piccoli and Ives, among others, have countered.

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The role of business information systems had now expanded to

include strategic support. The latest step was the commercialization
of the Internet, and the growth of intranets and extranets at the turn
of the century.

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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 organisational transformation
through integration. A good MIS also makes an organisation
seamless by removing all the communication barriers.

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Bibliography
Wikipedia – Online Encyclopedia

Microsoft Encarta Reference Library

Google Search Engine

AltaVista Search Engine

Ask.com Search Engine

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Remarks

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Than
ks
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